2/28/2013
NEWS RELEASE
MEDIA CONTACT: Diana Rickert
Diana@IllinoisPolicy.org or (312) 607-4977
Backed by Rep. Tom Morrison, Institute pension plan would immediately reduce unfunded liability by half – saving more than any other pension proposal to date
SPRINGFIELD (Feb. 28, 2013) — Illinois lawmakers have been unable to fix Illinois’ budget and massive pension debt. Today, the Illinois Policy Institute released a plan to show them how.
The Institute’s 10-point plan solves Illinois’ pension crisis, balances the state budget, pays down the $9 billion backlog of bills and returns $7 billion to taxpayers by repealing the 2011 state income tax increase. These reforms are detailed in the Institute’s fifth, annual alternative state budget, dubbed “Budget Solutions 2014.” “This is the only proposal in Springfield that actually solves Illinois’ problems and positions the state for an economic comeback,” said John Tillman, CEO of the Illinois Policy Institute. “Our pension reform plan immediately reduces the unfunded liability by half and gives government workers the secure retirement they deserve. Our budget plan returns $7 billion to taxpayers by repealing the 2011 state income tax increase and forcing government to live within its means. Legislators interested in turning Illinois around should support these reforms.” The Illinois Policy Institute’s pension proposal: - Immediately reduces the unfunded liability by about half, or $46 billion
- Replaces the irresponsible repayment ramp with level payments
- Reduces the state’s annual pension contribution by more than $2 billion in the first year and eliminates the state’s unfunded liability by 2045
- Empowers workers to control their retirement savings going forward with 401(k)-style plans modeled after the existing State Universities Retirement System’s 401(a) plan
The Commission on Government Forecasting and Accountability recently calculated how much the Illinois Policy Institute’s plan would save if applied to the Teachers’ Retirement System. When applied to the three major pension systems, the Illinois Policy Institute’s plan would save more money than any other pension proposal under consideration. State Rep. Tom Morrison (R-Palatine) has proposed House Bill 3303, which is based the Institute’s pension reform plan. "Illinois' crushing pension debt stands in the way of the economic growth this state so desperately needs. Big problems call for bold solutions, and that is why I've introduced House Bill 3303," Morrison said. “The only way for Illinois to solve its perpetual pension crisis is for the state to modernize its retirement benefits. That means following the lead of the private sector and moving to a 401(k)-style system that empowers workers instead of politicians.” The Institute’s plan also calls for a series of other reforms which, when combined with the pension proposal, would save Illinois more than $7.6 billion in fiscal year 2014. These reforms include: - Stronger balanced budget requirement
- Stricter spending limit
- Retiree health insurance reform
- Education spending reform
- Grant transparency
State Rep. Jeanne Ives, R-Wheaton, has proposed HJRCA 20 – a constitutional amendment that would strengthen Illinois’ balanced budget requirement. Illinois has not had a balanced budget since 2001. Legislators have backed a number of other proposals from Budget Solutions 2014. “In crafting this plan, we took into account taxpayers, the people who rely on government and government workers,” Tillman said. “During the last four years, Illinois has tried the solutions put forth by the governor and legislative leaders. Those ideas have not worked. They have failed Illinois. That’s why it’s time to try something new and different, and that’s Budget Solutions 2014.” Budget Solutions 2014 is available for download at: illinoispolicy.org/budgetsolutions2014 ### For bookings or interviews: Diana Rickert, 312-607-4977
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