Why Illinois Will Likely Be The First State Government To Go Bankrupt

We have often discussed the reality that politicians at all levels of government, Federal, state and local, have no concept or no will to keep government spending under control: 

• The Federal government has a national debt level over $22,000,000,000,000 (22 trillion)
• The Federal government has unfunded Medicare, Medicaid, and Social Security liabilities over $80,000,000,000,000 (80 trillion).
• State governments have unfunded liabilities and debt of at least $7,000,000,000,000 (7 trillion).
• If you add up the above three debt numbers you get $109,000,000,000,000 which means that every U.S. household would have to pay about $870,000 to pay off the debt and unfunded liabilities.
• Some major cities have already gone bankrupt such as Detroit, Michigan and Stockton, California.

A sad, sad state of affairs which is going to cause a day of financial reckoning and agony very soon. And again, all of this because American politicians have never had the ability, the will or desire to think long term and keep spending, and taxation, under control.

Nowhere have these poor political qualities been on display then in the Illinois state government and its state politicians. It has always been our intention that Illinois will be the first state to have its state government go bankrupt, but only after healthy competition from the states of New Jersey, California, and Connecticut. And a recent article by Adam Andrzejewski, writing for Forbes magazine, show why Illinois will likely win this dubious honor:

• 63,000 government employees in the state of Illinois, at the state, county, and local levels cost state taxpayers over $100,000 an annual salaries per employee, 63,000.
• These 63,000 government employees cost state taxpayers over $10 billion a year.
• The top ten paid city managers in the state earn between $200,000 and $300,000 a year with Lawrence Hillman of Glenview earning just under $300,000.
• Some auto impound lots supervisors earn $144,453 a year.
• A nurse at state prisons earn up to $254,781 a year.
• Some university doctors earn up $1.6 million a year.
• 84 small town Illinois city managers earn more than every U.S. governor.
• Three school superintendents earn will over $300,000 a year.
• While the mayor of Chicago earns $216,000, somehow the the city’s Commissioner of Aviation earns $400,000 a year and a Chicago deputy police chief earned $240,917 least year,  a total that included $146,860 in just overtime pay.
• A Chicago police communications operator, “an operator!”, earned $196,726 in a year which included $121,318 in overtime.
• Some prison barbers earn over $100,000 a year.
• There are more Chicago city employees earning over $100,000 than state employees earning over $100,000 a year.
• And many of those employees milk the system for overtime pay at higher pay rates since the city paid out more than a quarter billion dollars last year just in over time to about 1,000 city employees.
• Nearly 30,000 Illinois teachers and school administrators make over $100,000 a year.
• But not all of those 30,000 are employed, 9,305 of them are earning over $100,000 while in retirement.
• In the Township High School District 214, there are 500 retirees getting six figure annual pensions as compared to 640 currently active teachers earning over $100,000 a year.
• In Palatine Township High School 211, 596 current educators earn over $100,000 a year while 491 retirees from the school district are earning over $100,000 in retirement.
• Former Gov. Jim Edgar got $2.38 million from the University of Illinois (2000-2013) and has gotten at over $2 million in pension payments earned from his 20-year career as legislator, secretary of state and governor. 
• In Lake County, 628 local government employees earn over $100,000 a year.
• In water districts across the state, 1,432 employees earn over $100,000 a year.
• 348 Illinois park district employees earn over $100,000 a year.
• The current governor created a “personal assistant” position which has no defined state government duties for an annual salary of, you guessed it, over $100,000 a year.

Without reining in obnoxious spending like this, the politicians in the state have no chance of getting fiscally healthy. Instead, they continue to raise taxes, like the recent 32% increase in the state income tax rate. Increasing tax rates drives taxpayers out of the state in search of cheaper living which reduces the income tax revenue flow to the state government which causes the politicians to raise tax rates and the fiscal death spiral starts.

All of which leads us to assume that Illinois will be the first state to go bankrupt, likely quickly followed by California, New Jersey or Connecticut. Anyone disagree?

Adam Andrzejewski (say: Angie-eff-ski) is the Founder and CEO of OpenTheBooks.com – a national transparency organization with a database of 4 billion federal, state and local expenditures.
Adam Andrzejewski, CEO of OpenTheBooks.com, as published at Forbes.

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http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w