| SPRINGFIELD, Ill.
SPRINGFIELD, Ill. Feb 6 The state of Illinois
is at a "critical juncture," Democratic Governor Pat Quinn said
on Wednesday and he beseeched state lawmakers to rescue the
nation's most underfunded state pension system that threatens
the health of the state economy.
Illinois state pensions are in the red by a staggering
amount of nearly $97 billion, more than $20,000 for every
household in the state. The pension systems are only 39 percent
funded, according to a state report, when 80 percent is
"This is a choice about whether we will make the tough
decisions necessary to balance our budget by reforming our
public pension systems or whether we will let our jobs, our
safety and our schools be squeezed out by skyrocketing pension
costs," Quinn said in his "state of the state" speech to the
In addition to the pension crisis, the state also has
institutionalized late bill payments as a budget balancing tool,
ending fiscal 2012 on June 30 owing more than $9 billion to
vendors, healthcare and social service providers.
Credit rating agencies, which have collectively downgraded
Illinois a dozen times since 2008, have warned the state's
ratings could fall further if it fails to get its pensions and
structural budget deficit under control.
The legislature is considering proposals to increase the
contributions of government workers to pay for pensions,
increase retirement ages, delay cost of living increases in
benefits and gradually shift some of the cost of pensions to
local communities from the state.
But the proposals have met stiff resistance from labor
unions - major political and financial supporters of the
Democratic party, which has a stranglehold on power in Illinois.
A provision of the Illinois Constitution guarantees that
pension benefits to retired workers cannot be reduced. Unions
have threatened to challenge any pension reforms in court, which
could substantially delay putting cuts in place.
In his state-of-the-state address, the Democratic governor
also called for a boost in the state's minimum wage, currently
$8.25 per hour. His plan would lift the hourly wage over four
years to at least $10 dollars. The highest minimum pay currently
is in Washington State at $9.19, according to data from the
National Conference of State Legislatures.
Quinn is the most unpopular governor in the nation,
according to Democratic polling firm Public Policy Polling. Only
25 percent of Illinois voters surveyed in November had a
favorable opinion of him.
His attempts to get lawmakers focused on pension reform,
which included promoting a cartoon snake called "Squeezy" to
illustrate how pension costs are squeezing out other social
spending, have been widely criticized as ineffectual.