CHICAGO - So sometime in the past month, Illinois hit another financial depth - $100 billion in unfunded pension obligations. Crain's Chicago spoke with Moody's to ask what that means for Illinois future.
Hitting $100 billion “isn't all that relevant,” says Ted Hampton, vice president and senior analyst at Moody's Investors Service, a New York credit rating agency that has downgraded the state four times in the last four years. But compared with the size of Illinois' budget and gross domestic product, “it makes the state an outlier among its peers.”
Rhode Island, for example, a state that enacted drastic reforms for its troubled system in 2011, saw its pension debt hit more than 50 percent of its annual state budget and nearly 9 percent of the state's gross domestic product. At $100 billion, Illinois pension debts stand at about twice annual state expenditures, including capital spending, and more than 15 percent of its annual economic output.
“In the last couple of years, we've seen the Legislature and the governor repeatedly fail to muster the political willpower to make meaningful changes,” Mr. Hampton says. “If the state fails to take meaningful steps to address this problem, we will take action.”Illinois taxpayers just can't wait for that threat to be acted upon. Read more HERE