Crain's Chicago Business has done a yeoman's job investigating the Illinois pensions crisis. Today's installment digs into how it happened:
A dense, 78-page bill aimed in part at curbing pension abuses in downstate and suburban school systems landed in lawmakers' laps two days before their scheduled May adjournment [in 2005]. One sponsor called it the first “meaningful” reform in 40 years, a reversal of “decades of neglect and bad decisions.” Another predicted that it could save the state up to $35 billion.
But in addition to true reform, the bill later signed by Gov. Rod Blagojevich allowed the state to skip half its pension payments for two years and to stretch out some expenses approved under the previous governor, George Ryan. No one mentioned those could cost $6.8 billion. The math hadn't been done.
Cumulatively, those poor decisions more than quintupled the $20 billion deficit that existed in 1995 to the current $104.6 billion, leaving a seemingly insurmountable emergency with no fix in sight.
Most charitably, the reason Illinois faces such an unholy mess may be the inability of state leaders to fathom how even slight alterations to state employee retirement plans could carry billion-dollar costs or lead to bond-rating downgrades.
Crain's has a definite point of view, and while I'm not sure I completely agree with it, they show how the bad decisions weren't confined to any party or clique. Illinois politicians of both parties showed crashing (or willful) ignorance of basic financial math for so long that it's impossible to hold any of them truly accountable. Maybe that was the plan all along.
Illinois isn't going to drop off the map, nor is Chicago going to disappear like other major industrial cities east of us have done. But we're certainly heading towards ugly negotiations with state retirees and with taxpayers. I just hope that as taxes increase to pay for our past sins, the benefits of living in a vibrant and connected urban space outweigh the increasing costs.
Something has to give, and soon. Maybe our pensions crisis will push us into electing more responsible officials. I'm not optimistic in the short run.