Illinois' debt could soar to $34.8 billion in the next five years unless something is done about the state's enormous backlog of unpaid bills, according to a watchdog budget report released Monday.
The Civic Federation of Chicago warned that Gov. Pat Quinn and Illinois lawmakers must take immediate action to curb the state's approximate $9.2 billion in bills -- or else the state will continue to face "financial disaster."
“The Governor and General Assembly must act now,” said Laurence Msall, president of the Civic Federation, in a statement. “Failure to address unsustainable trends in the State’s pension and Medicaid systems will only result in financial disaster for the State of Illinois.”
The report says an "unsustainable rise in state Medicaid" costs is largely responsible for Illinois' debt. And current trends suggest conditions will worsen, leaving a $21 billion backlog of unpaid Medicaid bills by the end of 2017.
Rising pension costs won't help either, as Illinois deals with total unfunded liabilities of $83.1 billion. Msall said the state can no longer afford to grant automatic increases for pensions not tied to cost of living increases. The federation recommends that current Illinois retirees and employees hired before Jan. 1, 2011, receive the same annual benefit increases as new workers.
If that weren't enough, the state's operating deficit is expected to increase from $508 million this year to $3.2 billion in 2017.
"The State of Illinois' continued practice of spending more than it takes in and pushing operating expenses into future fiscal years is a growing threat to our most vulnerable social service providers, local governments and anyone doing business with the State of Illinois," said Msall.