In the world of investment, my beloved Illinois’ credit rating is equal to the African nation of Botswana. In reality though, this comparison is unfair to Botswana, which unlike Illinois, is enjoying a growing economy. After decades of Democratic rule kept in power by public sector unions, Illinois is the dead-beat sibling of all American states.
Illinois’ current credit rating is A-, the lowest of any state in the union, one notch about junk bond status. This dismal rating is driven largely by the state’s enormous pension costs. Currently, one in four tax dollars collected by the state goes to plug the pension hole. This is more than the state spends on elementary education (holy no child left behind Batman). Now, here is the real scary part: The great wave of baby boomer retirements is only just beginning.
Except for a couple years in the 1990s, Democrats have controlled the Illinois House for decades, all the while acting as the personal legislative arm of Speaker Mike Madigan, who, in addition to running the state Democrat party is the father of the state Attorney General. In the state Senate, the Democrats enjoy a super majority.
In the final analysis: The real power behind the Democrat majority lies with public sector unions. Unions spend untold millions each year lobbying and electioneering for legislators. This enables the public sector unions to place in power the people who decide their compensation and benefits with absolutely no attachment or regard to reality or sustainability.
Lookout Detroit…here we come.
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