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Pritzker’s proposal to address worst underfunded state pensions in US dissected

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(The Center Square) – Gov. J.B. Pritzker’s plan to address Illinois’ pension woes was the subject of a House hearing Thursday.

Pritzker is proposing the state increase its statutory funding ratio goal for its pension funds to 100% by fiscal year 2048. The current goal was established by former Gov. Jim Edgar and the Illinois General Assembly in 1994, which created a 50-year plan to get the state to a 90% funding ratio by 2045.

The state, at a 44% funding ratio, is home to the country’s worst pension crisis.

During a House Personnel and Pensions Committee hearing, Alexis Sturm, director of the Governor’s Office of Management and Budget, noted the plan shows annual required contributions to the state’s pension funds are estimated to reach $18 billion by 2045 and afterwards “drop off drastically.”

State Rep. Steven Reick, R-Woodstock, asked Sturm if there will be any last-minute pension enhancements added to the proposal.

“The governor’s intent was to talk about this proposal in the context of pension funding,” said Strum.

“So you can’t answer today that there is not going to be some kind of pension sweetener language added to the budget at the last moment,” said Reick.

“I don’t believe so but the General Assembly passes the legislation, not the governor,” said Sturm.

“It always comes to us at 3 in the morning and we don’t have much to say about it,” said Reick.

Proposed Tier 2 pension enhancements in Illinois could come at a taxpayer cost of “billions,” according to one lawmaker.

“We passed through the pensions committee a couple bills that are going to put billions of dollars onto the taxpayer when property taxes are already out of control,” said state Rep. Blaine Wilhour, R-Beecher City.

Illinois has an unfunded pension liability of over $140 billion.