A new report released today said Illinois’ total state debt is $271 billion, or $21,000 per Illinois resident. If we were smart, we’d all flee to Tennessee, where our personal debt shares would plummet by 75 percent and no income tax to boot!
State Debt Report 2012 by State Budget Solutions added up debt in each state across five categories: regular outstanding debt, the fiscal year 2013 budget gap, outstanding unemployment trust fund loans, unfunded public-employee pension liabilities (at market value), and unfunded public-employee “other post-employment benefit” (OPEB) liabilities, mainly retiree health care benefits. The total across all states is a staggering $4.19 trillion in debt.
Illinois’ total state debt is fifth largest in the country. California may top the list with $617 billion in total state debt, but its per capita debt is far less than that of Illinois: $16,386 compared to $21,067 in Illinois.
Here’s a breakdown of Illinois’ total state debt:
One could argue that some of these numbers should actually be higher based on recent revisions. But their figures show clearly that Illinois’ debt problem cannot be fixed by eliminating the budget gap – it’s only $1.8 billion of the total. Illinois’ problem requires systemic, structural solutions involving public pensions and OPEB benefits. And success requires bold political leadership to confront the public-sector unions on this issue.
If Illinois lawmakers do nothing, as they have, state debt will break the backs of Illinois residents. The debt drag is roughly $21,000 per Illinois resident and $56,000 per Illinois household.
Why would anyone stick around Illinois to pay off this debt by paying higher future taxes? It’s easier to pack up and leave the state for greener pastures and fiscal responsibility. Tennessee’s debt burden is only $5,300 per person; Nebraska is lowest at $4,200.
People are fleeing Illinois: one person leaves Illinois on net every 10 minutes. And entrepreneurs are avoiding Illinois and Chicago, taking their ideas and investments with them.
The exodus will quicken if Illinois lawmakers don’t fix the huge debt problem staring them in the face. The best place to start is switching all public employees to 401(k) plans.
But where is the state’s political leadership on this issue when needed most? Check the beds of union bosses.