x
Breaking News
More () »

How Illinois pensions became a budget nightmare, and what could be done about it

At the heart of the Illinois’ budget impasse lies billions of dollars in unfunded pensions.

At the heart of the Illinois' budget impasse lies billions of dollars in unfunded pensions.

Those pensions have been constitutionally protected since the 1970s, and some say modifying the state constitution could be the solution to the problem.  Others say that's not likely to happen.

Pensions in Illinois are underfunded by $113 billion, leaving the state in a budget impasse and forcing services across the state to close.

promo281054696

"For decades, literally - 40, 50, 60 years - we had not exercised the discipline to make the necessary payments," said Representative Elaine Nekritz of Northbrook.

In 1970, a provision was created that made pension contracts enforceable by the constitution. The idea behind it was to force lawmakers to address the problem.

But it didn't work the way it was intended, prompting some to ask whether the state constitution should be modified.

Illinois is one of only seven states that constitutionally protect their pensions.

"It's very hard to fund a state government when almost 25 percent is being paid out in retirement benefits," said Representative Tom Morrison, of Palatine.

In 2013, the Supreme Court struck down a pension reform plan, calling it unconstitutional. The court ruling made it clear that current employees' benefits cannot be touched.

Representative Morrison says he has a plan that isn't illegal; it would work like a 401(k) plan.

Illinois legislature

Getting the state constitution changed would be tough, since a 3/5 majority is needed from the legislature.  Clearing that hurdle would then send the measure to a public vote.

"I think it's very unlikely, right now, (that) the legislature would pass this. The Democrats have super-majority in both houses right now, and they're considered to be sympathetic to public employees in the union," said Keith Boeckelman, a political science professor at Western Illinois University.

Unions argue a different story. 

"For us to have a pension clause in the constitution, to me, is just a fundamental right that all public employees should have," said Stew Adams with the Illinois Education Association.

Adams says changing the benefit for future teachers isn't the answer.

"Why would anyone consider becoming a teacher in Illinois, with the situation in which you have to work until you're age 67 to get a full pension? I mean, to me, that's just primitive," Adams said.

Others say the right step needs to be taken now, if Illinois wants to get back on its feet.

 

 

Before You Leave, Check This Out