State lawmakers should have enacted pension restructuring at the same time they raised the income tax, according to the state treasurer. Treasurer Dan Rutherford says the tax increase of two years ago gave the state breathing room on the pension issue, which is why pensions remain unresolved.
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“I did not support that tax increase in January of 2011, and it wasn’t necessarily because I didn’t believe we may not need more revenue, it was because if you agreed to that without fixing the problem, we’ll be two years later, and haven’t fixed the problem. Well guess what? We’re two years later and we’re still in the same problem.” Rutherford addressed the matter at a news conference Sunday in Chicago.
The pension problem is an unfunded liability of $95 billion, largely because the stare for decades failed to make its full employer contribution, if any contribution at all. Consequently, the state must commit billions more to pensions now than in past years, unless it can find a way to reduce future benefits. Those efforts have so far produced no resolution in Springfield.
Rutherford says a pension solution should have been negotiated as part of a tax increase package. The tax increase is hitting taxpayers now. They were shielded for two years by a temporary Social Security tax cut which has now expired.