SPRINGFIELD - The Illinos Policy Institute unveiled a plan today to solve the state's budget and massive pension debt. According to the Institute, the 10-point plan solves Illinois’ pension crisis, balances the state budget, pays down the $9 billion backlog of bills and returns $7 billion to taxpayers by repealing the 2011 state income tax increase.
“This is the only proposal in Springfield that actually solves Illinois’ problems and positions the state for an economic comeback,” said John Tillman, CEO of the Illinois Policy Institute. “Our pension reform plan immediately reduces the unfunded liability by half and gives government workers the secure retirement they deserve. Our budget plan returns $7 billion to taxpayers by repealing the 2011 state income tax increase and forcing government to live within its means. Legislators interested in turning Illinois around should support these reforms.”
- Immediately reduces the unfunded liability by about half, or $46 billion
- Replaces the irresponsible repayment ramp with level payments
- Reduces the state’s annual pension contribution by more than $2 billion in the first year and eliminates the state’s unfunded liability by 2045
- Empowers workers to control their retirement savings going forward with 401(k)-style plans modeled after the existing State Universities Retirement System’s 401(a) plan
The Institute claims support from State Rep. Tom Morrison (R-Palatine), who has proposed House Bill 3303, which is based the Institute’s pension reform plan.
"Illinois' crushing pension debt stands in the way of the economic growth this state so desperately needs. Big problems call for bold solutions, and that is why I've introduced House Bill 3303," Morrison said. “The only way for Illinois to solve its perpetual pension crisis is for the state to modernize its retirement benefits. That means following the lead of the private sector and moving to a 401(k)-style system that empowers workers instead of politicians.”
The Institute’s plan also calls for a series of other reforms which, when combined with the pension proposal, would save Illinois more than $7.6 billion in fiscal year 2014. These reforms include:
- Stronger balanced budget requirement
- Stricter spending limit
- Retiree health insurance reform
- Education spending reform
- Grant transparency
State Rep. Jeanne Ives (R-Wheaton) has proposed HJRCA 20 – a constitutional amendment that would strengthen Illinois’ balanced budget requirement. Illinois has not had a balanced budget since 2001.
“In crafting this plan, we took into account taxpayers, the people who rely on government and government workers,” Tillman said. “During the last four years, Illinois has tried the solutions put forth by the governor and legislative leaders. Those ideas have not worked. They have failed Illinois. That’s why it’s time to try something new and different, and that’s Budget Solutions 2014.”