Pat Quinn's budget director says "skyrocketing pension costs" have led, in part, to the state's financial crisis. A better phrase might be "skyrocketing pension debt," and it's not like no one saw this coming.
The signs of Illinois' financial situation are literally everywhere. Schools owed money by the state -- lots of money. State employees in Springfield calling for increased taxes so they won't lose their jobs, but that's Illinois' short-term problem.
These same state workers and Illinois teachers have a long-term and possibly more serious problem, their pensions.
For decades, state employees and teachers have been promised yearly payments when they retire, payments of $1,900 - $3,100 a month. Problem is, the state has been shorting the pension funds for years. The shortfall: $85 billion.
State Sen. Dale Risinger, R-Peoria, says, "Republicans didn't always put money into the pension fund, but i tell you Edgar and Ryan, when they didn't put into the pension system, at least they paid down debt. Then we went to a point where we were not paying into the pension system so to pay operations for the government."
In fact, the Pew Trust for the states, examining the nation's pension crisis, puts Illinois at the very bottom when it comes to funding state worker pensions.
According to Susan Urhan, Managing Director of the Pew Center on the States, "If states continue to ignore the annual bills for retirees year after year, that cost will increase, and more taxpayer dollars will go to pay those obligations when the result could be higher taxes or cuts in other critical state services."
In 2009, the state borrowed $3.5 billion to make its pension payments. It will have to repay those and possibly borrow more to make additional payments.
"What we need to be in Illinois now is to be brutally honest," says state Senator Dan Rutherford, R-Chenoa. "We cannot afford the type of pension system we have in the state today, and we must fix it. The idea the Governor will once again woefully under-fund the pension system is wrong and exacerbates the problem for generations down the road."
In the time it takes to read this article, Illinois' debt increased by nearly $14,000.
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