Munger: State must delay pension payments

[October 16, 2015]  By Mark Fitton | Illinois News Network
 
 SPRINGFIELD — Illinois is too cash-poor to make its November pension-systems payment of about $560 million, the state’s comptroller said Wednesday.

And, said Comptroller Leslie Geissler Munger, that may be the case again in December.

Pension checks will still go out, she said, but the state’s retirement systems will have to dip into the body of their already under-funded accounts.

The state may be able to catch up with its payments in the spring.

“While we are unable to make our state systems payment in November and possibly December, we’ll use every dollar available in the higher revenue months that we get this spring to catch up on our obligation and ensure our expected payments are fully made before the end of the fiscal year,” she said.

Resolving the Illinois budget impasse might not be a simple matter, but the state’s shortage of cash is not hard to grasp, the comptroller said.

Illinois is now halfway through its fourth month of fiscal year 2016 without a budget.
 

But by way of court orders, spending dictated in continuing appropriations and paying for primary and secondary education, Illinois is going through its money at roughly the same clip it did in fiscal year 2015, but with about $5 billion less in revenue.

Munger said she’s not happy about having to delay the pension system payments, but there’s only so much money to spread around after handling court-ordered payments and debt service.

“To be clear, this decision is choosing the the least of a number of bad options,” she said.

“Like a household that is drowning in debt, we use whatever funds we can to fend off the creditors for one more day,” she said.

Munger, R-Lincolnshire, called for the governor and leaders of the General Assembly to get together and work out a balanced budget.

Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said Democrats would be checking out Munger’s numbers.

The state does have cash coming in, he said, and Democrats will be looking at how Munger used her discretion to determine which payments are being made and when.

Brown said “the speaker’s position continues to be that the budget is the No. 1 issue in the state that needs to be addressed.”

The need for these decisions could have been avoided, Brown argued, had Gov. Bruce Rauner, R-Winnetka, worked with the Legislature.

Rauner spokeswoman Catherine Kelly responded, “The fiscal challenges facing the state are the direct result of the legislature’s decision to pass an out-of-balance budget that is more than $4 billion in the hole.”

“The governor has compromised repeatedly, and it is now time for Democrats who control the Legislature to either come to the table with the governor to pass reforms that grow the economy and produce a balanced budget or use their super-majority to pass a truly balanced budget on their own,” Kelly said in an email.

Rank-and-file lawmakers from both sides of the aisle expressed frustration with the lack of a budget and the resulting problems.

“I didn’t think we’d necessarily get there this soon, but I think the comptroller is doing what she can to look ahead and do whatever is possible to keep the state from an even worse position,” said Rep. Joe Sosnowski, R-Rockford.

“The entire situation is frustrating because of the [House] Democrats refusing to move off of their position and give the governor anything, and that’s seeping into the Senate, too,” Sosnowski said.

Rep. Mike Smiddy, D-Hillsdale, said Democrats are frustrated, too.

But Smiddy argued Republicans need to back away from the governor’s “inability to come off of his ‘Turnaround Agenda’ non-budgetary demands and sit down with us to work out a reasonable budget to get the state moving in the right direction again.”