A report earlier this week revealed that Illinois isn’t paying the $9.1 billion annual interest payment on its pension debt.
You read that right: They’re not going to pay.
And it’s no wonder: As it stands, the Illinois state pension fund is underfunded by $130 billion. And likely to worsen if fund managers fall short of the 7% annual return that’s already baked into the cake.
Larry’s told you about the pension crisis in the past. And I knew it was bad in Illinois.
But not this bad.
Well then again, they haven’t had an annual budget for 19 months and they have accumulated $11 billion in unpaid bills.
What’s worse is that Illinois has the highest property taxes in the nation and the worst credit rating. As a result, residents are leaving at an alarming rate. And that’s crushing the tax base and pushing it toward decade lows.
Result: The debt spiral will get worse.
What are state legislators going to do?