Is Illinois Admitting that it is a “Failed State”?

Jun. 16, 2017
by Bob Adelmann

The Constitution guarantees every state a republican form of government. Other than that it focuses on the legitimate functions of the national or federal government. The states were invited, as most of them did, to adopt similar state constitutions, limiting state powers to providing essential services: courts, police protection and, over time, other services like power, fire protection, roads, and the like.

There are global indexes of failed states, with many of them naming Somalia as the best (worst) example: crime, corruption, short life spans, poor medical help, and wrenching poverty are the rule there. But with its admission that it can no longer pay general contractors to construct its roads, is Illinois becoming a failed state? Those contractors just received this letter from Illinois:

Right now the state has $14.5 billion in unpaid bills, an increase of nearly $4 billion just since the end of December, with no end in sight. When Republican Governor Bruce Rauner took office in January 2015 he promised he would bring order out of chaos by cutting government spending, and reining in out-of-control pension benefits and excessive teacher and administrative salaries. In brief, he managed to challenge directly state House speaker Michael Madigan, who, along with Democratic majorities in both the House and Senate, has sold out to the teacher unions. When Madigan proposed cutting pension plan contributions, the Supreme Court ruled that he couldn’t – that the state constitution guaranteed that the contracts were inviolable and fully enforceable. That’s when things went downhill. With no possible agreement over state spending – the state has been operating on a pay-as-you-go basis without a budget for nearly three years – unpaid bills began piling up as those contributions had to be paid first and other creditors were forced to take a back seat.

Mathematics and politics are directing Illinois’ future. The math is daunting: with $130 billion in unfunded pension liabilities (which continue to increase despite making the state making the court-required contributions), $14 billion in unpaid bills (and increasing daily), wealthy companies and individuals leaving (Illinois leads the nation in depopulation), property and sales taxes among the highest in the nation, and credit ratings that are eight full notches below the other states in the union, there’s no place to go but down from here.

The state’s inability to rein in its spending has caused a ripple effect, touching the state’s institutions of higher learning. They have been forced to raise tuition and borrow just to stay open and now the credit rating agencies have been busy downgrading their debt issues as well. On June 9, Moody’s Investors Service downgraded seven Illinois universities, with five of them now rated as junk.

As the Illinois Policy Institute noted, the budget stalemate “has led to cuts in state appropriations to Illinois universities. But the universities’ financial difficulties started [long] before the state’s budget gridlock and are largely of their own doing. Illinois colleges and universities have long overspent on bloated bureaucracies and expensive compensation and benefits, prioritizing administrators over students.”

On Wednesday, the president of one of those seven universities just downgraded – Northern Illinois University’s Doug Baker – suddenly announced that he will resign at the end of the month. This followed a bombshell state watchdog report that he and his administrators skirted state bidding requirements by improperly hiring consultants and paying them exorbitant salaries and benefits.

With the millions being poured into the state in support of a Democrat to replace Rauner in 2018, his initial support is melting away. Two-thirds of the populace supported Rauner in 2015, but as of March that support is less than forty percent.

If Rauner is replaced by a Democrat in 2018, then the combination of Democrat policies (and politics) and mathematical inevitability will turn Illinois into a failed state: unable to protect its citizens (see Chicago crime statistics), unable to build and maintain its roads, protecting one class of citizens at the expense of another, and unable to provide education for its citizens or a healthy regulatory climate for small businesses.

If Illinois isn’t a failed state, it will become one shortly. Just ask the general contractors who just received the “Dear Contractor” letter.

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An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at LightFromTheRight.com, primarily on economics and politics. He can be reached at bobadelmann@msn.com.

Sources:

Illinois Policy Institute: ILLINOIS’ UNPAID BILLS JUMP TO $14.3B

MishTalk.com: Unable to Pay Bills, Illinois Sends “Dear Contractor” Letter Telling Firms to Halt Road Work on July 1

Illinois Policy Institute: MOODY’S DOWNGRADES 7 ILLINOIS UNIVERSITIES, 5 ARE JUNK

Politico: How Illinois became America's failed state

Heritage.org: Illinois: The Anatomy of a Failed Liberal State

Chicago Tribune: Miller: Illinois in danger of becoming a failed state

Definition of a Failed State

Chicago Tribune: Northern Illinois University president to resign after report alleges mismanagement

 

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