If Illinois Has “Weak Financial Management” Then….

A new study by S&P Global on the fiscal situation of the states included a handy chart on each state’s bond rating.  As of Friday that chart is outdated.

CNBC reported:

S&P Global Ratings dropped Illinois’ credit rating one notch to BBB on Friday and warned it could fall further absent a long-term solution that deals with the state’s chronic structural budget deficit and pension woes.

…………

S&P said another downgrade could follow “should the state continue to demonstrate a lack of ability or willingness to adopt a long-term structural budget solution that also incorporates a credible approach to its long-term liabilities.”

The credit rating agency added that continued political gridlock could affect Illinois’ ability to pay off its debt.

Getting back to that S&P Global chart….Illinois has:

  • Pension Funded Ratio: 40.2%
  • Net Pension Liability per capita: $9,078
  • Debt, pension, and OPEB per capita: $14,320
  • GO rating/outlook: BBB+/negative

New Jersey has:

  • Pension Funded Ratio: 37.8%
  • Net Pension Liability per capita: $10,648
  • Debt, pension, and OPEB per capita: $24,065
  • GO rating/outlook: A/negative

Can the political gridlock in Illinois really be that much worse?*

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.

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* Serious question. Objective numbers clearly paint a direr picture in New Jersey which passes legislation this way and plays politics this way. What can Illinois possibly be doing worse?

 

9 responses to this post.

  1. Posted by Anonymous on October 3, 2016 at 6:39 pm

    Anonymous on October 3, 2016 at 3:01 pm
    For general service retirees, like Lightsey, the settlement translated to a 4.5 percent reduction in each monthly pension check. Cost-of-living allowances also were eliminated.

    Ok John, so here’s Detroit’s retiree bankruptcy solution. NJ’s already done the COLA freeze (elimination) and let’s assume the 4.5℅ reduction in base allowance. Now what’s the taxpayers adjusted bill? Who’s kidding who…..

    Reply

    Reply

  2. Posted by Anonymous on October 3, 2016 at 6:42 pm

    Just one of many copy and pasted!

    Anonymous on October 3, 2016 at 3:51 pm
    https://www.google.com/amp/s/amp.businessinsider.com/us-government-7-trillion-pension-shortfall-2016-4?client=ms-android-huawei

    From Local to State and onto Federal governments.

    Reply

  3. Posted by Anonymous on October 3, 2016 at 10:01 pm

    So I’m trying to understand what’s wrong with the DBP concept for State and Local versus Federal, beside the Feds can print money and continue to devalue the dollar? I know, no disrespect, but don’t mention a certain group -OH NO!! Here’s the kicker, they’re probably blogging here against the public’s and voting for Trump. Go figure, gotta love this Country!

    Reply

  4. Posted by Anonymous on October 4, 2016 at 9:13 am

    TB on September 17, 2016 at 5:30 pm
    More and more people are beginning to realize that Defined Benefit plans like public pensions are not sustainable, including the private sector which has more or less done away with them. Here is my solution to this looming crisis that is only going to get worse without any correction of course:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Please help spread the word…

    Reply

    Like I said don’t be shy, share the love, (however tough it might be) Federal pensions (including military) are (see above)…..

    Reply

    • Posted by Jim on October 5, 2016 at 12:10 pm

      Defined Benefit Plans are certainly not sustainable if they are not funded. Their sustainability is dependent on honesty, something which is in very short supply in this country.

      Reply

  5. Posted by MJ on October 5, 2016 at 9:22 am

    More and more people are also beginning to realize how these public sector unions and corrupt politicians are sucking the state dry. We need only to look at AC and that dire situation where they are clawing onto the current defunct system for dear life. More and more people are realizing that in order to pay for these overly generous tax payer funded pensions and benefits most folks will have to work well into their 70s while publics get to retire in their 50s.

    Reply

    • Posted by S Moderation Douglas on October 5, 2016 at 1:19 pm

      ” most folks will have to work well into their 70s while publics get to retire in their 50s.”

      How tiresome. Some public’s actually do retire in their 50s. Guess what? So do some privates. And some “publics” work well into their 70s. But, according to Gallup, the average age the nation as a whole retires is 60. Same as the average age for public retirees. Has been for more than the last decade. Before that, average retirement age was 57-58. (Average age of retirement has been increasing the last few years, for obvious reasons… for both sectors.)

      What might be more interesting is to compare retirement ages of different income groups. I haven’t yet found any such data, but from my own personal anecdotal evidence, most of those public sector employees I worked with retired at about age 65. These are people who earned ten to fifteen percent less than the “average” salary for the area.

      On a somewhat related note, I stumbled across a website that I’m surprised I hadn’t seen before.

      http://yourpublicmoney.com/index.shtml

      Meep may bring it up in a forthcoming article about Mendocino County, if she sees it. But I found it quite by accident, following successive links. John Dickerson has been hard at work for over a decade, I can’t believe he isn’t more well known.

      Reply

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