From John Bambenek…
Last night the Governor’s office confirmed what many have suspected, that the Illinois pension systems are the subject of an SEC investigation. You can read the Wall Street Journal article on the subject.
With our pensions systems not only falling below 50% funding, but selling assets to keep the lights on, this is disturbing news. The best guess estimate I have is that the pension debt for the state alone is around $140 to $150 BILLION dollars. And despite the massive tax hike, no real work has been done to stabilize these funds. At this rate, they will be insolvent and unable to pay benefits by 2015.
Like many of you, I was appalled at the job-killing tax hikes that were passed in the final hours of the last legislative session. What was worse is that not only was spending not cut, they actually expanding state spending. The so-called “spending caps” are illusory at best for two reasons: it does not limit spending out of “special funds” and the spending caps are set higher than even the most optimistic estimates of the revenue that we will have.
To put it another way, we had to pass this tax increase because of a $13 billion dollar deficit. Based on estimates from several groups on both sides of the political spectrum, our budget deficit will be between $15 billion and $23 billion four years from now when the first portion of the tax hike is scheduled to expire. In short, we kicked the can down the road because once again, we have no plan to bring stability to the state’s finances.
Our books need to be audited, our pensions need to be audited and we need to take a serious look at what programs we fund and what programs simply aren’t a priority anymore. For instance, Kid Care, the program unilaterally created by Rod Blagojevich. That program was cited in his Articles of Impeachment as an abuse of his office’s powers, but yet, the program is declared untouchable and must not be cut under any circumstances. The list goes on.
Our state’s fiscal problems are caused by one problem and one problem alone. We knew what money we had and we chose to spend more than we had and used accounting stunts and one-time revenue sources to fund a shell game. We don’t have a “revenue problem”, we have a problem of trying to
pend money we simply don’t have. The state has been doing it for over a decade and the bill is coming due.
And the best example is the pensions. We promise benefits we don’t fund and have manufactured a crisis where one should not have existed.
Time is running short, the problem can be fixed but it requires a seriousness of purpose in Springfield. Call your legislators and tell them to right this ship before it’s too late.
Sincerely,
John Bambenek
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