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State News

May 13, 2013

Watchdog group says state must address pensions

CHICAGO — — CHICAGO (AP) — Gov. Pat Quinn's proposed state budget is a baby step in the right direction, a watchdog group's analysis said Monday, but the governor may be overstating savings from a recent union contract negotiation and not putting enough toward roughly $9 billion unpaid bills.

All told, The Civic Federation said, it mostly illustrates how Illinois lawmakers must come up with a solution for a worst-in-the-nation pension crisis.

"It's the state treading water until it addresses comprehensive pension reform," said Civic Federation President Laurence Msall. "The governor's budget makes the best of a very horrible financial situation."

The Chicago-based nonpartisan research group is the latest to put pressure on state lawmakers, who are set to consider two pension overhauls and Quinn's budget before adjourning this month. According to its 105-page report, the Civic Federation is "gravely concerned" with Illinois' shaky finances and wants a long-term solution, particularly with the nearly $100 billion pension problem straining other spending.

For years, Illinois has either shorted or skipped payments to its five public retirement systems, leaving it far short of what's needed in the future. Over the years, the figure has grown, which the Federation says eats away money for essential services. For the 2014 fiscal year, Illinois' employer contribution to pensions of $6.8 billion will represent nearly one-fifth of Quinn's proposed $35.6 billion spending plan, which includes money for education and public safety.

After years of inaction and debate, lawmakers will consider two plans to address the pension crisis, including one from House Speaker Michael Madigan requiring public employees to pay more, reduce annual cost-of-living increases and increase the retirement age for some workers. Another plan, sponsored by Senate President John Cullerton, has support from some unions and gives workers and retirees a choice of benefit packages.

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