The Illinois Pension Trap

Rich Miller's Capital Fax blog has a good post linking to today's Tribune editorial on the HUGE underfunded pension liabilities of the state of Illinois.

And according to the Trib, under Gov. Blagojevich, overall debt has ballooned:

The governor has skated on the fiscal edge, avoiding calamity by payroll-slashing ... and a lot of borrowing. Since he took office in 2003, the state's general obligation debt has jumped from $7.6 billion to $20.3 billion. Debt service now costs taxpayers $1.6 billion annually, double the pre-Blagojevich tab.

Good comments too, and opportunity to add yours. (though I don't agree that tax cuts will make the problem worse. Taxes and fees under the governor have driven business and jobs out of the state, cuts will bring them back, and more--look at the job growth of the US economy after tax cuts.) Via the WSJ, the Director of OMB lays out the numbers:

In May 2003, the president signed legislation accelerating broad-based income tax reductions and cutting capital gains and dividend taxes. Since then, with the president's tax cuts fully implemented, the American economy has generated over 4.7 million new jobs. In 2005, despite Hurricane Katrina and energy price spikes, our economy grew at an impressive 3.5%. This rapid growth is the envy of the industrialized world, and it is no accident. It is the product of the energy and industry of the American people, unleashed by tax relief.

Rapid economic growth has in turn led to rapid growth in federal tax revenues. In 2005, receipts grew by $274 billion -- at 14.5%, the fastest pace in nearly 25 years. Based on the administration's cautious economic forecast, federal receipts are projected to grow about 6% per year for the next five years. That means almost a trillion dollars of additional revenue to the U.S. Treasury. We are not in danger of becoming an undertaxed society.

You can't ignore the numbers.

And they don't look good for Illinois unless we have a change in leadership.