Nov. 28, 2006

State is Liable for $7 Billion in Pension Debt

Recently, a study issued by the Center for Tax and Budget Accountability discovered the state’s pension liability has grown to an astounding $7 billion from 2004.

              The debt made by the pension must be paid, according to the study, or it will start affecting other aspects of the state’s budget, including education and health care. The $ 7 billion debt is a result of failing to make full pension payments in the 2006 and 2007 fiscal years.

              Chrissy Mancini, director of Budget & Policy Analysis for CTBA, recently said “Illinois public pension liabilities are growing out of control, and the state’s failure to pay keeps making them worse.”

              The report concludes by saying because Illinois has the nation’s fewest employees per capita, the debt can only be resolved by adding revenue. In light of this issue, unions and statewide retiree organizations have joined with the CTBA to form the Illinois Retirement Security Initiative, a partnership ensuring public retirement benefits are financed properly.

              The debt is an ongoing problem that must be urgently addressed: “Illinois is at the brink”, commented Shawn Brown, who will be the head of the Illinois Retirement Security Initiative. “Either the state starts paying its pension bills or they swallow the rest of the budget.”

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