Election Day is about 10 weeks away, and it's the time of year when people start paying more attention to candidates and issues.

We need to make sure state leaders know we are expecting them to solve Illinois' burgeoning deficit problem. Lawmakers – most notably Democrats who have controlled this state for most of the last decade – have ignored the state constitution's requirement for a balanced budget. Instead, they've played an irresponsible shell game with our tax money. They have increased our state's financial commitments, skipped public employee pension payment obligations, and routinely delayed paying bills to businesses across the state. One consequence of the state's failed fiscal policies is that the three major bond rating firms have downgraded the state's bond rating eight times in the last 18 months.

Of particular note is the pay and benefits structure for the state's unionized workers. The current AFSME union contracts were negotiated in 2008 by the Blagojevich administration. During the height of the recession, when private sector employers were laying off some employees and freezing and cutting pay for others, our state government awarded more than 37,000 union employees 15.25 percent in annual pay increases over a four-year period. The prior contract with AFSCME Council 31 had been 13 percent over 4 years. The public employee pension and health benefit program for retirees is not only generous, but unsustainable. Today, all but about 2,700 of the state's more than 60,000 employees are covered by union contracts.

The shell game should be over. Continuing to rely upon one-time revenue sources is a fantasy. The state is finding it more difficult to borrow money or justify the interest costs. The continued abuse of vendors is unconscionable.

But many of the state elected leaders are still ignoring reality and can't make tough decisions. That's why the Illinois Chamber supports the Illinois is Broke Coalition and its efforts to pressure lawmakers to balance the state's budget.

The members of the Coalition agree that:

1. Illinois is in the midst of a serious fiscal crisis. Our state's budget is radically imbalanced; its costs significantly exceed revenues. We must have real balanced budgets in Illinois – rather than budgets based on federal bailouts and continued borrowing.

2. At the core of the fiscal problem is the state's retirement benefits system – pensions and retiree health care. They must be reformed. The recently enacted pension reforms for future state hires are a step in the right direction, but do not go far enough. Other areas of the state's budget must also be restructured to reduce costs and improve efficiency.

3. We favor more investment in Illinois, more companies moving to Illinois, more jobs for Illinois. We are for better schools, better health care, and a strong safety net for our most vulnerable citizens. But because of our enormous retirement-related obligations, high costs and unbalanced budgets, investments and jobs are leaving the state. The tax base is eroding. The health care and retirement-related costs are crowding out other priorities. To reverse these trends, we have to fix our state's finances.

4. Raising taxes without reforms and cuts is not the right answer. Major budget reform and cost reductions should be implemented before consideration is given to raising taxes.

R. Eden Martin, president of the Civic Committee of the Commercial Club of Chicago, wrote the following article. This article provides important information about the extent and causes of Illinois' financial troubles and what we can do about it before the November election.

Illinois is Broke: Let's work to solve the State's budget crisis

In the past year, Illinois' serious fiscal crisis has attracted an increasing amount of attention in the media and with the public. Now that Illinois citizens are beginning to understand the urgency and depth of the state's financial problems – and the effect they have on education, local governments, and essential social services – we believe this crisis should be the most important issue in this year's elections.

Our goal is to make sure lawmakers find the political will to deal responsibly with the state's unbalanced budget and the massive unfunded retirement obligations.

Illinois' budget has been out of balance for years. But the state's current imbalance is one of the worst – if not the worst – in the country. Our state collects recurring revenues in the range of $28 billion per year for general revenue fund purposes. The revenue numbers go up or down each year, depending on the economic activity within the state (which affects tax collections). But we spend or commit to spend 50 percent more than we take in.

The Civic Committee of the Commercial Club of Chicago has estimated that the state's real budget deficit during this fiscal year – reflecting not just cash items but increasing commitments to make future payments – is in the range of $14-15 billion. Each year that budget deficit has been getting bigger.

You might be wondering how we can run a deficit when the Illinois Constitution requires a balanced budget. The answer is that the state runs its budget on a cash basis. Costs that are not paid in cash this year don't count – even though they will have to be paid someday. Revenues that are borrowed this year count as revenues – even though the debts will have to be repaid. The increasing unfunded obligations of the state's pension plans don't count because they're obligations to make future payments, not to pay pensions this year.

