The most powerful man in Illinois is feeling the heat from the state’s worst-in-the-nation financial crisis. With S&P downgrading Illinois’ credit rating again last week and Gov. Quinn forced to cancel a much needed loan, the state’s top Democrats appear to be turning on each other. In a harsh letter from Speaker Madigan to the AFL-CIO three days ago, the 30-year House Speaker blames the unions for the state’s insurmountable problems.
One week ago, credit agencies lowered Illinois’ credit rating to just above junk status. The only other state with a similarly bad financial rating is California. But as analysts point out, California has already hit bottom and is on its way back up. It has a future outlook of ‘positive’. Illinois on the other hand, is still on its way down, with an outlook designated by credit agencies as ‘negative’.
The major cause for Illinois’ terrible financial shape is its decades of unfunded government employee pensions. The state leads the nation in that category as well, with $96.8 billion in pension funding missing as of the end of FY2012. That number’s up from $83 billion at the end of FY2011. That equates to 61% of Illinois’ total pension funds, missing.