State debt

Many states in the US are facing long term debt problems which are adding to the cost of living and causing people to move to states that are not affected by this. A good example is Illinois. For more than 50 years state workers watched their pension benefits grow and the state failed to prepare. As the population ages and more people retire the problem gets worse. The state then has to raise taxes to cover the debt which means young working people will leave the state leaving fewer people to tax. Thus, taxes must be raised again and more people leave and leads to a death spiral. Illinois is trapped in the worst pension crisis in the nation. The state’s five pension systems carry about $144 billion in unfunded liabilities. Illinois families pay the highest effective property taxes in the country, with most of those dollars being spent to keep up with overpromised pensions rather than to create better schools, safer streets or improved services. In the past Illinois has diverted pension funds into the general fund. Illinois lost a congressional seat in the 2020 census and is scheduled to lose another seat in the 2030 census. This means fewer federal dollars coming in. New York and California are in similar situations. It is easy to hand out benefits today that you don’t have to pay for until later but later has arrived.