Illinois lawmakers approved a bill to address the state’s $US100 billion pension debt.
The state has the worst credit rating in the country according to S&P, and its pension crisis was having ripple effects throughout the state. Fitch cited it two weeks ago when it downgraded Chicago’s credit rating.
Officials hope the bill, which will among other things raise state workers’ retirement age on a sliding scale and introduce a 401(k) option, can save $US160 billion over 30 years and reduce annual pension payments by up to $US1.5 billion.
But some have cast the measure the bill as an inadequate stopgap. In a lengthy op-ed Friday, Citadel CEO Ken Griffin, a Republican, called it “a fiscal death sentence.”
“Here is where this story will inevitably end: Our state is going to be forced to break its promises to our government employees and retirees. They will receive less than they bargained for. Our state’s taxpayers will see the 67 per cent “temporary” tax increase converted into a permanent tax increase. And soon we will hear that even further tax increases are needed to meet our obligations. This is the price we are all going to pay for sending the wrong leaders to Springfield for too many years.”
Sen. William Delgado, a Democrat from Chicago, called the bill “morally wrong, morally corrupt,” according to the Sun-Times’ Dave McKinney, adding that the bill would, “punish retired teachers, the janitor, the woman who serves lunch to your child in school.”
House Speaker Michael Madigan, also a Democrat from Chicago, said current pension benefits were “too rich” and that there “must be change,” according to the Chicago Tribune’s Ray Long and Monique Garcia.
Governor Pat Quinn is expected to sign the bill in the next 24 hours.
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