It's no surprise.
We have a huge unfunded public pension liability (the current figure being bandied about is $85 billion, which is a lot to bandy) and our two most recent governors are in jail.
According to 24/7 Wall Street (I saw this first on Yahoo! Finance) Illinois is the third worst state. Quoting now from 24/7 Wall Street's survey:
48. Illinois(If you're too impatient to read the entire linked article, 24/7 Wall Street also provides this link to a pretty neat interactive chart.)
Debt per capita: $4,790 (11th highest)
Budget deficit: 40.2% (2nd largest)
Unemployment: 9.8% (tied-10th highest)
Median household income: $53,234 (18th highest)
Pct. below poverty line: 15.0% (25th highest)
Although many states have budget issues, Illinois’ faces among the biggest problems. In 2010, the state’s budget shortfall was more than 40% of its general fund, the second-highest of any state. Both S&P and Moody’s gave Illinois credit ratings that were the second-worst of all states. In addition, the state only funded 45% of its pension liability in 2010, the lowest percentage of any state. Governor Patrick Quinn has made the now-$85 billion pension gap a top priority for the new legislative session beginning in January.
Anyway, 24/7 Wall Street's calculations, Illinois ranks ahead of only Rhode Island and California as the worst run states. (New York ranks 39th on this list.) North Dakota is the allegedly the best run state. Of course, North Dakota seems to be sitting atop a sea of oil.
North Dakota gets a nice mention in a new survey (published November 25) on Forbes.com, written by William Baldwin, entitled, "Do You Live In A Death Spiral State?" However, as the article name suggests, this is an article that accentuates the negative.
Guess what? Mr. Baldwin warns right at the outset, "If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent."
Baldwin lists 11 "Death Spiral" states -- but the (comparatively) good news is that Illinois is only third on this list. (New York is 6th; California is 10th -- the 11th and worst state on the Forbes list is New Mexico (which did, admittedly, finish 44th on the 24/7 Wall Street list).
Illinois fares so poorly on the Forbes list because we have 1.03 "takers" (defined as "the number of state and local government workers plus the number of people on Medicaid plus 1 for each $100,000 of unfunded pension liabilities") for every "maker" (someone gainfully employed in the private sector). By comparison, New York has 1.07 "takers" per "maker," California 1.39 and New Mexico 1.53.
But Mr. Baldwin's article includes a second element for compiling the unhappy members of the death spiral list, namely, "a scorecard of state credit-worthiness done by Conning & Co., a money manager known for its measures of risk in insurance company portfolios. Conning’s analysis focuses more on dollars than body counts. Its formula downgrades states for large debts, an uncompetitive business climate, weak home prices and bad trends in employment."
Illinois fares particularly poorly by this measure. But it's not all bad news. We have overwhelming Democratic majorities in our legislature and Democratic governor. Illinois is such a reliably "Blue" state that voters would elect a piece of cheese if it was nominated in a Democratic Primary. The downside here is that many of those now in office helped us achieve this parlous state of affairs. On the plus side, however, we simply don't have the problem of 'divided government' that bedevils the good folks in Washington as they approach the "fiscal cliff." We can solve our problems here in Illinois, maybe, if we can only muster the will to face them.