Issues: State Pensions
The IIFS believes that the public pension systems of Illinois must be sustainably funded and well-managed. As part of the Federation, the IIFS builds upon the Federation’s national reputation for expertise in pension funding and reform. Read our analyses, opinions, and recommendations for the reform of the State of Illinois public pension system here.
Prior to the release of the Governor’s annual budget recommendation, the Institute for Illinois’ Fiscal Sustainability at the Civic Federation releases an analysis of the State of Illinois’ fiscal condition. The report reviews Governor Quinn’s three-year budget projection and proposes a comprehensive five-year plan for achieving long-term fiscal sustainability for the State of Illinois. The Civic Federation’s plan would fully pay down the State’s $5.4 billion backlog of unpaid bills while gradually reducing income tax rates by 20%, broadening the tax base to include federally taxable amounts of retirement income and building a reserve fund as protection against future economic downturns.
State of Illinois Enacted FY2014 Budget: A Review of the Operating and Capital Budgets for the Current Fiscal Year
This analysis of the State of Illinois’ Fiscal Year 2014 Enacted Budget finds that the budget may represent a high-water mark, with future years bringing sharp reductions in revenues and further consequences of the unresolved pension crisis. Although the State reduced the backlog of unpaid bills to $5.8 billion, that progress is threatened by legislative failure to prepare for extreme financial challenges on the immediate horizon.
The Civic Federation supports Governor Pat Quinn’s $62.4 billion FY2014 recommended operating budget for balancing revenues and expenditures without borrowing and making progress toward reducing the State’s backlog of unpaid bills. However, this budget proposal is only a stopgap that further demonstrates the urgent need for comprehensive pension reform.
The State’s pension costs, including debt payments on past borrowing for pensions, will consume nearly 25% of State-source General Funds revenues in FY2014. The Civic Federation continues to urge the General Assembly to enact reforms that will significantly reduce the State’s pension obligations.
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