Study says state lacks willpower to solve pension crisis
Because it has underfunded its state public employee pensions for
some 25 years, Illinois faces a pension fund crisis of historic
proportions, but a new study released by the Chicago-based Heartland
Institute shows that lawmakers have shown little stomach for a
showdown with public employee unions and other interest groups to
enact a plan that would provide a long-term solution.
At the end of fiscal 2004, Illinois' unfunded pension liability
stood at $35.1 billion, a greater amount than any other state. Total
liabilities stood at nearly $90 billion. Fund assets were just 60.9
percent of liabilities, second-worst in the nation. State funding of
public employee pensions has gone from about $635 million in 1996 to
an estimated $2.6 billion in fiscal 2006, and could reach $14
billion by 2045.
The study's author, Steve Stanek, managing editor of a national
monthly newspaper on state budget and tax issues, says the lack of
willpower by the state's elected officials is the biggest reason the
crisis exists. "Several fixes have been tried over the years," he
notes, "and the funding problem has grown worse as elected officials
failed to show sufficient willpower to avoid increasing benefits or
diverting funds to other budget priorities."
Independent study confirms merits of Medicaid managed care
An independent study released earlier this month strongly
supports a proposal by Senate Republican lawmakers that could save
Illinois millions of dollars each year and improve the quality of
care for patients by implementing a greater degree of managed care
principles in Medicaid.
The study by the Lewin Group, a leading independent health care
consultant, suggests managed care reforms could save taxpayers
approximately $1.5 billion in Medicaid costs over a five-year
Medicaid costs have escalated at an average rate of 8 percent
since fiscal 1999. Left unchecked, Medicaid will claim larger
allocations of the budget at the expense of other programs,
including education. The use of managed care reforms in the Medicaid
system will not only save millions each year, it will give patients
access to a better quality of health care.
The General Assembly created the Medicaid Managed Care Task Force
and commissioned an independent study after my Senate Republican
colleagues and I demanded that the issue of managed care be part of
last year's budget negotiations. The task force became a cornerstone
for my support of the final budget a year ago.