Aug. 18 (Bloomberg) -- Illinois lawmakers failed to take action on a cost-cutting overhaul of the nation’s worst-funded pensions, ending a one-day session called by Democratic Governor Pat Quinn.
“We all look like idiots,” Representative Daniel Biss, an Evanston Democrat, said yesterday as the House failed to advance a bill that would have eliminated the Legislature’s own pension plan, one of five the state manages. “Not the governor, not the other side, not our side -- we all look like idiots.”
Unsustainable retirement expenses have mired Illinois in the same difficulties that helped push cities from Stockton, California, to Central Falls, Rhode Island, into bankruptcy. The Illinois pensions covering teachers, judges, university employees, legislators and state workers are 45 percent funded, according to data compiled by Bloomberg.
As hundreds of unionized public employees demonstrated against proposed changes outside the Capitol in Springfield, Democrats and Republicans inside couldn’t reach agreement on controlling costs in a system with at least $83 billion in unfunded liabilities.
Lawmakers have considered increasing employee contributions, passing some costs to local school districts, and forcing workers to choose between the current system and receiving free retirement health care. None won majority support.
“We need to stop the politics,” House Republican Leader Tom Cross of Oswego said during the debate. “We really are at a point where we may not have a pension system down the road.”
Politics is the problem, said Quinn, who blamed Republican leaders for the collapse of the session. The governor told reporters at a press briefing that he would begin a campaign to put public pressure on lawmakers to reform the pension system.
“They’ve got to be pressured by the public, by the taxpayers,” Quinn said. “The only way to get them to stand upright on this issue is for the people of Illinois, the people who pay the taxes, to lean on them.”
State contributions to the consolidated retirement system, with $63 billion in assets, are projected to reach $5.2 billion in fiscal 2013, up from $4.1 billion in the year that ended June 30, budget documents show.
Standard & Poor’s said in April it may cut Illinois’ rating from A+, the fifth-highest, if lawmakers don’t enact “structural budget solutions” and address “significant pension liabilities.”
California, at A-, is the only state whose credit is graded lower by the New York-based company. Moody’s Investors Service downgraded Illinois in January to A2, its lowest grade for a state.
Although Illinois lawmakers raised personal and corporate income taxes in 2011, the state carries a backlog of about $8 billion in unpaid bills, which doesn’t include pension obligations.
The special session adjourned several hours after the House expelled Democratic Representative Derrick Smith of Chicago, who was charged with bribery earlier this year. He was the first member removed in more than a century.
To contact the reporter on this story: Tim Jones in Springfield, Illinois at firstname.lastname@example.org
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