A funny thing happened in Springfield yesterday: the state legislature actually did something. They passed a bill to cut benefits from Illinois’ ridiculously underfunded pension system. Political leaders like Governor Pat Quinn and House Speaker Mike Madigan will point to $130 billion in savings over the next 30 years and move on to their re-election campaigns for 2014. Predictably, those dependent on the pensions are angry. We had a contract, they say. It’s unconstitutional, they say. See you in court, they warn. And, of course, that’s the next step.
To us it looks like Illinois is finally accepting it’s lot as a state declaring bankruptcy. Unfunded pension liability has been dragging the state down for decades. Meanwhile, the court systems continue to opine against the ‘too big to fail’ mentality for state and local government. Look at what happened in Michigan yesterday: a bankruptcy court refused to lump local municipal pension failures on the state government. So what do you do if it’s the next level of government taken to court with no funds? Appeal to the President?
We note with interest (as has everyone else) that the current plan leaves the pensions of the state judges alone (to avoid conflict of interest, wink-wink, said Madigan). Right.
This won’t truly be resolved anytime soon, and today there are a lot of state and local government workers and retirees who are feeling uneasy. As well they should. Their financial futures are (and have been) in the hands of a pretty bad lot of politicians within one of the worst government set-ups in the country. We sympathize, but the money’s just not there.