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Illinois Pension Benefits, Other Promises, and Insolvency


Let's take a momentary reprieve from Italian insolvency to discuss the sorry state of affairs in Illinois.

WirePoints asks: Will Illinois budget negotiations reverse the 10 trends dragging Illinois toward insolvency, or simply perpetuate them?

This a guest post from WirePoints. I will skip the blockquotes and instead note the end of the article.

By Ted Dabrowski and John Klingner

With just days left for Illinois legislators to agree to a new state budget, don't expect them to make the tough decisions necessary to reverse the direction the state is in. After all, it's an election year.

The media is reporting that all is quiet on the negotiating front, which confirms no real reforms are being debated. Illinoisans can expect the same financial and accounting gimmicks to keep the state's financial games going.

The decline in Illinois has gone on long enough – certainly long enough to know the status quo isn't working. To demonstrate, we've put together a list of trends that capture much of Illinois' collapse.

The list could be much longer and more depressing, but the ten items below show the sort of reforms lawmakers should be adding to the budget.

Ten trends

The first four trends revolve around the state's chronic budget deficits. Illinois' budget is being swallowed by out-of-control Medicaid, pension and state worker costs that far exceed Illinoisans ability to pay for them.

1. Medicaid. Medicaid is supposed to be a safety net for our most vulnerable populations – children, seniors and disabled adults. They should be our priority. Instead, enrollment in Medicaid has ballooned to include 3.1 million Illinoisans – nearly 25 percent of the population. The program is now collapsing under its own weight and those being squeezed out of access to health care are, ironically, Illinois' most vulnerable.

Booming enrollments, including 675,000 able-bodied, single adults, have led to booming expenditures. Medicaid spending more than doubled between 2000 and 2018 and now consumes more than 20 percent of the state's general budget. Medicaid, combined with ever-rising pension costs, threatens to bankrupt Illinois.

Lawmakers should scrub the Medicaid rolls to ensure only eligible people receive services, request a block grant from the Federal government, and implement work requirements for single, able-bodied adults so Medicaid can focus on those most in need. Most importantly, Illinois needs jobs and a thriving economy. Financial independence is the best way to get people off Medicaid.

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