Eye On Illinois: Candidates for any Springfield office need a pension proposal

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Pensions.

Does that word send a shiver down your taxpayer spine?

If not, extra context may help – or hurt. The Commission on Government Forecasting and Accountability’s recent report estimated Illinois’ unfunded pension liability at $130 billion in fiscal 2021.

Staggering as that figure may be, it’s the lowest since fiscal 2017 and represents a massive drop from $144.2 billion in fiscal 2020. Capitol News Illinois said Illinois’ five retirement funds are funded to 46.5%, up from 39% just last year and the best funding ratio since 2008.

The “good” news is based entirely on investment returns of around 25%, trouncing estimates of up to 7%. In other words, lawmakers haven’t made significant changes that will get us closer to a 1994 plan to have 90% funding by 2045, let alone COGFA’s suggestion of working toward 100% funding in 25 years or sooner.

Illinois could just pour money into the problem, but the $8.6 billion paid in fiscal 2021 accounted for 20% of the general fund, making it the second-largest line item behind K-12 education. Clearly investing in workforce, present and past, will always be a chief purpose of state coffers. But most government solutions for solving any problem involving spending more money, although Illinoisans already have a hefty tax and fee burden, so competition for resources is fierce.

The pension problem is so large it nearly goes without saying, as evidenced by time spent on the websites of people hoping to be elected governor.

Of four Republican candidates, only venture capitalist Jesse Sullivan references employee pensions on his issue page:

“A benefit earned is a promise made; we cannot violate our obligation to retired pensioners. That said, we cannot afford to dig a deeper hole – our state’s unfunded pension liability is preventing us from spending on other critical priorities. We must make common sense reforms to future benefits that give our state the freedom to spend on essential priorities like education and public safety. We must transition to a private sector style retirement plan as quickly as possible for new members.”

Incumbent Gov. JB Pritzker takes credit for “a public safety pension consolidation bill to save taxpayers billions that previous administrations failed to achieve for decades” and says he “reduced state pension liabilities with an employee pension buyout program.”

CNI notes Illinois initiated its buyout program in 2018, pre-Pritzker, but the General Assembly during his tenure extended it for three years, reducing the unfunded liability by $213 million in fiscal 2021.

Pensions aren’t Illinois’ only problem, but anyone seeking a Springfield office should offer detailed potential 12-figure solutions, with special attention to legislation lawmakers might actually approve.

Illinois must slay this dragon – and look beyond tax hikes to do so.

• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.

via Shaw Local

December 14, 2021 at 06:49AM

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