Illinois Wants U.S. Taxpayers to Bail Out State Pension System
Article from For Liberty by Norm Leahy.
Illinois Senate President Don Harmon asked the state’s congressional delegation to secure at least $10 billion in federal funding to bail out the state employee pension fund.
Illinois currently has a $138 billion unfunded pension liability. In 2019, well before the coronavirus outbreak, Moody’s flagged the state’s pension liabilities as the highest in the nation.
Harmon’s appeal to the congressional delegation was clear:
Harmon specifically asked that the feds “Provide direct cash assistance to the pension systems” or “Offer a low interest federal loan to aid Illinois in our efforts to restore and maintain retirement security for public sector workers …”
The Reason Foundation’s Jen Sidorova wrote that a federal bailout would send the wrong signal to state’s like Illinois:
If federal taxpayers are asked to bail out Illinois’ pension system, it would set a precedent that would eliminate much of the motivation that states have to make responsible changes and pension reforms that can put retirement plans on the track to solvency.
That’s a nice way of saying a bailout would reward bad behavior, and likely encourage more states to shift the retirement burden for their public employees from local taxpayers to the nation’s taxpayers.
Image Credit: By Jericho [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons