Proposed plan does not do enough to fix the real problems in Illinois
GLEN ALLEN, Va., Dec. 3, 2013 /PRNewswire-USNewswire/ -- Bob Williams, President of State Budget Solutions, a national organization dedicated to fiscal responsibility and pension reform, released the following statement regarding the proposed pension plan in Illinois.
"The phrase 'too little, too late' has applied to most pension reform ideas floated in Illinois for the past two years, and is an apt description of this latest effort to fix Illinois' pension problem. Illinois faces massive unfunded liabilities. The state only recognizes an unfunded liability of $100 billion. Using a fair market valuation, State Budget Solutions calculated the liability to be closer to $255 billion. Those numbers should spur lawmakers to take meaningful action, but they have not. This latest proposal is not the solution that Illinois retirees and citizens need," said Williams, a former Washington state legislator.
"Illinois lawmakers once again appear poised to take only baby steps. Increasing the retirement age, slowing cost of living increases, and shifting even a tiny portion of employees into a 401(k)-style plan are steps in the right direction, but they are insufficient to address the true extent of the problem in the Land of Lincoln. $20 billion in savings still leaves over $200 billion in unsolved problems," Williams explained.
He added, "Illinois lawmakers need to go all-in and commit to true reform by moving all employees to a defined contribution plan. Until the state legislature takes meaningful action, the pensions of active and retired Illinois government employees, along with funding for essential services of government, are at risk of drastic cuts to reduce the state's unfunded liability."
"Not only does inaction hurt employees and retirees, it impacts all Illinois citizens who still face an incredible unfunded liability that endangers communities, retirement security and the state's fiscal integrity. Illinois has the worst credit rating in the nation in large part due to its unfunded pension liabilities. That means the state pays more to borrow money. The money that goes to interest rates is money not going to schools and public safety, and that hurts all Illinoisans."
About State Budget Solutions
State Budget Solution is non-partisan, positive, pro-reform, proactive and anchored in fundamental-systemic solutions. The goal is to successfully engage political journalists/bloggers, state officials and opinion leaders in a new way of thinking about state government and budgets, fundamental reforms, transparency and accountability. Sharing studies and articles, data sets, anecdotes, and compelling narrative about what is happening in state and local budgets, State Budget Solutions presents and disseminates information about every aspect of coming fiscal and economic disasters and, more importantly, highlights fundamental reforms to avoid them.
Check out StateBudgetSolutions.org for more information.
SOURCE State Budget Solutions