Illinois’ Really Bad Idea
By nearly all fiscal measures, the state of Illinois is a basket case. Driven by political promises to pay exceptionally generous pensions to state government employees it cannot afford, the state government’s finances are drowning in red ink.
Its public employee pension liabilities have grown so large that the state’s new governor, J.B. Pritzker, is considering transferring the effective ownership of the state’s public assets, such as airports, tollways, public water systems, and state parks, to state and local government employee pension systems. Wirepoints Mark Glennon reports:
Governor JB Pritzker’s administration has now made clear it will seriously consider the latest idea to address Illinois’ pension crisis – transferring public assets directly to state pensions. It recently announced the formation of a task force on the subject.
At its core, the concept is exceptionally simple. In practice, however, it’s exceptionally subject to smoke and mirrors and would further obscure a pension system that’s already far too opaque. More importantly, asset transfers do nothing to improve the state’s overall fiscal health.
Just convey ownership of some public assets to the pension, for free, in addition to the cash contributions taxpayers make now. That’s all this is about. Maybe the Illinois Lottery or Illinois Tollway for state pensions. Maybe Midway Airport or its water system for Chicago pensions. Those are examples of assets that have been mentioned that might be handed over.
Adopting such a policy would certainly eliminate the pretense that government services in the state are operated for the benefit of the taxpaying public. Transferring state and local government-owned assets to public employee pension funds would be a clear example of politicians putting the interests of the state’s bureaucrats ahead of those of the state’s residents.
Writing at Forbes, actuary Elizabeth Bauer identifies the one thing that could fix Illinois’ problems with its outsized pension liabilities that isn’t even under consideration:
And yet, what’s still not on the table, among the options Gov. Pritzker has said he’s willing to consider, is any sort of pension reform to address the benefits promised and being paid which are so much larger than those which private sector employers paid even when Defined Benefits were the norm for those companies.
To paraphrase a speech by a former state resident, the idea of Illinois’ proposed government of the bureaucrats, by the bureaucrats, for the bureaucrats, ought to perish from the earth.