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$100 Billion in Liabilities
Thu September 26, 2013
Still Waiting for Illinois Pension Report
State Representative Elaine Nekritz (D-Northbrook) is careful these days when she talks about the status of pension deliberations.
She’s especially careful when asked how close legislators are to reaching a deal.
"I have actually stopped making predictions publicly because I have been so wrong that I'm a little bit embarrassed at this point," she said.
Nerkitz is the House Democrats' point person on pensions, and a leader of the so-called conference committee charged with finding a compromise.
The bipartisan, bicameral panel was formed after the House and Senate this spring stalemated over the best way to reduce the state's pension costs. Illinois has yet to find a way to pay for nearly $100 billion in future pension liabilities.
There's repeatedly been word the committee is close to completing its mission, but the group has yet to release any recommendations.
Nekritz said the committee is focusing on the most expensive benefit paid out to Illinois' retired state workers: the automatic, 3%, compounded payment increase retirees receive every year.
The main idea would reduce those increases to one-half the consumer price index, with details yet to be worked out. The loose plan also calls for delaying when current state workers would begin receiving those pension bumps. In exchange, workers, including public school teachers and university employees, would have less of their paychecks deducted to pay for retirement.
The fact that the committee's been fixed on this version of a pension overhaul for at least a month indicates it could be the real deal. But the lag time also hints at serious problems with it.
Representative Jil Tracy (R- Quincy), who’s also a member of the conference committee, said when House Republicans were briefed on the plan, "for a multitude of reasons they did not favor the framework that was laid out."
For some, it goes too far. For others -- including Tracy -- not far enough; she said it means about 20% of Illinois' budget could still go toward pensions, which she said is unrealistic.
"We don't want to see us have to revisit this on down the road," Tracy said. "We want to make these pension systems solvent, sustainable in the long term and have a stable budget as a result."
Ultimately, the plan will need to win the support of the two men at the heart of the pension stalemate -- Senate President John Cullerton (D-Chicago) and House Speaker Michael Madigan (D-Chicago).
Bill Knight – March 21
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$100 Billion Unfunded Liability