Springfield, Ill. – With a state budget deficit in the multiple billions of dollars, Illinois taxpayers face an even more serious liability in the form of a massive $78 billion dollar unfunded pension debt, according to State Senator Kyle McCarter (R-Lebanon). Meanwhile, a nonpartisan research institute is the latest of many organizations to propose their own plan to fix Illinois’ pension problems.

The Illinois Policy Institute (IPP) recently released a plan that it contends would allow the state to make required annual payments to the state’s retirement fund, and eventually pay off all pension debt by Fiscal Year 2024. Senator McCarter explained the proposal relies on a state spending freeze that would begin immediately and continue for three years, at which point spending would be allowed to grow at the rate of inflation.  The plan’s authors say it could address the pension deficit without imposing a tax increase.

While Illinois’ overburdened—and underfunded—pension systems have been a source of concern for years, there also have been concerns raised about the Illinois Policy Institute’s plan. The proposal relies heavily on borrowing with little emphasis on benefit reforms, such as reducing benefits for new employees. It also makes reversing Illinois’ pension problems the number one priority, at the possible expense of other areas of state government, such as Corrections.

A number of other groups, both public and private, have also called for pension funding and budget reforms. Regardless of the specifics of any proposal, McCarter said one thing is certain:  “We cannot wait any longer to begin addressing these deficit problems, especially the pension debt which leaves future generations holding the bag for the mismanagement of the last seven years. Only three years ago, the state’s public employee pension debt was $45 billion.  It has jumped more than $30 billion in that short period of time because of the decision by former Governor Blagojevich and his legislative allies to abandon the pension financing plan adopted under Governor Edgar in 1995. If the legislative leadership had had the discipline to stick with the plan adopted under Edgar the state’s pension debt would be manageable today.”

McCarter says while questions remain about the IPP proposal, he applauds any effort to jump-start discussions and spark interest among lawmakers to control spending increases and address Illinois’ massive deficit without imposing a tax increase.