Illinois lurches from one fiscal crisis to another. The state has the worst funded pension system for its public workers in the country. Pew reports that pension payments "have become so large they are eating
up all of the state's new tax money and still forcing cuts to schools
and Medicaid." The state regularly competes with California for the worst bond rating. So while pensions squeeze the budget the state will be spending more and more on interest payments to its creditors. The former has received far more public attention then the latter. But the latter is the worst sort of government waste. Not having one's fiscal house in order and then paying more in interest is a huge waste of taxpayers' money. It diverts scarce resources that could be spent in ways that actually benefited citizens and increased economic growth. State's bond ratings and interest payments on their debt should receive more scrutiny when we discuss the pension crisis and the role of public sector unions in state politics.
PublicSectorInc.org is a project of the Manhattan Institute's Center for State & Local Leadership.
Copyright © 2013 Manhattan Institute for Policy Research, Inc. All rights reserved.
52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494
Copyright © 2013 Manhattan Institute for Policy Research, Inc. All rights reserved.
52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494
Join the conversation