Illinois will likely expect the Fed to bail them out. I hope it doesn’t happen, because Illinois voters supported extremely generous state employee pensions. It was common knowledge in Illinois even 30-40 years ago that state jobs paid much better than the private sector, offered great benefits, and guaranteed extremely generous pensions. Illinois politicians handed out largesse like there was no tomorrow and earned the loyal support of state workers in return (similar to what Democrats do at the federal level). In a sane world, economic reality would force Illinois to renegotiate for more reasonable, sustainable pensions, not impoverishing pensioners but requiring them to live within what taxpayers can reasonably afford to pay for the services that were provided.
Just tax the dang government pensions. Can even be progressive about it. Hit the rich progressives harder, the little guys not so hard. Hey they want to tax us non-union taxpayers for it after they’ve (like this year) taken what the actuaries said were needed as contributions and instead spent that on more current wages. They’d still be getting everything promised them, just less taxes. Same as we get. Doesn’t apply to private pensions, which followed all regulations and paid all along as the actuaries required.