The job is not getting done

Thursday, May 6, 2010

You have to admire the determination of Illinois lawmakers — the determination to get off work early.
Lawmakers are poised to exit Springfield on Friday, about three weeks earlier than usual. An early vacation would be OK if they had earned it. They haven’t.
They keep putting off today’s problems until tomorrow. They’re not going to raise taxes or cut spending. They have to do one, if not both of those things, if there’s any hope of filling a $13 billion budget hole.
Ignoring the budget deficit is bad. Worse is lawmakers’ plan for the pension system. They will probably borrow to pay the $3.7 billion in pension payments — or skip the payment altogether.
Illinois has the worst pension debt in the nation and has for years. Joshua R. Rauh, associate professor of finance, Kellogg School of Management, Northwestern University, says the major Illinois pension funds will run out of money by 2018.
The pension reforms the General Assembly passed this year are not enough. “By the time this bill is likely to make any real difference in actual benefit cash flows, I predict an Illinois pension crisis will have forced more drastic measures,” Rauh writes on his blog (kelloggfinance.wordpress.com).
The state employs experts who are supposed to come up with solutions so “drastic measures” are not necessary. Where are they and is anyone listening?
There’s work to be done.