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News & Politics News & Politics

Another state drowning in pension debt...Will the politicians in Illinois finally stand up to the unions?

Posted by on Feb. 6, 2013 at 8:31 PM
  • 5 Replies


CHICAGO (Reuters) - Illinois Governor Pat Quinn, already the most unpopular governor in the nation, has his work cut out for him at his annual "state of the state" speech on Wednesday - and this time he probably won't be relying on a python named "Squeezy."

The fiscal crisis caused by pension underfunding in Illinois is so bad that some hospitals wait a year to be paid by the state for insurance claims.

At the same time, teachers in Chicago's wealthy suburbs are retiring with six-figure salaries set by school districts on which pensions are calculated, and the state pays the bill. The benefits cannot be reduced, according to the state constitution.

Illinois' pension systems are in the worst financial shape of any state at 39 percent funded when no less than 80 percent is considered healthy. State pensions are in the hole by the staggering amount of nearly $97 billion, or $20,000 per Illinois household and nearly four times the annual state revenue.

It is this increasingly nightmarish financial mess that the Democratic governor has to address in his speech to the legislature in Springfield on Wednesday.

Quinn was widely lampooned in November when he held a press conference to unveil a cartoon python called "Squeezy" in an attempt to illustrate how pension costs are squeezing funding for education and other core services.

Despite the mockery, everybody agrees the problem is serious.

"This is a horribly embarrassing situation for the citizens of Illinois that their legislature said stabilizing pensions is a top priority yet nothing comprehensive has been done in over a year," said Laurence Msall, president of the Civic Federation, a non-partisan research group backed by Chicago business.

There might be some movement afoot. Majority Democrats, who have relied for decades on labor unions for political and financial support, are showing signs of a willingness to confront organized labor.

"To date, we have received no cooperation from the labor unions representing state employees on addressing these challenges," powerful state House Speaker Michael Madigan wrote in a January 30 letter to the head of a labor coalition.

The legislature will discuss this week proposed laws to boost worker contributions to pensions, raise retirement ages, eliminate the cost-of-living adjustment for retirees for several years, and end some abuses.

Michael Carrigan, president of the Illinois AFL-CIO, said in a statement that unions are willing to make a higher contribution toward the costs of their pensions to help solve the problem. "The public employees and retirees who serve the people need and depend on the modest pensions they earn and pay into from every check."

The financial pressures to act are growing. The pension funding gap has pushed the state's credit rating to the lowest of any state rated by major agencies. That raises the state's borrowing costs to such an extent that last week it had to postpone a bond sale to fund construction in the spring.

In Illinois, a balanced state budget is an illusion, only possible through a strategy of delaying payment of bills. The backlog was $9.3 billion at the end of fiscal 2012 and some 40 percent of this is for basic health care services such as payments to hospitals for care of poor people.


http://news.yahoo.com/illinois-governor-bear-grim-news-over-pension-crisis-204320138.html




by on Feb. 6, 2013 at 8:31 PM
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Replies (1-5):
Carpy
by Platinum Member on Feb. 6, 2013 at 9:26 PM
1 mom liked this

The next California?

happinessforyou
by Member on Feb. 7, 2013 at 1:13 PM

I think we can all agree that there is a financial crisis. However, the Union didn't run the entire State of Illinois off the tracks all by themselves. Instead of casting blame-come up with a solution.

paknari
by Silver Member on Feb. 7, 2013 at 1:22 PM
There are other problems that. We'd to be addressed here as well. Such as how does one live in a state that has such a high cost of living that people need to make six figured to live there unless it is a slum? My ain't loved there and if she didn't make over 100,000 a year and didnt also have her husbands salary it would be impossible. Easy way to fix the pensions would be to make it live able to receive less.
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jcrew6
by Jenney on Feb. 7, 2013 at 7:17 PM

Union Pension are perhaps the largest hemorrhage of cash in the IL state budget, as well as many other states. .  Don't you think it's time to reign it in?  


Quoting happinessforyou:

I think we can all agree that there is a financial crisis. However, the Union didn't run the entire State of Illinois off the tracks all by themselves. Instead of casting blame-come up with a solution.



GaleJ
by Member on Feb. 7, 2013 at 10:56 PM

Please don't try to blame "the unions" for this mess. The problem isn't anything the unions did it was the politicians who year after year refused to pay the state's share of the pension costs so they could spend money elsewhere. During that time the workers covered by the pension plan faithfully paid their fair share and since they are not covered by Social Security they were taking the promises made to them on faith. Now the state and the politicians are crying poor and saying they can't afford to pay what should have long ago been paid.

The best analogy is comparing it to a divorced couple. Just because one of the parents is delinquent and hasn't paid child support in a very long time and so can't afford the accumulated amount should not absolve the dead beat parent from having to pay. The child deserves the support that is theirs by law just as the workers deserve to receive the pension they were promised and to which they contributed. As an Illinois resident and taxpayer I think the entire Illinois General Assembly should be thrown into jail for malfeasance and their pay should be applied to the arrears until it is paid. They and all their predecessors didn't care enough about the promises they made and the workers and taxpayers of Illinois are, once again, left holding the bag...and it's a really BIG bag this time!

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