Delaying a pension payment is the short-term solution offered by the Illinois Comptroller to make sure the state meets other obligations next month.
Retirees will still receive their benefit checks, but a scheduled $560 million payment to the state retirement systems in November will be skipped. Comptroller Leslie Munger says it's a necessary move due to the budget impasse forcing state spending to outpace revenue, and her plan is to make up for the skipped payment before the end of the fiscal year.
"The monthly pension payment of $560 million is the largest consistent expenditure that we have throughout the year," Munger said, "and it's one of the few areas where we have some flexibility because it's not covered by a court order and the delay will not cause immediate hardship."
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It's possible the state will have skip another payment in December, according to Munger.
Her office clarifies that making the payments on a monthly basis isn't required by law, as past comptrollers have sometimes made those payments on different schedules based on when more tax revenue comes in throughout the fiscal year.
By making up for the skipped payments in the higher revenue months in the spring, the delay won't add to the unfunded pension liability, but rather to the state's backlog of unpaid bills. Higher tax revenues in the spring typically go to paying those bills, but this time, funds will have to be dedicated to pensions.
Munger hopes the need for this move motivates Democratic legislative leaders and Gov. Bruce Rauner to reach a budget agreement, though she personally remains supportive of Rauner's so-called "turnaround agenda."
"I've joked about offering to get a meeting together and bring sandwiches and chocolate chip cookies and say, 'Come on, let's sit down. Get a budget in place,'" Munger said. "They just have to sit down and do it, and I think there's going to be give and take on both sides."