Jobs Homes Autos For Sale










Group makes pitch for Illinois pension reform
By Robert Sanchez | Daily Herald Staff
print story
email story
Published: 8/24/2010 12:01 AM

Send To:

E-mail:
To:

From:

Name:
E-mail:

Comments:

Illinois is facing financial ruin unless something is done to address its estimated $130 billion debt related to pension and retiree health care costs, according to a coalition of organizations and residents seeking reform.

Members of the Illinois is Broke campaign told the crowd gathered for Monday's Naperville Area Chamber of Commerce luncheon that in order to pull the state out of its financial tailspin, lawmakers must balance the budget and make reasonable cuts. But they also must reform the pension and retiree health care plans for Illinois' public employees, members said.

"If we don't deal with the problem that's at the core of the problem, which is the retirement system, there is no way to fix it," said R. Eden Martin, president of the Civic Committee of The Commercial Club of Chicago.

Miles White, chairman of the Civic Committee, said the group created a task force in 2006 to evaluate the state's financial health and budgetary practices. The task force found the state was spending $3 for every $2 it takes in. It also was borrowing cash to cover operating expenses.

"Most importantly, we found massive retiree-related debts and no reasonable plan to fund them or address them," White said.

The task force issued a report that stated Illinois was heading toward "financial unviability."

Since that time, a continuation of the same fiscal policies and the economic downtown has only made the situation worse.

"The core of the problem is that pensions and retiree health care have not been funded appropriately for decades and are not sustainable in their current form," White said.

Lawmakers overhauled public sector pension plans earlier this year. The changes included raising the retirement age for future state, school, university and local government employees to 67.

But the reforms don't apply to existing employees and police officers and firefighters. As a result, Illinois' unfunded liability hasn't been reduced, Martin said.

If pension reforms were applied to existing state employees, the state's debt could be reduced by roughly $25 billion, according to Martin. The state could save billions more if it revised the retiree health care plans.

Doing nothing will mean less money for various programs and services in the short term. In the long term, the state is headed toward a point where its budget "will simply implode," Martin said.

White said the Illinois is Broke campaign is hoping to prevent that from happening. "Our goal is to work together with all the major players involved to arrive at a constructive and mutually beneficial solution," he said.