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March 7, 2013

Gov: Pensions to blame for Illinois' worst budget

 

SPRINGFIELD (AP) — Years of inaction on Illinois' worst-in-the-nation public pension problem has produced what many had long predicted: a worst-ever budget.

At least that was Gov. Pat Quinn's take Wednesday, when he declared his latest spending plan "the most difficult budget Illinois has ever faced." It slashes money for schools, bringing districts to 2008 funding levels. Universities and local governments also would see a cut, as would other programs, though the full extent of the reductions wasn't yet clear.

The proposed cuts are just the latest round of bad news for a state that's grown accustomed to gloomy financial projections. Last year, Quinn closed 54 state facilities and reduced Medicaid funding by more than $1 billion. And Illinois still has a backlog of unpaid bills that's approaching $9 billion, despite an income tax hike passed in 2011.

Quinn put the blame directly on lawmakers, saying their failure to fix the state's $97 billion pension crisis meant the annual payment to the state's public employee retirement funds — about $7 billion next year — is crowding out spending in other areas. Republicans pointed the finger right back at the Chicago Democrat, with the party's Senate leader calling Quinn "woefully absent" from the debate.

Pension experts say there's plenty of blame to go around in a state that skipped or shorted its payments for decades and has blown several deadlines Quinn has set in recent months to get a deal on reform.

"It's heartbreaking, but at this point I don't know what they're going to do," said Alicia Munnell, a professor at Boston College's Carroll School of Management and director of the Center for Retirement Research at Boston College. "There comes a time when labor, legislators and everybody have to get together and say, 'We don't want our state to be destroyed.' And this is the time."

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