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Illinois lawmakers are gearing up to start another spring session that will include more attempts to address an issue that has remained stubbornly elusive so far.
What can the state do to rein in the cost of public employee pensions and try to address the $129 billion debt faced by the five state-funded pension systems?
Martwick wants to pursue a bill designed to encourage people to give up the 3 percent raises and opt for the smaller annual raises that are awarded to people in the Tier 2 plan. That plan awards annual raises of 3 percent or half the rate of inflation, whichever is less.
Another idea that will at least get some discussion is a massive bond issue that would be applied to the state’s pension debt. The idea is the money could be borrowed at a lower interest rate than the state is essentially paying on its $129 billion pension debt.
Another option is to restructure the existing pension debt and take more time to pay it off. The plan would ease pressure on the annual payments the state has to make to the pension plans.
The idea has been promoted by the Center for Tax and Budget Accountability among others. CTBA executive director Ralph Martire said the plan would set a slightly lower target for the pension funds to be considered adequately funded, although still meeting acceptable standards. The problem is the date for reaching those targets is extended.
“You do have pressure created by editorial boards and others who say if you don’t follow the current (payment plan) and you get funded to a lesser amount, aren’t you kicking the can down the road,” Martire said. “No politician wants to be accused of kicking the can down the road. That attack has a lot of political value and it really makes elected officials nervous.”