A new report has recently been published by the State Budget Crisis Task Force (apparently you need a task force to tell you what someone who is good in math could tell you). The State Budget Crisis Task Force is co-chaired by Richard Ravitch (former Lieutenant Governor of New York) and Paul Volcker (former Chairman of the Federal Reserve Board of Governors). Their new report on Illinois' budget crisis does not paint a pretty picture. Some highlights from the report summary include the following statements:
"Illinois' budget is not fiscally sustainable." (p. 7)
"Illinois has the worst unfunded pension liability of any state . . . . Illinois will not be able to fund other priorities unless it adopts serious pension reform." (p. 7)
"Illinois' debt is also crowding out the budget." (p. 7)
"It would be better for Illinois to start on a long-run path to a sustainable budget than to live beyond its means for several more years and then face a sudden, painful reckoning." (p. 8) This could also be said for our school district (in fact, I have been saying this about our school district since I was elected to the board in 2009). But, it is in the nature of most people to seek to delay the painful reckoning until it can no longer be delayed. By then it is so large that drastic measures are required.
A couple of other points that are mentioned later in the report:
"Financing deficits, particularly using debt as if it were an element of revenue, is bad financial and budgetary practice." (p.32)
". . .funding pensions, Medicaid, and debt service has diminished Illinois' ability to fund education." (p.37) In other words, we have starved our future to feed our present. Can you say "generational theft?"
To read the full report, click here. To read a discussion of the math involved involved in the problem, click here.
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