The need for pension changes remains urgent, according to a state budget watchdog.
The issue is off the boil now that the legislative session is over, but it must be resolved, with pensions’ share of state revenue having grown from 3 percent in 1995 to 22 percent now, says Laurence Msall, president of the Civic Federation.
“It’s projected that the state’s contributions for pensions will rise to almost 30 percent of the state budget. That is not sustainable, and is a grave concern not just to the Civic Federation, but the credit rating agencies, who have been threatening the state of Illinois with another downgrade, or perhaps a double downgrade, if they don’t stabilize the state budget,” he said.
In the coming fiscal year, the state will spend $5 billion on pensions, and another $1 billion on debt service for pension-related borrowing.
A key change, Msall says, would be to reduce the cost-of-living adjustment that pensioners receive, which is now 3 percent compounded annually. The governor has proposed making that a 3 percent simple adjustment, which would not start until several years into retirement.
(Posted 6-25-2012 at 6:54am, Illinois Radio Network)