Now we can see what happens when legislators let pension costs eat up an ever-growing share of the state budget. Here’s the state of play.

Democratic lawmakers and GOP Gov. Bruce Rauner are at loggerheads. The legislature passed a budget that would add another $7 billion in deficits; Rauner insists on at least moving toward a balanced budget. Operating without a formal budget for 18 months, Illinois has amassed $11 billion in outstanding bills.

Meanwhile, state employees represented by AFSCME are preparing to strike over unmet compensation demands. State Attorney General Lisa Madigan has filed a motion that would keep them from being paid without a budget — a move meant to force Rauner and the legislature to reach an agreement. A lack of paychecks could also muster sympathy for state workers despite their high-flying demands.

Excessive spending has plagued Illinois for years. The state increased taxes temporarily from 2011 to 2014 in an attempt to close its budget gap. While the higher taxes helped some, they also drove more business and jobs into neighboring states with friendlier business environments and higher economic growth.

The Illinois Department of Revenue notes that, had the state grown at the national average from 2000 to 2015, it would not have had to increase taxes and would still have $19 billion more in revenues. That would mean no unpaid bills, no budget crisis, and more money for schools and health care. Instead, the state now has the worst credit rating in the nation, and the exodus of jobs continues.

The biggest cause of Illinois’s budget woes is its personnel costs. Since 2000, pension and health insurance costs have more than tripled. In 2015, they alone soaked up more than a quarter (26.2 percent) of the entire budget. And it will get worse. The state’s unfunded pension liability tab is estimated to be $28,200 for every man, woman and child in Illinois.

Since public-employee compensation is the biggest and fastest growing component of the state’s budget, Rauner wants to get it under control. But AFSCME union, representing about 35,000 Illinois state employees, is demanding up to $3 billion in additional compensation—including four-year raises of 11.5 to 29 percent, five weeks of vacation, sweetened health care benefits; and a 37.5-hour workweek.

These demands come despite the fact that Illinois state workers are already the highest-paid state workers in the country. They also receive, on average, 27 percent more in total compensation than their private-sector counterparts (a difference of $17,250 per year in 2013).

The biggest disparity is in benefits, where state workers receive three times as much as their private sector counterparts. Those benefits include nearly $20,000 a year in health care benefits; retiree healthcare worth a total of $200,000 to $500,000 for employees with 20 or more years of service; and generous pensions averaging $1.6 million for career public employees. At $7 billion a year, Illinois spends more on pensions alone than it does on K-12 education.

Gov. Rauner wants to keep those costs from further crowding out funding for core functions like education, public safety and transportation. So he has proposed what are really quite modest reforms. They include having employees’ pick up 40 percent of their health care costs and shifting employees to a 40-hour (instead of their current 37.5-hour) work week.

Rauner and the legislature will have to resolve the budget impasse. Essentially, they have three options: get the state’s employee compensation costs under control, raise taxes and drive away even more businesses and workers, or do nothing. If they choose the latter, Illinois will become the first U.S. state to enter the list of insolvent governments.