17 percent of Illinois budget goes to meet pension obligations

While social service agencies reel under Illinois budget cuts and state suppliers, including medical providers for the poor, are getting stiffed by the state to the tune of billions of dollars, the money poured down the rat hole of state pensions continues unabatted.

A staggering 17.4 percent of Illinois general fund spending will go into pension-related payments, reports the Institute for Illinois’ Fiscal Sustainability at the Civic Federation.

This can't be emphasized enough:

While the State has decreased agency appropriations by $298 million or 1.2% since FY2008, these efforts were more than offset by an increase in pension contributions of $1.98 billion and increased debt service costs of $1.14 billion on pension obligation bonds over the same time period. Fully 17.4% of the General Funds budget of $33.6 billion in FY2012 will go to pension-related payments.

One might argue that the weight of the lush public employee pension benefits is falling heaviest on the indigent.

Said Laurence Msall, president of the Civic Federation:

“This budget plainly demonstrates the need for further pension reform by the State of Illinois,” said Msall. “Neither dramatic increases in revenue nor painful cuts to appropriations were enough to offset the increased costs imposed on the State by its underfunded pensions.” The Federation continues to urge the General Assembly and Governor to explore changes to pension benefits not yet earned by current employees as a way to reduce the cost of the pension program and set the State on a more fiscally sound path.

To read even more troubling news about the Illinois budget crisis, check out the group's full report here.





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  • Not to mention that it was reported that the whole 66% income tax increase went into this year's state pension contribution instead of paying down the backlog, as was represented when it passed, and it is the state Republicans who are taking credit for that allocation, as an alternative to the "annual pension borrowing." Thus, the provision that it will revert to 3.75% in 4 years is a demonstrable fraud.

    As far as it falling on the indigent, the Chicago Muckrakers are just starting to realize, two years in, that social service providers are not being paid on time, but the Rakers do not make any connection to the pension mess. The question I raised there (or thought I did) is how things are going to become better if Chicago becomes an economic doughnut hole, as they also seem to report without making the connection, but Cullerton insists that pensions to current employees, including the part not yet earned, remain inviolate. Apparently he thinks that state employees are U.S. Supreme Court justices, as that can be the only way to justify the claim that the Ill. Const. forbids any modification of benefits earned in the future by present employees. Msall is going to have to knock heads with him.

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