January 27, 2012

Governor Wants to Tackle Pension Crisis

Governor Quinn, speaking to the media at UIC.

GOVERNOR PATRICK QUINN on Jan. 9 asked State legislative leaders to appoint representatives to the Governor’s Pension Working Group. Quinn asked for the appointments shortly after his office released a three-year budget forecast listing pension costs as possibly the State’s largest long-term obligation, rising by $1 billion in the upcoming year.

BEGINNING JULY 1, Illinois pension costs will be about $6.8 billion. A total of $5.3 billion is for pension payments, but an additional $1.5 billion is to pay off money borrowed to cover pension costs paid out in earlier years.

ONCE CONSTITUTED, the panel will have several options. It could propose big changes to the pension system, including reductions to the benefits of current University and other State employees. Or, the panel could move more moderately, going after any instances of waste and redundancy in the current pension systems.

THE GOVERNOR would like pension obligations examined this spring. He told legislative leaders that he would like the group to begin working “as soon as possible.”

QUINN ALSO wrote to the leaders that “Given the multiple challenges facing our public sector pension systems both now and in the coming decades it is critical that we work together this spring to craft appropriate measures to bring fiscal stability to these programs.”

LEGISLATIVE LEADERS may be reluctant to tackle the volatile pension issue in an election year, however. Quinn’s urgency stems from a recent downgrade in the State’s bond rating that made Illinois the state with the worst credit rating of all 50. The Governor cited pension reform as a way to attempt to reverse that credit rating downgrade.

JERRY STERMER, Quinn’s former Chief of Staff, will lead the group.

FOR MORE information, contact the Office of the Governor at (217) 782-0244.

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