If lawmakers fail to act on pension reforms, Illinois could find itself facing a bigger backlog of unpaid bills, according to a new report. The Civic Federation says Illinois’ unpaid bills could top $22 billion within five years if lawmakers don’t tackle public pension reform. That would mean trouble in terms of future borrowing.
Click here for summary
“If Illinois doesn’t do something dramatic to stabilize its finances, [the] rating agencies are saying Illinois could have further downgrades and could drop below investment grade, which would mean that the state would not only have a difficult time borrowing, it would be much more expensive and in fact if we continue down this road we could run out of the ability to access the credit markets, which be an enormous financial challenge for the state,” said Laurence Msall, president of the Civic Federation.
The outlook for the state is better than what the Civic Federation projected last year, when it was projected that the state would have $35 billion in unpaid bills within five years. That amount dropped thanks in part to Medicaid cuts signed into law last year.
As for the public pension fix, Msall says the group backs the Nekritz-Biss plan and says lawmakers touting S.B. 1 as the proper vehicle must still crunch the numbers to see how cost-saving the plan would be.