When sitting in traffic, staring at the car of a fellow resident in front of you, examine its Illinois license plate. You’ll be reminded ever so subtly that you are idling away in the “Land of Lincoln”.
But is it? Knowing what historians tell us about Abraham Lincoln’s convictions, and about the kind of leader he was, it seems inconceivable that he would have tolerated this land, this state, in its present condition, moral or economic.
It is equally unlikely Lincoln would have allowed the decline of Illinois to begin, if he could have influenced it, or that he’d have stood by and watched it precipitate.
Calling Illinois the Land of Lincoln today sounds as inane as calling California the Golden State, or calling a cigarette “pure tobacco pleasure”. (One can only assume that Ronald Reagan’s family is delighted Illinois never became the Land of Reagan).
With Illinois leading the way, some of the nation’s “laboratories of democracy” really have become cracks in the armor of the world’s most robust economic engine.
A two-year deep dive by an independent State Budget Crisis Task Force finds the “existing trajectory of state spending, taxation and administrative practices cannot be sustained.”
It is no doubt less surprising that this is the forecast than how little attention the task force has received from the media since its mid-July unveiling. Perhaps members of the media are hesitant to shed light on the pending demise of states run by devout liberal Democrat governors such as Pat Quinn of Illinois and Jerry Brown of California, among others.
These two governors — unlike pro-active budget-cutter Chris Christie in equally ravaged New Jersey — have about as little regard for budget deficits and entitlement addiction as did the Titanic’s bridge for large chunks of North Atlantic ice.
The Wall Street Journal recently summarized the findings of the panel and its co-chairs, former New York Lt. Gov. Richard Ravitch and ex-Federal Reserve chairman Paul Volcker. Their words of caution have been echoed by policy think tanks such as the Illinois Policy Institute and the Center on Budget and Policy Priorities.
- Medicaid has become the largest part of states’ budgets (averaging 24%), but not because of the usual suspect, higher medical costs. No, the annual 7.2% increases in the past decade stem from states adding to their Medicaid rolls and offering new benefits. If this continues, non-medical state programs soon will get the ax.
- Illinois is the poster child of unfunded pension liabilities, but the Ravitch-Volcker study finds it is not the only fund-shifting addict among the six states it scrutinized (California, New Jersey, New York, Texas and Virginia are the others). Illinois, the Policy Institute projects, faces a $203 billion unfunded liability time bomb, including retiree health insurance. The panel estimates that the five other states plus Illinois are short $539 billion.
- Perhaps what is most disturbing about the panel’s report is the conclusion that willful recklessness is at the heart of the states’ red-ink factories. The Journal characterized it as lawmakers “running bookkeeping cons that disguise the fiscal realities.”
Illinois is “borrowing short term for cash flow to make unpaid bills” and joins California, New Jersey and New York in the practice of “securitizing their future tax revenue.” Laments the Journal editorial board, “Even Greece doesn’t do that.”
And yet …
In June, Quinn signed a Medicaid reform bill that fell more than $1 billion short of the $2.7 billion in cuts he has said are necessary.
Now, Illinois lawmakers are trying to put a similar band-aid on the state’s pension crisis by way of tepid “reform bills”, knowing the unions have no intention of giving Quinn and his supporters any leeway.
Passage of these reform bills, notes the Illinois Policy Institute, still will make the state home to “the worst-funded government pensions in the country.”
The Land of Lincoln? Or, is time for a new motto: Wasteland.
