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Illinois’ Economy at a Standstill?

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    Illinois State Treasurer Dan Rutherford on the continued debt problems facing the state.

  • Duration 4:45
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The state in the worst financial shape of all of them is Illinois.

Remember it just counsel a 500 million dollar bond auction because it couldn't afford the high interest rates that would demand it.

In state woke up pensions alone it's 96 billion dollars it has money six billion dollars -- -- unfunded liabilities in the -- big time.

And because of -- Stanton -- is down right in the State's debt in giving it -- -- credit rating of all the fifty states.

Now -- Illinois State treasurer Dan Rupert and -- is with us from Illinois -- welcome to welcome -- good to have you with us.

But thank you very much -- -- -- be back on reduced I've got to put it to you that when you counsel that bond auction and you so much in debt you can't pay even your own vendors.

You'll state financially is at a standstill more from our right in saying that it -- what.

-- -- -- -- No let me just we can't reduce it is very tough situation and -- that full disclosure is the treasure the state of Illinois those issuance of the bonds don't fall under my purview.

I happen to have gotten elected -- -- 2010 the first Republican state of Illinois quite some time so the role -- -- plane literally for the last two years is.

I don't wanna call pulling the fire alarm but pointing out the type of things that you just highlighted about the unfunded -- our pension systems the income taxes were just raised.

And it is a tough situation here and it's time for my capital city Springfield.

Legislators and governor to be able to put it together so that we can move this state on forward but what are you gonna do you can't borrow money at a reasonable interest rates I mean you can't pay your own about nine and a billion -- -- -- you can't.

What what do you do you know -- -- we we should be going -- borrowing more money and the capital projects perhaps but the idea of borrowing more money.

To pay for the operations of government is something that is the state treasurer I said no to absolutely.

Here this is bottom line is we have to have the people around the table from the public employee unions and -- policy makers understand the type of defined benefit we have.

For our engineers and for the retirees and the type of health care that we have delivery for the for those participants.

Is not sustainable that all of the other things that one may try to do here and our state capital affect my governor and the democratic controlled general assembly.

Raising income taxes two years ago.

And the outstanding bills toward vendors in January 2011 was eight point five billion dollars but -- in January 2013.

The outstanding.

Bills toward vendors is nine billion dollar -- look into -- -- evident that it is the pensions of it has to be resolved it has to be resolved it's not been resolved despite years of wrangling and you're not gonna resolve it in the -- Thomas is not gonna happen so.

I have to -- all you do.

You you can later that I will highlight I don't I don't paying your bills is that it.

They'll hear I don't disagree with the that he can't be solved in the near term.

We have to address it in the near term it will take time -- too.

Work itself through the system but if we don't stop the bleeding right now and it has to be done in the past be done in this session of the general assembly.

This year to get that thing stopped.

And and and from there than we go ahead we built for being built on top -- got from there but what are you doing right now the bills coming due you just not paying your bills that.

They'll -- there there there actually is increase revenue coming in effect in 2014 fiscal year.

The increase revenue projections -- 600 million dollars that is without raising any taxes or fees -- just financial revenue growth.

So where our problem is is also the increase payments in the pension systems is 950 million dollars so it's pretty evident the natural revenue.

And taking out the payments necessary in the pensions they are far exceeded by the by the liability so we have to go.

Deal -- this pension obligation and then we've got the cash flow to pay for our bills what are you doing in the immediate future he tried to borrow 500 million you couldn't borrow it.

In the immediate future the next days and weeks and a couple months ahead.

What you do it.

What we're doing an immediate future again this is on the governor and the general assembly to address the pension issue because the cash flow is coming and and it cannot be siphoned off to go to the public pension systems mean that's the bottom line to as much as.

-- we try to go back and forth to added you know you can't -- -- raising more taxes you can't go out.

And and and do cut in the budget yes but the ideas of 350 million dollar spread can't be met but so the idea is absolutely -- out there billion Natalia but only -- I don't -- -- -- vendors they -- the outstanding pharmacies nursing home school districts and so -- so.

They are being paid it is of the -- it is behind.

And believe me I don't like it that's why thinkers this governor and this general assembly to get their act together.

Okay at Dan Rutherford state treasurer Illinois Republican what a pleasure thanks for joining us and we wish you well in a difficult and -- get.

We are gonna keep the -- -- keep the pressure on thank you thank you.

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