Illinois Claws At Mountain Of Unfunded Pension Liability
Illinois' pension-fund shortfall is by far the largest in the nation, and the clock is ticking for the state's governor and lawmakers to tackle the problem before a new Legislature is sworn in next week. So far, their proposals have stoked frustration from state employees and retirees.
Simply put, Illinois' unfunded pension liability is massive. Democratic Gov. Pat Quinn says the $96 billion of liability has been accumulating for decades, with the state's pension problems dating back at least 70 years.
"There have been 12 governors, 13 speakers of the House and 13 presidents of the Senate that have come and gone, and the issue has kind of confounded our predecessors," he says.
The State's Share
Over those many years, Illinois' teachers, state troopers, university professors and other state employees have been paying their share, contributing about 8 to 12 percent of their salaries out of every paycheck to their pension funds. But the state hasn't.
Illinois' governors and lawmakers have frequently shortchanged the pension systems. They've even skipped some pension payments altogether so they could more freely spend on things more popular with the voters, such as schools, highways, health care and prisons.
The result, says Quinn, is a huge pension shortfall that is growing bigger by the day.
"Our liability every day goes up by $17 million, so we've got to deal with this," the governor says.