 However, Brady cautioned that the governor's plans to shift the
costs for teacher pensions from the state to local school districts
outside Chicago, to community colleges and to public universities,
will threaten support for the reforms because of the inherent
property tax increase for homeowners and businesses to fund the new
responsibility for local taxing bodies."I do not support a
property tax increase as any part of an answer to the state's
pension funding problems," Brady said.
The 44th District senator does support adjusting the annual
cost-of-living increases, increasing employee contributions and
setting a 30-year schedule for bringing funding levels to 100
percent. Brady would also like to see enhanced funding language
added to ensure the state lives up to its commitments. He does not
support the governor's call to increase the retirement age.
"Pension reform should be about protecting these systems so they
will be viable and have sufficient funds to meet their commitments
and to pay the benefits promised to these workers under the Illinois
Constitution," Brady said. "We have a huge funding gap because
recent governors and Democrat leaders have not funded pensions at
sufficient levels."
Brady is a member of the bipartisan, bicameral pension working
group charged with developing a comprehensive solution.
"In January, the governor asked the four legislative caucuses to
work together to address the need to stabilize our state pension
systems. We have been meeting each week since then and looking at a
number of ideas," Brady said. "We have not completed our
discussions, so it is disconcerting that Gov. Quinn has suddenly
abandoned the bipartisan approach and rolled out his own plan. It
runs completely counter to his original goal."
Illinois' pension systems are the worst-funded of any state in
the nation, with money set aside now for only 43 percent of the
pension benefits already earned. This is the worst funding level of
any state. The national average is almost twice that -- 80 percent
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Illinois' total pension debt is $99 billion, which includes $83
billion in unfunded pension liabilities (owed for benefits already
earned) and $16 billion in pension bonds still unpaid.
Illinois' pension debt has almost tripled in the past decade --
from $35 billion in 2002 to $99 billion in 2012. In 2002, each
Illinois citizen owed almost $3,000 each for state pensions, and
today they owe over $8,000 each. Local pensions add to the debt.
The credit rating agencies cite Illinois' pension debt and its
bill backlog as the state's two worst problems. Illinois will get
downgraded again if pensions are not fixed soon.
Illinois' annual pension payments have risen dramatically in the
past 10 years, from $2 billion a year in 2002 to a projected $6.6
billion in the next budget year. Next year's payment is $1 billion
higher than this year's, a 16 percent hike. Payouts (benefit
payments) by the systems in fiscal 2013 are expected to be $8.6
billion.
Payments will continue to rise over the next 30 years, crowding
out other priorities. Pensions are now about 17 percent of Illinois'
general funds budget and will take up a bigger piece of the pie each
year unless reforms are enacted.
[Text from file sent on behalf
of
Sen.
Bill Brady by
Illinois Senate Republican staff] |
