CHICAGO Nov 14 Illinois' public pension crisis
has grown so severe that it can no longer be fixed, a Chicago
business group warned on Wednesday.
The Civic Committee of the Commercial Club of Chicago
chastised political leaders for inaction on dealing with the
state's $83 billion unfunded pension liability, along with other
debts that have ballooned to nearly $200 billion. The group also
expressed disappointment in the results of last week's general
election, which gave Democrats a veto-proof majority in the
Illinois House and Senate.
"Instead, it appears we will soon have even more legislators
who aren't prepared or willing to make the tough decisions
necessary to save our state," the Civic Committee said in a memo
to its members, who include the heads of Hyatt Hotels Corp, the
Chicago Board Options Exchange, Motorola and Allstate.
The group, which launched an "Illinois is broke" campaign in
2010 to raise public awareness about the state's fiscal
condition, also sent a letter to Democratic Governor Pat Quinn
bemoaning a lack of political courage to deal with the state's
While Quinn has been pushing for pension reforms, attempts
to push bills through the state legislature have failed. The
absence of substantial reforms and a nagging structural budget
deficit have led to downgrades of Illinois' already low credit
ratings relative to other states.
A report released last month by a national State Budget
Crisis Task Force co-headed by former Federal Reserve Chairman
Paul Volcker concluded that Illinois' budget was no longer
The Civic Committee warned that future pension payments are
in jeopardy, and it called for meaningful reforms that include
an end to cost-of-living increases for pension recipients, a
salary cap for pension purposes, a higher retirement age, and a
phase-out of Illinois pension payments for non-state workers.
Currently, Illinois makes payments for all public school
teachers except those in Chicago and for universities and
colleges. Republicans lawmakers have objected to shifting
pension costs onto local school districts fearing the move would
lead to higher property taxes.
Quinn, who supported a cost shift, as well as a plan to
raise workers' pension contributions and retirement age, while
reducing cost-of-living adjustments, has faced the wrath of
public worker unions.