SPRINGFIELD, Ill. (AP) - Illinois must pay an additional $291 million into the state pension system over the next fiscal year to cope with its $111 billion unfunded liability, according to a new legislative report.
The increase means the total amount the state will budget for payments next year will be $7.9 billion, when the new fiscal year begins July 1. But the report noted that the increase is a smaller hike than last year, when state pension contributions increased by $681 million.
The information came in a report released Thursday by the General Assembly’s Commission on Government Forecasting and Accountability. The figures cover five pension systems, including the Teachers’ Retirement System, which accounts for almost $62 billion of the unfunded liability.
Dan Long, the commission’s executive director, told the (Springfield) State Journal Register (https://bit.ly/1lT7vb6 ) said the nearly $8 billion that the state needs to budget for pension payments in fiscal 2017 is worrisome because it takes a huge chunk out of Illinois’ general fund budget, which is made up of income and sales taxes.
“The issue is the state contribution is about 24 percent of the general fund,” Long told the newspaper.
The pension liability has ballooned to its current amount after decades of underfunding.
The report comes as legislative leaders and Gov. Bruce Rauner have agreed to take another look at overhauling pensions. The Illinois Supreme Court rejected a previous plan that lawmakers said would save the state billions in contributions.
The leaders met earlier this week, as the state continues to operate without a budget for the fiscal year that began in July. The governor and top legislative officials have agreed to meet again next week.
Even without a budget, state pension payments need to be made.
Information from: The State Journal-Register, https://www.sj-r.com
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