Are you sitting down? Illinois has good pension news.
Illinois' unfunded pension liability has slowed dramatically, according to new data.
Governor Pat Quinn announced last Saturday morning that latest forecast of the growth in the state's unfunded pension liability has fallen to $5 million a day from $17 million.
During the course of a full year, that amounts to a reduced liability of $4.32 billion. That's some serious swag, folks.
As late as last week at a legislative pension hearing, Quinn's budget director, Jerry Stermer, continued to cite the $17 million figure to lawmakers. And, then, two days later -- bam! -- Quinn announced a rosier forecast.
Quinn credits the slowing acceleration of Illinois' pension debt to Illinois making the full statutory payment to the pension systems every year and the enactment of a pension reform law in 2010, which created a "Tier 2" lower pension plan for new hires and not a boost from investments in a surging stock market.
"Improvement in the financial markets does not factor into the latest projection," says Quinn's press release.
And House Deputy Majority Leader Lou Lang (D-Skokie) agrees with the governor's assessment.
"The forecast that reveals Illinois pension debt growth is slowing demonstrates that the legislature's 2010 pension reform and regular pension payment policy are making a positive difference," said Lang. "By no means is the Illinois pension crisis solved, but it is beginning to heal and lawmakers deserve credit for that progress."
The impact of improved investment returns will be reflected when the five pension systems release data on the growth in their respective funds and their portfolio performance again in November.
The daily cost of the unfunded liability growth is calculated by taking the projected amount of the growth of the shortfall in a given fiscal year among the state's five pension systems, and dividing that number by 365.
Apparently the "do nothing" Illinois General Assembly may have done enough to help to turn the long-term tide of the state's underfunded pension systems which currently totals approximately $96 billion.
This will really make the heads at the Chicago Tribune editorial board and the GOP partisans at the Illinois Policy Institute explode.
Despite the good news, Quinn refused in his statement to embrace his administration's good news.
In fact, the governor glowered at the legislature in order to maintain the heat on lawmakers by continuing to cast them as the villains -- despite their role in appropriating the full pension payments and crafting the 2010 pension reform -- as they ponder a comprehensive compromise.
"The people of Illinois are continuing to pay a steep price of $5 million a day for legislative inertia on pension reform," Quinn said. "We must stop this bleeding. Legislators must work around the clock to put a bill on my desk that erases the pension debt for the greater good of the people of Illinois."
Quinn, who has produced no pension reform bill of his own and who has oscillated between various other proposals, also accused lawmakers in his press release of being responsible for higher borrowing costs.
"Additionally, the General Assembly's failure to send the governor a comprehensive pension reform bill has resulted in multiple downgrades of Illinois' credit rating, which hurts the state's economic recovery, and just this Wednesday cost taxpayers an extra $130 million to ensure work continues on critical capital construction projects. This year alone, the lack of action has cost taxpayers $180 million in additional costs over the life of the bonds," the press release intoned.
Nice way to make friends when you need them most.
The governor has set a deadline of Tuesday, July 9 for the General Assembly to act on a comprehensive pension reform bill.
In the meantime though, the Illinois General Assembly deserves some credit for a concrete improvement in an otherwise bleak pension picture because Quinn has zero intention of sharing even a crumb of credit with those who put the reforms in place.
Good job, lawmakers.