On July 8, Gov. Rauner unveiled a new proposal to reform Illinois’ broken pension systems, which are consistently rated as the most financially insolvent (more than $100 billion short) of any state. At issue is the generous-but-underfunded pension system for state employees – the subject of a recent Illinois Supreme Court ruling – as well as pensions for local government employees, teachers, policemen, and firefighters throughout Illinois.
Rauner’s proposal includes an idea initially put forward by Senate President Cullerton, called “consideration,” that offers a financial incentive for workers who volunteer to move out of the state’s most expensive pension plan, with the goal of achieving much-needed long-term savings. The bill also includes targeted changes requested by the Democrat President of the Cook County Board, state assistance for teacher pensions in the financially-strapped city of Chicago, and the long-sought ability for local governments to declare bankruptcy in certain worst-case scenarios.
The need to reform these broken pension systems is an issue of widespread bipartisan concern, caused by years of short-term decisions and deferred pension payments. The issue has once again been forced to the surface by a Supreme Court ruling in May that nullified a $130 billion long-term bipartisan reform passed by the Legislature in 2013, as well as statewide fears that the rising cost of pensions will continue to eat into state and local budgets. Neither the Democrat-controlled House nor Senate have yet indicated a willingness to take up Rauner’s compromise legislation.