Illinois is the real time bomb. My prediction - California will eventually pair property tax hikes (from 1% to 2% on every property in the state; limit prop 13

Illinois is the real time bomb. My prediction - California will eventually pair property tax hikes (from 1% to 2% on every property in the state; limit prop 13 basis to one property per person) with pension benefit cuts (10%; reduced COLA) to close the gap (after many articles like this one followed by much public wailing and gnashing of teeth). But once the political calculus is settled, at the end of the day, the money is there. California property taxes generate ~ $40 billion annually so you could double them and (factoring in a resultant decline in home prices and local economic activity) still pull out another $30 billion or so in annual revenue. But Illinois (Chicago) has much less ability to raise property taxes, which are already %-wise relatively higher on lower absolute property values, and the state's pension shortfall is significantly worse. The author doesn't mention it in this article but California's other major problem is Medi-Cal. Free health care for everyone in California below the poverty line. The Feds pay 95% of the bill currently under the ACA medicaid expansion but if/when they start to pay less then California has tens of billions of dollars in new liabilities to contend with. Combine one/both of these problems with another market crash - which would mean lower pension returns, but also decimate California's capital gains dependent tax collections - and it starts to look like a fiscal 'perfect storm'. I give Gov. Brown a lot of credit for talking about the need to build up a rainy day fund but I fear it's far too little too late.