Another state faces the reality of underfunded state pension plans and must take drastic actions to cut liabilities to those pension plans and associated benefit plans.
Illinois, a state with a reputation for political wheeling and dealing, backroom handshakes and 11th-hour bargains, is dragging its feet on the one deal needed to solve its biggest crisis in a generation.
Lawmakers will convene again the first week in January in hopes of fixing the nation’s worst case of underfunding of state employees’ pensions, a problem approaching $100 billion and mounting by $17 million per day. On the table are solutions that other states adopted as long as five years ago.
California and New York — states that, like Illinois, lean Democratic and have strong state-employee unions — already took unpopular, tough-love measures to pass pension reform.
Critics blame Illinois’ situation on procrastination, budgetary “gimmicks” and frequent raids on state-employee retirement funds to pay for other state expenses. Others blame an unwillingness to take on the unions, which help keep Democrats in power in President Obama’s home state.
But it’s a problem decades in the making, through nearly a dozen Republican and Democratic governors and through legislatures controlled by both parties, dating back to before Illinois changed its constitution in 1970 to prohibit reductions in state employee retirement plans.
“Nothing has changed in 40 years,” said Elaine Nekritz, a suburban Chicago Democrat and chairman of the House Pensions Committee, who called for an end to “excuses” when rolling out another proposal to solve the problem this month.