 For months, Illinois lawmakers have discussed borrowing as a way to
make the state's annual payment to its five public employee pension
systems. The Pew Center for the States recently reported that as of
2008, Illinois is one of the worst states at contributing to its
pension systems.The current proposal would allow state government
to sell up to $4.1 billion in bonds that would have to be paid off
with interest in eight years. The state would likely borrow less
money as a result of changes that Gov. Pat Quinn inked earlier this
year to pension benefits for new state employees.
State government has struggled in years past to meet its
scheduled yearly payment to the state's five public employee pension
systems. The borrowed money would allow state government to make
this year's contribution but would become "hard debt" that state
government would owe to lenders with interest.
A Senate committee heard discussion on the borrowing proposal,
but Senate President John Cullerton, D-Chicago, withdrew the
proposal before a committee vote.
State Sen. Dave Syverson, R-Rockford, said Illinois Senate
Democrats, most of whom support pension borrowing, are ignoring
their own campaign messages from this week's election.
"They obviously haven't learned from even their own campaigns, in
which they kept campaigning on fiscal responsibility, and the very
first measure after the election is to do record amounts of
borrowing and no possible means to pay that money back," he said.
State Sen. John Sullivan, D-Rushville, a supporter of the
borrowing plan, said borrowing would help avoid dipping into funds
that pay schools and state vendors.
"Our options are not like they're 'good' and 'bad.' It's 'bad'
and 'worse.' And so what we're trying to do is free up some money
that we can pay ... the businesses and entities that are doing
business with the state," he said.
State Sen. Larry Bomke, R-Springfield, said he opposes the
borrowing plan because it adds debt and does not provide a long-term
solution to the state's financial woes.
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He said that without borrowing, the state would have to free up
funds to make the pension obligation.
"You'd have to find the money. You'd have to cut programs to pay
the pensions. There's no statutory requirement that we pay any of
these programs. There is (a statutory requirement) that we pay the
pensions," he said.
In May, the Illinois House passed the proposal by just one vote.
Retiring state Reps. Bill Black, R-Danville, and Bob Biggins,
R-Elmhurst, joined Democrats in supporting the proposal.
Since then, Senate President John Cullerton has repeatedly said
his chamber lacks the votes to pass the proposal, despite the
extraordinary majority Democrats currently have in the Illinois
Senate.
State Sen. Mike Frerichs, D-Champaign, said Republican leadership
is hindering passage of the proposal.
"I think it's going to take Republicans who are serious about
fiscal discipline and putting money into our pension system. And
then we'll come together and find a way through revenue and cuts to
have a balanced budget. But right now, we need to make that payment
into the pension system," he said.
The Illinois Senate would need a three-fifths majority to pass
the borrowing proposal. If the Senate passed the proposal, it would
go to Quinn for consideration.
The pension borrowing plan under consideration is Senate Bill
3514.
[Illinois
Statehouse News; By KEVIN LEE]
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