CHICAGO – The sponsors of a new proposal to fix Illinois' pension crisis say the plan would save the state $2 billion and reduce its unfunded liability by $30 billion next year— figures they hope will improve the plan's chances at the state capital.
More than 20 rank-and-file legislators pitched the plan earlier this month, saying they were frustrated by finger-pointing and a lack of progress and on an issue that could lead the state into "financial oblivion" if it isn't solved.
Illinois has the nation's most underfunded public employee pensions, with a shortfall of $95 billion.
The group of lawmakers was led by Democratic state Reps. Daniel Biss and Elaine Nekritz, but includes some Republicans.
Their proposal would reduce cost-of-living increases for employees and retirees and require workers to contribute more to retirement. It also would shift some costs for teacher pensions to local districts and require younger employees to work longer into their careers.
At the time the plan was presented, Gov. Pat Quinn and legislative leaders said they welcomed the contribution but were reserving judgment until they'd seen a full economic analysis.
Biss and Nekritz released those figures Friday. They said cutting benefits would reduce next year's required pension contribution from $6.7 billion to $4.8 billion — less than what the state had to pay this year. It also would cut the $95 billion pension liability to $67 billion in the first year, and ensure the plans are fully funded within 30 years, they said.
The analysis also found that a controversial part of the plan — the cost shift for teacher pensions to local districts — would cost districts less than lawmakers previously expected. Biss said he believes those numbers "create a lot of room for compromise" with legislators who have opposed the shift because they fear school districts will have to increase property taxes to pay for it.
He said bill sponsors also are working on an analysis of whether the proposal is constitutional, an early concern raised by Democratic Senate President John Cullerton and others.
Abdon Pallasch, a spokesman for Quinn, said the governor's office was still reviewing the analysis late Friday.
Quinn has said he wants lawmakers to approve comprehensive pension reform by Jan. 9, when a new group of legislators will take office.