By Dea Meyer
Increasingly you have heard that Illinois is nearly bankrupt. For years, the state has been spending beyond its means and ignoring its unpaid bills and obligations. This has gone on for so long that the state now has created a massive build-up of state debt - $130 BILLION - due to the state's employee pension and retiree health care plans. This debt is crowding out programs such as education from early childhood through higher education, medical programs and funding for critical services such as roads and police.
We have taken notice. Over the last few years, we have been calling attention to the State's fiscal problems and the need for budget reform in the areas of state employee pension and health care benefits, program delivery improvement and targeted cost reductions at the state level. This was even before the worst recession in decades!
Unable to continue to avoid the problems, the General Assembly recently enacted pension reform for state employees. The resulting legislation doesn't go nearly far enough. It applies only to new employees - those not yet hired - and does not impact current state employees or legislators. They will continue to accrue the same pension benefits as before which are much more generous and costly than those available to most taxpayers.
The recent legislation also does not reduce our current debt. If you were to divide that $130 billion debt across the state, each household in Illinois would owe about $25,000 - enough to buy a new car or cover one year's worth of mortgage payments.
So, how do we dig ourselves out of a $130 billion dollar hole? One of the critical steps is to create new, affordable retirement plans for state workers that are in line with the benefits available to most taxpayers.
Just as many private sector employers have already done, Illinois must freeze state pension benefits for current workers while preserving what employees have earned to date (current retirees benefits would be unchanged), and offer less costly plans going forward for both current employees and future hires.
The state must also require state retirees to contribute a reasonable amount to the cost of their health care.
And it must commit to fund these plans properly to ensure the solvency of the state's retirement systems and our state in the future.
For far too long the state has overspent and ignored its growing debt and budget deficits. Today Illinois is on the brink of a financial implosion that will lead to a vicious cycle of tax increases and service cuts - and hurt every resident in the state. Illinois must be put back on the course toward stability and prosperity.
Putting a band-aid on a gaping wound might be better than no band-aid at all, but it does nothing to stop the bleeding. The General Assembly needs to stop the bleeding and pass real reform.
Let's start dealing with this problem today. Tell the people counting on your vote that enough is enough, you want real reform now. Visit www.IllinoisIsBroke.com to easily identify your state legislators/candidates and make your voice heard by calling, writing or emailing your elected officials or those that are running for state office.
To learn more about the issue, follow us here, on the State of Our State blog, for continued commentary from business executives, leaders of civic organizations, small business owners, parents and students unified by a common concern for the future of Illinois.
Together, we can save our state.
Dea Meyer is the Executive Vice President of the Civic Committee of the Commercial Club of Chicago.
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