November 5, 2010
As explained in its recent analysis of the State of Illinois FY2011 proposed budget, the Civic Federation opposes the practice of supplying money to the State’s pension funds through borrowing. Pensions are an annual operating expense and the use of debt to fund them is not sustainable, adding to the State’s mounting debt service burden and increasing future pressures on the operating budget.
On Thursday the Civic Federation sent a letter to members of the Illinois General Assembly urging them to vote against Senate Bill 3514, which would allow the State of Illinois to borrow funds to make its FY2011 pension contribution. Please see the letter below:
November 4, 2010
Dear President Cullerton:
The Civic Federation urges you to vote against Senate Bill 3514, a bill that would authorize the State to borrow to make its FY2011 contribution to the five State retirement systems.
The Civic Federation opposes borrowing to pay for pensions because debt is not a sustainable funding source and adds to the State’s mounting debt service burden, increasing future pressures on the operating budget. We are also concerned that the structure of the bonds as proposed will “back-end-load” the repayment schedule, deferring even more costs farther into the future. The State must make room in its annual operating budget to pay its pension contributions.
Please vote against SB3514.
The Civic Federation