Illinois' Budget Crisis Somehow Got Worse

Date: September 13, 2016 Last Edit: September 15, 2016

TRS vote means the state’s pension payment is now $420 million more expensive.

Illinois’ Budget Crisis Somehow Got Worse

Illinois has the worst-funded
pension system of any state ($111 billion in unfunded liabilities), Crain’s Chicago
reported, and now the situation has gotten
worse. Late last month, the board of the Teachers Retirement System voted to
lower the assumed rate of return—to 7 percent from 7.5 percent—on the fund’s
investments. TRS is the state’s largest public-pension fund, and the vote was
taken not long after TRS trustees received a briefing from actuaries, without
briefing Gov. Bruce Rauner or other legislative leaders.

This vote means that Illinois will
have to come up with an additional $420 million for its required pension
payment in the next fiscal year, despite the fact that the state is already
dealing with a pension crisis. And yet again, this means that taxpayers will be
left to pick up the tab or education and social services will face severe cuts.

 Following the
vote, Gov. Rauner’s spokesman, Lance Trover, issued a statement in response to
the TRS vote: “With less than two hours’ notice, Illinois taxpayers, including
our social service providers and small business owners, were just handed a bill
for nearly a half-billion dollars. While questions remain about the legality of
today’s action, it further underscores the need for real pension reform in
Illinois. The continual need to ask more and more from taxpayers proves yet
again the current pension system is fatally flawed and must be changed.”

Related Content: Small Business News | Economy | Illinois

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