State Lawmakers Discuss Rauner's Power Over Pensions

Mar 10, 2016

Illinois lawmakers are considering whether to let Governor Bruce Rauner reduce or delay pension payments.

The measure would give the governor the power to make unilateral cuts and reallocate money around state government.

Rauner's budget director says the governor would rather get a bipartisan deal -- including pension changes -- instead of going it alone.

Senate President John Cullerton has a pension proposal Rauner supports. But Cullerton says his legislation is not a quick fix for the state's massive pension liability. 

Brian Mackey / Illinois Public Radio

It’s been 10 months since the Illinois Supreme Court struck down the state’s last attempt at a pension overhaul. Legislators have yet to decide what to do about Illinois’ worst-in-the-nation pension debt, but they are beginning to weigh their options.

One set of proposals would let employees collect their pension as a single payment when they retire.

Flickr user Pictures of Money / "Money" (CC BY 2.0)

The long-term pension debt in Illinois rose to $111 billion. That’s $6 billion higher than last year.

The state will have to contribute roughly $375 million more next year toward the retirement systems. That's money that could otherwise go to schools or government services.

Dan Long heads the state economic forecasting agency which produces the calculations. He says much of the burden stems from lawmakers' past decisions to skip paying the employers' share of pensions.

Teamsters for a Democratic Union

Thousands of retirees in the Midwest face a big cut in their incomes next year.

The pension fund for many retired members of the Teamsters Union proposed benefit cuts up to 60 percent. It says the fund will run of money in a decade without them.

Brian Mackey / Illinois Public Radio

The lack of an Illinois budget means public pension systems won't get their state contribution next month. That won't stop retirees from getting their checks.

However, there could still be an impact.

The funds get money from members, the state and in the case of the Teachers Retirement System, school districts.

Dave Urbanek is the TRS spokesman. He says another key is investment income. But some of those investments, like stocks and bonds, might have to be liquidated in order to send out future checks.