Ten U.S. states have public pension liabilities that are at least as big as their annual revenues, according to a Moody’s Investors Service report released on Thursday that found the Illinois pension bill was equal to 241 percent of its revenues. …
According to Moody’s, Illinois has the largest net pension liability in the country, $133 billion, equal to $10,340 per person in the state. The liability is equal to 19.8 percent of the state’s gross domestic product.
It’s worth nothing that the $133 billion owed for the pensions does NOT include the over $45B in state issued bonds or over $8B in unpaid bills sitting on the Treasurer’s desk. (Source.)
The reality is every man, woman, and child in Illinois owes the state at least $14,400.
Every man, woman, and child in the U.S. owes the G $53,400.
So if you live in Illinois add up your net worth and subtract $67,800. Of course, if your a taxpayer you actually owe about 2x this amount… but that’s another story.
Illinois broke federal securities laws in misstating the true health of the state’s depleted pension funds when going out onto the bond market between 2005 and early 2009, the Securities and Exchange Commission announced Monday. …
The finding of securities fraud doesn’t subject the state to any fines or penalties but amounts to a warning to potential investors about the state’s past financial misdeeds.
The action focuses mostly on misstatements made during impeached ex-Gov. Rod Blagojevich’s administration, though Gov. Pat Quinn’s administration wasn’t spared entirely in the federal order.
“Municipal investors are no less entitled to truthful risk disclosures than other investors,” said George S. Canellos, Acting Director of the SEC’s Division of Enforcement in a prepared statement.
“Time after time, Illinois failed to inform its bond investors about the risk to its financial condition posed by the structural underfunding of its pension system,” Canellos said.
via Sun-Times Politics.
Wow!! So, the article says (twice) that there are no fines or penalties that go with this… But what the article doesn’t say is that the State is now subject to a civil suit by bond-holders.
Q: Where was Lisa Madigan while this was happening?
I found this while at the Khan Academy.
My comment on a brainless story:
Since when is Crain’s the new PR mouthpiece for Quinn and Rahm?
Except for the graphic this piece is nearly 100% opinion. So Indiana spent $300k on a campaign and got 20 or so companies to move. Those companies may provide several millions worth of tax base; yielding a huge ROI for IN. But the author just sweeps that under the rug.
Yes, IN does not have the “white collar” talent pool that Chicago has. But it will develop it over time. Success is a long term game; not a lottery ticket.
The Illinois Machine has driven us to the edge of insolvency. Rahm appears to have a plan. Quinn is a headless chicken. But sooner or later the taxpayers are going to get a tax bill the likes of which have never been scene before. Then we’ll see how many more people decide to move East and North.
via Crain’s Chicago Business.
Illinois was fifth in a ranking of extra wireless costs, the Tax Foundation said, with the user paying an average of about 21.8 percent in additional federal, state and local taxes and fees. Only callers in Nebraska, Washington, New York and Florida pay more.
via Chicago Tribune.
I was just talking to someone about this the other day. Ya know, if you move your “address” out of state you can avoid some of these fees. With paperless billing does it really matter where the company sends (or doesn’t send) your bill?
I’m sure people who live in Indiana or Wisconsin burn plenty of minutes across the border. Seems like a reasonably solution to me.
Gov. Pat Quinn’s administration delayed Wednesday’s planned sale of $500 million in construction bonds, saying a recent credit downgrade because of inaction on government worker pension reform left the market “unsettled.”
The decision was made after officials with the governor’s budget office spoke with potential bidders who indicated they would seek interest rates higher than what the state wanted to pay.”
In a bond market when there is uncertainly, you pay an extra premium, which we decided was imprudent to pay,” said John Sinsheimer, director of capital markets for the state. “So we pulled them, and will bring the back at a future date when everything has settled down.”
via Chicago Tribune.
The first thing to do when you’re in a hole is stop digging. Quinn has the right idea… now may not be the best time to issue more bonds. But because the finances are so bad pretty soon he will not have a choice. More debt — at higher interest rates — is our future.
More troubling however is note how the Gov’s office is not waiting until they actually fix anything. He’s not going to defuse the pension time-bomb. He and The Machine are not going to balance the budget or develop a long term spending plan to correct the state’s deficit. The plan is to merely wait until “everything has settled down.”
We deserve so much better than that.
So alas… people don’t like to hear bad news and will continue to vote for Santa Claus. We need not be real. Just keep voting for the guy who tells you it’s somebody else’s problem.
We’re so screwed.
So I just posted the Illinois is now worse that California (those of us here could have told you that two years ago.) But I’ll bet all of you have been wondering, “Well what states have good credit ratings?” Yes, yes. I was wondering too. See this nice chart I found somewhere and blatantly stole for you.
There are a bunch. PDF summary is here.
Unemployment across Illinois rose to 9.1 percent in August, the third straight month of increases in the state, the Illinois Department of Employment Security said Thursday. …
Unemployment in July was 8.9 percent. Increases in the unemployment rate in June, July and August followed nine months of slow but steady declines. The federal government said earlier this month that the national unemployment rate dropped from 8.3 percent to 8.1, but the decrease was thought to primarily be driven by people dropping off unemployment rolls because they stopped looking for work.
via Crain’s Chicago Business.
Not a good sign.
It’s time for Madigan, Rahm, Quinn, and the rest of the cabal to stop lining their own pockets and start balancing budgets and becoming a little more business friendly.
Do anti-business people understand that no businesses = no taxpayers. No taxpayers = no tax revenue. No tax revenue = no government jobs or services?
Government in and of itself creates nothing of value. It’s all done with other people’s money. What about that is so hard to understand?
This is embarrassing:
Foreclosures starts in Illinois are on par with those in other areas but the state’s court-supervised foreclosure system continues to bog down properties in the process.
Almost 7.5 percent of all one-to-four-unit mortgage loans in Illinois were in foreclosure in the first quarter, compared with a national average of 4.39 percent, according to data released Wednesday by the Mortgage Bankers Association.
“Illinois and New Jersey trail only Florida as being the worst in the country, and they’re getting worse,” said Jay Brinkmann, the association’s chief economist “The rate in Illinois more than twice that of California. In the judicial states the problem continues to get worse in terms of the backlog of loans in the foreclosure process.”
via Chicago Tribune.
Perhaps if we had a government that was at least minimally friendly to business more people would be working. That would certainly help. But you cannot crush every businesses’ ability to efficiently function in the city and then wonder why more people don’t have good jobs.
Jobs will come when businesses come. When people are working again mortgages will get paid.