 The Illinois
General Assembly was able to pass a budget last week
but hit a snag over plans to pay the pension payment.The House
passed a plan to borrow the $4 billion needed to make the pension
payment for fiscal 2011, but the plan didn't come to a vote in the
Senate.
The Senate could return and pass the borrowing plan later this
year, but no schedule has been set.
The state could skip the payment this year, forcing the five
public employee pension systems to sell assets and lose out on money
earned from interest.
Lawmakers believe skipping the payments could cost the state $20
billion to $30 billion down the line.
As a third choice, lawmakers could make its full, $4 billion
contribution to the pension systems, but that would create
significant cash-flow problems for other parts of state government,
including schools and social service agencies.
State Sen. Toi Hutchinson, D-Olympia Fields, said the borrowing
plan was the preferred course of action.
"And with the pension borrowing, it's the least horrendous of
three horrendous options," Hutchinson said. "Who in the world wants
to borrow?"
State Sen. Dave Syverson, R-Rockford, said people in Springfield
need to realize borrowing doesn't solve the state's pension
problems.
"Borrowing money is not making payments," Syverson said. "And
somebody has to explain to them that borrowed money does not count.
We have to pay our pensions."
The pension payment is a major part of the state's annual budget
that lawmakers have struggled with in recent years.
Hutchinson said the state's inability to adequately fund the
pension systems is a major contributor to the state's budget
deficit.
"What we need to do to fix this state is going to be a
combination of cuts, borrowing and revenue," Hutchinson said. "I
don't see how you balance a budget on one side of the ledger. There
are people screaming for cuts and cuts and cuts. We've done cuts."
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But Syverson said Senate Democrats would let November's general
election take place before figuring out what to do with the pension
systems and budget.
"They're just delaying the action, putting it off until after the
election," Syverson said. "They'll try and come back with a massive
tax increase. The problem is the hole that they have dug, the tax
increase they're talking about, is not going to be big enough to
handle that."
It could be a different group of lawmakers who take up the issue
in January, depending on the outcome of this November's election.
Lawmakers realize these pension payment problems are likely to
become an issue during this year's election season.
Hutchinson said she hopes this doesn't give Republicans a leg up
in November, but she said she is more interested in making tough
choices than winning elections.
"I've been able to figure out what people want to go around and
make speeches about and what they want to win on," Hutchinson said.
"But what I'm really interested in is: What are people willing to
lose over?"
[Illinois
Statehouse News; By JENNIFER WESSNER and KEVIN LEE]
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