President Donald Trump called out Illinois lawmakers for mismanagement on Monday morning, tweeting the state as an “example” of a government that has demonstrated poor control over its own finances.
“Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking,” tweeted Trump.
Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?
— Donald J. Trump (@realDonaldTrump) April 27, 2020
The president’s accusation that Illinois has been mismanaged comes two weeks after Democrats in the state senate wrote a letter to Congress asking for a $30 billion bailout, citing the “unprecedented situation,” with an additional $10 billion thrown in for the state’s grossly underfunded pension system.
Andrew Biggs, a scholar at the American Enterprise Institute, recently noted in The Wall Street Journal that Illinois has long been “at the forefront of pension mismanagement.”
From 2001 to 2019, Illinois made only 80% of the actuarially determined contributions to its main state plan. Worse, Illinois assumed a roughly 8% annual investment return on those contributions, but received an average of only 5.2%. Over that same period, the average benefit paid to a retired full-career state employee rose from $41,700 to $49,700. Further, pensioners received a guaranteed 3% annual cost-of-living adjustment, even though the Consumer Price Index rose only 2.2% annually over that period.
Leading Illinois Democrats have denied the president’s accusation of mismanagement, with Chicago Mayor Lori Lightfoot saying that her city pays more in taxes than it receives and was actually “very well run.”
“What I know is taxpayers in this city in the state pay a lot to the federal government, and all we’re asking for is our fair share,” said Lightfoot, reports NBC News Chicago. “And that is what should be involved in the calculus.”
Governor J.B. Pritzker weighed in on the president’s remarks — while deflecting away from the accusation of mismanagement in the same manner as Mayor Lightfoot— except the governor also decided to blast Senator Mitch McConnell (R-KY).
“Considering [McConnell] comes from a state that gets more federal money than it gives in federal taxes, he’s a recipient state from the federal government, and the rest of us should benefit considering the coronavirus and its effects,” said the governor.
According to The Chicago Sun-Times, Priztker has claimed that he didn’t know about the contents of the letter requesting pension money until after it was sent to Congress. Reuters reported in December that the state’s unfunded pension liabilities had reached $137 billion.
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