Unfunded pension liability increases to $113 billion;Lawmakers differ on fix to pension shortfall; and more from INN Radio
Unfunded pension liability increases to $113 billion
Taxpayers are now on the hook for nearly $113 billion dollars in unfunded liability for the state’s five pension funds and lawmakers on a House pension committee say it’s beyond time to act.
The most recent Auditor General report of the state’s various pension funds highlights a $1.7 billion increased unfunded liability over the past year. Democratic Representative Mike Zalewski says legislators should have put a new reform measure on the books when the state Supreme Court last spring found a previous reform measure unconstitutional.
“We have varying opinions on the best new versions of what pension reform should look like. That’s what has us bogged down. But absolutely, there needs to be a sense of urgency on curing the state’s pension crisis.”
Republican Representative Tom Morrison says not addressing the issue sends the wrong message to prospective businesses and residents.
“We’re signaling that we’re not serious about fixing our problems over the long term.”
Lawmakers differ on fix to pension shortfall
As for a possible fix, the two legislators differ on what approach to take.
Zalewski says there are a lot of ideas out there. “The problem with pensions is we have too many people throw things out and try to get it to stick to the wall and then it falls down, ” says Zalewski.
Zalewski would like to see a dedicated revenue stream solely for pensions and thinks lawmakers need to extend the payment arc.
Morrison says that would just kick the can further down the road. Morrison suggests moving the General Assembly Retirement System to a defined contribution model to make other pension reform proposals more palatable.
“Would that solve our massive unfunded liability? No, of course it wouldn’t and it would drive that key signal that we’re serious about the problem.”
Other ideas Morrison floated include developing a defined contribution plan for new employees and getting a constitutional amendment to address the pension crisis moving forward.
The Auditor General’s report indicates the market value funded ratio for all five funds combined went from 42.9 percent in 2014 down to 41.9 percent in 2015.
Gov. Rauner: Not all criminal justice reform proposals require legislation
Many of the recommendations in a report spurred on by Illinois’ governor to reform the state’s criminal justice system can be implemented by the executive without lawmakers getting involved.
Governor Bruce Rauner says the report from the Commission on Criminal Justice and Sentencing Reform released at the end of last year is meaningful and some of the recommendations can be accomplished without lawmakers passing legislation.
“The good news is many of your recommendations our administration can begin to implement in the Department of Corrections. We don’t need necessarily to pass new laws to do this.”
Rauner says reforms that may require legislation should be supported on a bipartisan basis.
Some criminal justice reform proposals may be controversial
Meanwhile there may be some controversial proposals in the report, but the governor says the state must take them head on.
“We’ve got to talk about it and not be afraid to talk about it.”
Some of the recommendations include giving judges discretion to sentence probation for residential burglary, class 2 felonies and drug law violations, removing barriers keeping those convicted of crimes from obtaining professional licenses, and prevent the use of prison for felons with short lengths of stay, among other suggestions. Rauner says the state has to be honest about the issues spanning from racial disparities in the criminal justice system to drug laws and sentencing provisions.
Governor wants higher ed spending reforms before freeing up MAP grants
Before freeing up taxpayer-funded grants for low income college students the governor’s office wants to find cost savings for taxpayers at public universities.
During a news conference Wednesday several Democratic State Senators pushed for a measure to release $168 million for Monetary Award Program grants schools credited for the fall semester. But the governor’s office says appropriating hundreds of millions of dollars for MAP or general higher education without finding offsets could trigger a cash flow crisis. Democratic Senator Pat McGuire says the governor has already shown his support for K-12 education and freeing up MAP grants would take that a step further.
“This bill gives the governor an opportunity to show his support for post secondary education.”
However McGuire says his proposal does not include any offsets to cover the costs.
Sen. Cunningham: Higher education reforms are coming
A memo from the governor’s office highlights 200 percent increases in tuition between 2004 to 2010, high executive and administrative compensation and benefits, the use of private jets, and golden parachutes for faculty forced to resign as areas that need to be reformed before giving the universities the MAP grant dollars. Democratic State Senator Bill Cunningham says there are plans to bring about reforms, but proposed reforms won’t free up enough.
“As important as it is, it’s not going to generate the kind of money we are talking about that is needed right now to support our students on going to college and keeping them enrolled.”
Supporters of releasing the money say low income students shouldn’t be pushed aside while the legislature finds reforms. The governor’s office says giving the grant money or other funds without reforms would lead to a cash flow crisis.