Illinois Faces 'serious crisis' in finances by 2010

Crain's Chicago Business reports:

Paying increased costs for employee pensions, health care for the poor and debt service will eat up virtually all new money the state can expect to bring in over the next three years, Comptroller Dan Hynes said Monday.

The state faces "a serious crisis" by 2010 unless lawmakers take a long-term view of state finances, Hynes told a business group in Chicago. But a spokeswoman for Democratic Gov. Rod Blagojevich said the administration was well aware of the problems when it came into office and has continued to alleviate them.

Hynes, a Democrat, said the state will have to pay about $1 billion more each year to keep up with growth in the built-in budget obligations. That's just about the amount of new money — through increased tax revenue, for example — the state has gained annually for the past 10 years, he said.

"If current trends continue and the state fails to address these looming issues, the state could face a serious crisis by fiscal year 2010," Hynes told the state finance task force of the Civic Committee.

Specifically, Hynes said the state's contribution to employee pension systems will grow from $1.4 billion this year to $3.4 billion in 2010, an increase of $700 million per year.

Would you want to own long term debt obligations of the state of Illinois?