Illinois Pension Crisis: What They're Saying About the Need for Reform

May 23, 2011

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THE ILLINOIS PENSION CRISIS:
What They’re Saying About the Need for Reform

 

Jeremy Gold, a pension expert and New York-based consulting actuary: “Illinois is a poster child for pension abuses … One of my colleagues calls this child abuse because our children must pay for our fiscal irresponsibility.” (Diane Rado and Duaa Eldeb, “Rules let educators cross state lines to get pensions along with salaries,” Chicago Tribune, 1/29/11)
Chicago Daily Herald editorial board: “The news this week wasn’t surprising, but it should be alarming. Illinois had the worst pension funding shortfall for state workers in the nation in fiscal 2009, a study by the Pew Center on the States showed. … The time for placing blame has past. State workers deserve a solution so they know they will have retirement security. Taxpayers deserve a solution that doesn’t require repeated tax hits like the one approved in January. We all have a vested interest in and obligation to fix this unsustainable system.” (Editorial, “Work for a sustainable, affordable pension fix,” Chicago Daily Herald, 4/28/11)


Jim Tobin, president, National Taxpayers United of Illinois:
“If pensions are not reformed, the system will collapse.” (Brad Brueggemann, “Anti-tax group leader says ‘outrageous’ public pensions are bankrupting Illinois,” Belleville News-Democrat, 4/15/11)


State Senator Sue Rezin, R-Morris:
“Those bills — those loans — are coming due very soon, so we’re kind of headed in the direction of financial disaster.” (Jo Ann Hustis, “Rezin: Illinois on track for $22 billion deficit in five years,” Morristown Daily Herald, 4/23/11)


Belleville News-Democrat
editorial board: “If the state had to fully fund its pensions as private companies are required by law to do, these pensions never would have been given. Now we’re seeing the folly of not paying through the years. The state’s unfunded pension liability is estimated at more than $79 billion. There’s probably nothing to be done about retirees already drawing these pensions, and state lawmakers recently reformed the pensions of new hires. But this list is a warning that lawmakers still must find a way to reform the pensions for current public workers. Otherwise these costs are going to bury the taxpayers of Illinois.” (Editorial, “Pension costs must be cut,” Belleville News-Democrat, 4/17/11)


Commercial Club President Eden Martin
: “The state is virtually bankrupt …” (Bob Secter, “State playing hot potato with pension burden,” Chicago Tribune, 5/5/11)


Chicago Sun-Times
editorial board: “Illinois had just 51 percent of the $126 billion it needed in 2008-2009 to pay promised pensions, according to the Pew Center on the States. This was the largest shortfall in the nation, as Illinois’ was in the previous year. Few dispute the main factor driving this shortfall: the state’s repeated and prolonged failure to contribute what it owes to its pension systems. Meanwhile, state employees and teachers have faithfully kicked in their share paycheck after paycheck. Nibbling at the edges won’t cut it. Two good places to start: Raising the amount employees contribute toward their pensions and/or raising the retirement age. Workers closest to retirement should be exempt. (Editorial, “Change pensions for current state workers,” Chicago Sun-Times, 4/28/11)


Susan Urahn, Managing Director at PEW Center on the States, said state pension problems would eventually crowd out other priorities.
Urahn: “This growing bill increasingly competes for dollars with other important priorities like education, human services and infrastructure …” (“Study: More states falling short on pension money” The Associated Press, 4/26/11)

Urahn: “Given the size of the problem and the challenges of reform, there are no quick fixes … But there is considerable momentum for change.” (“Study: More states falling short on pension money” The Associated Press, 4/26/11)


Charles N. Wheeler III, University of Illinois professor, said neglect of pension sector goes back 40 years.
Wheeler: “For governors and legislators, there were always more pressing needs they wanted to spend money on.”  (Bob Secter, “State playing hot potato with pension burden,” Chicago Tribune, 5/5/11)


Illinois Municipal Retirement Fund executive director Louis Kosiba says the state has neglected the state pension system.
Kosiba: “Local governments are more mindful of debts … There’s never been that kind of discipline at the state level.” (Bob Secter, “State playing hot potato with pension burden,” Chicago Tribune, 5/5/11)

 

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