Illinois Budget That Saved It From Brink May Add to Pension Debt
- Budget allows for stepped up contributions to be phased in
- Retirement shortfall has left state at risk of cut to junk
Illinois Closer to Ending Record-Long Budget Impasse
Illinois’s biggest financial challenge, the $130 billion debt to its workers’ pension funds, may only get bigger thanks to the budget that pulled the government back from the brink.
That spending plan, pushed through by lawmakers eager to keep Illinois’s bond rating from being cut to junk, allows the state to sink deeper into the hole by giving it five years to phase in hundreds of millions of dollars in increased contributions to four of its five retirement plans. Those extra payments stem from the funds’ decisions to roll back forecasts for what they expect to make on their investments, which means Illinois will need to set aside more money to ensure it can cover pension checks due in the decades ahead.