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Quinn's budget address calls for fix to pension problems

Published: Wednesday, March 6, 2013 2:05 p.m. CDT • Updated: Wednesday, March 6, 2013 2:14 p.m. CDT
(Seth Perlman STF)
In this Feb. 6, 2013 photo, Illinois Gov. Pat Quinn delivers his State of the State address to a joint session of the General Assembly at the Illinois State Capitol in Springfield. Quinn is preparing to deliver his latest budget proposal on Wednesday, March 6 in Springfield. (AP Photo/Seth Perlman)

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SPRINGFIELD – Gov. Pat Quinn proposed severe spending restrictions Wednesday in what he called the "most difficult budget ever," telling a joint session of the General Assembly that the state is virtually paralyzed until it fixes its public-employee pension crisis.

With a calm but scolding tone, the Democrat facing re-election in 20 months used tough language to describe the pension hole that will suck nearly $7 billion of the state's general revenue in the coming year. He challenged lawmakers to send him a legislative fix and answered critics by laying out specific provisions he wants to be part of the solution.

"This is the most difficult budget Illinois has ever faced, and it is only a preview of the pain that is to come if this General Assembly does not act decisively on comprehensive pension reform," Quinn said in a 30-minute speech that focused almost entirely on the pension mess.

But his speech barely addressed the "pain" that Quinn aides hinted at the previous evening, not even mentioning, for example, the $400 million cut in public education necessary in large part because of the state's required contribution to employee retirement accounts. After years of state underfunding, the five systems have a whopping $96.7 billion deficit in the amount necessary to pay benefits to everyone they cover.

He proposed closing tax "loopholes" to produce money to pay down the state's gaping backlog of $9 billion it owes to vendors.

Lawmakers heard the call. Senate President John Cullerton, D-Chicago, said he plans a committee hearing next week on his combination legislation. It would offer employees a choice on whether they want retirement health care or annual cost-of-living increases, combined with a House-authored backup plan that would reduce post-career benefits and increase employee contributions.

"He's frustrated, and he wants us to do something, so we're going to start next week," Cullerton said after the speech, while noting the ongoing struggles that have prevented progress thus far.

The state's contribution will represent nearly one-fifth of the $35.6 billion general revenue — money spent for state operations such as education and public safety — expected to come in during the budget year that begins July 1.

"For those with higher pensions, the cost of living adjustment should be suspended until the entire pension system achieves better balance," Quinn said, without elaborating, but then added, "The basic pension amount that has already been accrued by our current and former employees should not be touched."

He left open the possibility of supporting an expanded gambling law, proposals for which he's vetoed twice in the past year, saying new money from any approved gambling measure should go to schools.

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