Governor of Worst-Funded US State Pension Remains Tightlipped on Signing Legislation

(December 6, 2010) — Illinois Gov. Pat Quinn won’t reveal if he will agree to sign new pension legislation that has Chicago officials upset, Bloomberg is reporting.

Lawmakers approved legislation that forces municipalities to pay more into pension funds over the next three decades in an effort to increase the funding level for pension schemes for local firefighters and police officers. Chicago officials worry that the new legislation will lead to increased costs and result in an up to 60% increase in property taxes. According to Bloomberg, Quinn said last week that he needs to analyze the bill, calling it an “important area of reform” imperative at the local level.

The state has the worst-funded pension system among US states, according to a recent report issued by the Pew Center on the States.

“Illinois is much like other states not keeping up with its annual payments to their fund,” Pew spokesman Stephen Fehr told aiCIO in November. “They’ve been increasing benefits to public employees without thinking how they are going to pay for them in the future,” he said. “It’s not just the recession that caused this problem — Illinois didn’t manage their pension bill in good times and bad, and its not a problem that will get better anytime soon,” noting that the pension deficit around the nation has led to severe underfunding in other state programs to make up for mismanagement.

“It took years for states to get into their current pension predicament, and it will take years for reforms and fiscal discipline to get them out,” the brief indicated. Pew said winners in state legislatures and governor mansions following this month’s elections “will take office having promised to improve how their states will handle these bills coming due.”

Other worst-funded states include Oklahoma, Kentucky, New Hampshire, and Louisiana.