Bringing this all back to the Pension issue (where this semi-political digression started), consider the situation in Illinois from the perspective of an Illinois legislator:
According to
this link that I found, the State of Illinois already spends more than a quarter of its revenues on total pension costs. That is staggering if you think about it and give Illinois State legislators very limited ability to make any changes.
If 25% of your total revenues are gobbled up by pension costs you really only control the other 75%. It is worse than that though, Illinois' pensions are massively underfunded. Per the article, Illinois pension debt is already $137 billion and would grow to $200 billion if they are forced to bail out the local pension systems (mostly Chicago). Per
this link, Illinois' total annual revenues are only about $34 billion and they are ALREADY spending more than their revenues and under-funding their pensions.
It is worse than that though, in government just as in personal budgeting there are a lot of items that you (or your legislators) don't really have a choice about. For just a few examples, 11% of Illinois' total revenues come from the Feds but Federal money ALWAYS comes with strings so they are legally required to spend it on the Federally mandated purpose. Ie, the State of Illinois can't just take Federal Highway money and use that to shore up their pension systems.
In addition to the money that comes with strings, there are a lot of government expenditures that are either legally, morally, or politically unavoidable. We or Illinois legislators can argue about exactly how much Illinois should spend on plowing, paving, and repairing roads but nobody will seriously argue that they should just stop providing roads (or bridges or a whole host of other things).
It is worse than that though because they are already $200 billion behind because that anticipated bailout of local pension systems isn't really a question of "if", it is a question of "when". Just like the hypothetical Detroit beat cop that I mentioned several pages ago, Chicago beat cops who have spent the last 30 years trying to keep Chicagoans from killing each other has definitely earned a pension. When Chicago follows Detroit into pension-induced bankruptcy it will be neither morally nor politically possible for the state of Illinois to just watch from the sidelines while retired Chicago Cops, Firefighters, etc form bread lines begging for handouts.
Bottom line, Illinois is already operating an an annual deficit of ~$5 billion and they have ~$200 billion in pension liability. If they cut expenditures or raised taxes by 20% tomorrow that would only provide them with roughly a $3 billion annual surplus and it would take nearly 70 years for those $3 billion annual surpluses to accumulate enough money to wipe out the pension debt. If they raised taxes and cut expenditures by 20% each that would give them somewhere around an $11 billion annual surplus but it would still take 20 years to wipe out the pension debt.
It is worse than that in Ohio though because term limits give our legislators absolutely zero motivation to solve this conundrum. It is axiomatic that any solution will be politically painful. Nobody wants a 20% tax hike or a 20% spending cut and both at the same time would be brutal both economically and politically. If I am term limited out in a few years why should I support such items when I could just kick the can down the road and let some future legislator deal with it?
