That characterization should come as no surprise to anyone who lives around here. From the piece (my emphasis):
The state faces a range of problems. Illinois has one of the worst-funded pension systems in the nation, [estimated to be more than $100 billion short]. Chicago also has a pension crisis, leading Moody’s Investors Service to downgrade its credit rating to junk status on May 12, potentially threatening the city’s ability to borrow.
And the state faces an expected budget deficit of $6 billion, which it needs to address quickly. With just days before a legislative deadline, the new Republican governor, who ran on cutting costs and holding down taxes, is at odds with Democrats who hold a veto-proof supermajority in the legislature.
[Chicago] is facing about $20 billion in unfunded pension liabilities, an additional $550 million yearly pension payment it must start making next year, and a school system that has a $1 billion deficit of its own, underfunded pensions and a new contract for teachers under negotiation.
Hoo boy! We're in trouble. What are we going to do? Some people around here are even using the "B" word -- bankruptcy.
Now while I don't know how this is all going to play out, I do know that California faced a similarly "dire" fiscal crisis just a few years ago. After Jerry Brown was elected governor in 2010, the state took the "unusual" step of cutting spending and raising taxes.
Could Illinois do the same thing?
First a little perspective: the state of Illinois has the fifth-largest economy in the United States. That's right -- Illinois generates about $720 billion a year in GDP. (That's billion, with a "B.") Every year. That's about the same as the economies of Saudi Arabia or the Netherlands.
So while Illinois' pension shortfall of $100 billion and Chicago's $20 billion are certainly eye-popping numbers, they don't seem so "dire" when you consider the amount of wealth created by the state's and the city's economies.
Does Illinois and the city of Chicago have the ability to pay its bills? Of course! Maybe we all just need to take a deep breath.