Will California's overbearing teacher's union bankrupt the state?

California is quickly heading down the same path that has led Illinois to the precipice of bankruptcy. After years of irresponsible budgeting, the latter state is nearing the point of no return. Some experts predict that within a few years, Illinois will be the first entire state to officially declare itself insolvent.

There are ominous parallels between the fiscal landscape of Illinois and California, the most prominent of which is the presence of large and extremely powerful teacher's unions. To understand what's very likely to transpire in California, should strong and immediate corrective action not be taken, it's instructive to look at the case of Illinois.

Currently, Illinois is mired in a completely untenable financial situation. The state had total tax revenues of $32 billion, in fiscal year 2016, but it is still running a $6 billion deficit. This represents a deficit of nearly 20 percent of its total budget, a completely unsustainable situation. A full quarter of state spending is currently going to cover shortfalls in the state's public pension system, which is only funded at approximately 30 percent of liabilities. What's worse, the unfunded liabilities have been growing at a rapid pace, both proportionately and in terms of raw dollars, since 1981. \

On top of this, Illinois already has the highest taxes of any state in the country. Many economists believe that Illinois has already severely stifled business and has done irreparable damage to its citizens. It has some of the poorest and most violent towns in the country, as well as dismally performing public schools.

California is on exactly the same track

Many experts are sounding the alarm, pointing to Illinois as a stark example of what will soon befall the Golden State. At the root of this problem, experts contend, lies the nearly unquestioned political power of the California teacher's union, CalSTRS. The unholy alliance between the state's political apparatus, which has notoriously been nearly all Democratic, at both the state and local levels, since the mid-90s, has led to a situation where compromises that were absolutely necessary, namely, cuts to pensioner benefits, have not been made.

This has led to a similar level of state spending in California going to pensions as it has in Illinois. With schools also being forced to cough up cash for pension shortfalls, many of California's most vulnerable students are seeing cuts to programs they rely on. Unless something is done, California may be the nation's second state bankruptcy.