The state has thus been ignoring its true economic budget situation for decades. The reason we notice it now is that the funding requirements for these mounting obligations and debts are beginning to crowd out expenditures for programs we have regarded as essential: support for schools and universities, support for health care and social service agencies, and the like. Also, the economic decline that began in 2007-08 has reduced the state's tax collections and made the situation even worse.

At the heart of the crisis is Illinois' retirement system – its pensions and its retiree health insurance benefits. These are pensions and retiree health costs paid to state retirees and other members of state pension plans. (Similar benefits – and unfunded liabilities – exist at the municipal level throughout the state.)

The total state pension costs this year – for the five state pension plans – together with the accumulating obligations to pay health costs for our retirees, amount to in excess of $10 billion. The reason this number is so enormous is that the unfunded obligations are growing so quickly. The state now has about $80 billion in unfunded pension costs. These are growing at the rate of 8.5 percent per year (all other things being equal) – as the discount rate reverses. The state also has about $40 billion in unfunded retiree health care costs.

Another reason these obligations are so large is that the benefits are so generous. State employees can retire at age 55. With enough years of service, they will receive pensions for the rest of their lives. At age 67 they will also receive Social Security. And the pension is adjusted upward each year by 3 percent for "cost of living" – even if there is no inflation. By the time these retirees hit normal retirement age (under the Social Security system), they may receive more in retiree benefits than they were earning during their last year of state employment.

Moreover, at age 55, a retiree can go to work in another state job – earning a salary, and piling up more pension accruals.

In addition, that retiree, with sufficient years of service, gets free medical insurance for the rest of his life – up to Medicare age. At that point the state pays 100 percent of the Medicare supplement. The state-provided health insurance is not just a Cadillac – it's a Rolls Royce. The state pays the doctor or hospital bills – anytime, anywhere, for any service. There are none of those pesky "managed care" requirements.

If the employee works for the City of Chicago, he doesn't have to wait till age 55 to retire with full benefits. He can retire at age 50 with enough years of service.

Virtually nobody in the private sector gets that kind of retirement deal – where one can receive a full "defined benefit" pension at age 55 – or 50 – without caps and with "COLA" protection.

Illinois' system suffers from two fundamental defects: It is unfair to the taxpayers, who don't get that kind of deal for themselves; and the State of Illinois can't afford it.

We need real pension reform – not only for "new" (not-yet-hired) employees, as was passed in the last legislative session, but for current ones as well. We also need improved pension funding. Otherwise, our retired state employees and other pension fund members may be out of luck when their pension fund runs out of money.

This is of concern not only to the state's taxpayers. It has to be of concern to the state's employees – and to their representatives. If a pension fund does run out of money, it is unclear whether the state is obligated as "guarantor" to make good on the pension obligation. The Illinois Constitution provides that the pension fund member has a contractual relationship with the pension fund, rather than the state itself.

Moreover, the state has exercised its powers of sovereign immunity to limit the rights of claimants against the state. They must bring their suits in the Court of Claims, where claims for breach of contract are limited in amount.

And, as we know, the state doesn't have the money to make good on billions of dollars of pension claims.

A 1-percent increase in the state's personal income tax is estimated to increase the state's revenues per year by about $3 billion. Without reform and serious budget cutting, the state would thus have to increase its personal tax rate from 3 percent to about 8 percent to cover the $14-15 billion budget deficit. That would be intolerable to most taxpayers in the state, whether they are individuals or corporations.

The state's fiscal crisis is of such enormity that it cannot be solved simply by revenue-side solutions. There must be budget reforms and cuts. The core of the problem is the pensions and retiree health care programs. That's where the reforms must start.

This is not just a problem of economics. It's a problem of democracy. Our state leaders must deal with these problems. That is why we elected them. We have an election in November. Next time you attend a meeting with candidates, hear a speech, or are asked for campaign support, please consider asking the candidates what they will do about the budget crisis. Ask how they intend to deal with the retiree benefit issue. Ask if they think it's fair to taxpayers to have to continue to carry the heavy burden, every year, for state employees who retire at 55 with full pensions.

If you want more information, including how to contact your legislator or candidates in your district, visit IllinoisIsBroke.com.