Why pension bonds are creeping back into the conversation – Crain’s

Proponents say a pension obligation bond, or POB, would ease fiscal pressure as the city confronts a $1.2 billion budget gap, $31 billion in unfunded pension liabilities and a projected $756 million increase in required annual pension contributions over the next six years. Critics warn that POBs have worsened fiscal problems for other cities and raise the specter of former Illinois Gov. Rod Blagojevich’s ill-fated POB, which failed to solve the state’s pension problems.

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The Alternative to a Bailout for Fiscally Mismanaged States – Opinion – Wall Street Journal*

“If Illinois Gov. Jay Pritzker were to trim his state’s per resident spending to match Texas’, he would save his taxpayers $22.3 billion a year—and there would be no need for any income-tax increase…. Taking the scalpel to state agency budgets will create angst for governors, lawmakers and the lobbyists hired to defend unnecessary spending. But policy makers have a responsibility to make the most effective use of taxpayer money. Congress, likewise, should understand that bailing out profligate state and local governments will only ensure more of this bad behavior in the future.”

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