Pension Reform Won’t Help Illinois Budget
Illinois will see its budget deficit grow despite the recently-passed pension law.
A report made public Tuesday by the University of Illinois' Institute for Government and Public Affairs forecasts the gap between revenues and spending will reach about $13 billion in the next decade.
Economist Richard Dye, lead author of the study, said pension reform won’t help much because Illinois overspent so much in the past.
“We've been through all of these painful cuts and tax increases of the past four years. We just had this huge, threatening cut in the expected benefits that people were thinking they would get from their pensions, from the state. And there's still a problem left. And that's the message,” Dye said of the report.
According to Dye's predictions, Illinois' budget gap would lessen if lawmakers extend the 2010 income tax hike. But even that would still leave Illinois billions in the red.
The report also predicts deficits even if the pension law holds up to court challenges.