CHICAGO — The blame for Illinois’ $105 billion unfunded pension liability mostly falls on state lawmakers, according to a panel of experts.
The panel at the City Club of Chicago was inspired by an in-depth look at the history of Illinois’ pension problems by reporter Dave McKinney published in Crain’s Chicago Business.
Eric Madiar, former chief counsel to Senate President John Cullerton and now a Springfield-based lobbyist, says the problem was caused by legislators and governors not making the required contributions to pensions, not because of increases in pay or benefits to state workers.
“Between 1985 and 2014, pension unfunded liabilities grew by $97 billion,” Madiar said. “Benefit increases only accounted for 8 percent, or $8 billion, of that growth.”
In contrast, shorting contributions accounts for almost half of the rise in the unfunded liability.
Madiar says the state has long avoided properly funding pensions in order to avoid tax increases and cuts to services, with warnings about the unfunded liability dating back to 1917.
As for a solution, he says new revenue has to be a major component, though he feels some changes to state workers’ benefits would be allowed, provided they’re negotiated inside of imposed unilaterally by the legislature.