How much money will the state save if it reduces pension benefits for state employees and retirees? Perhaps $45 billion over 30 years, according to a University of Illinois study, but none of that will materialize right away. State budget director Jerry Stermer says pension reductions will have to survive litigation.
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“We have to be very thoughtful knowing that almost for certain somebody’s going to sue. I mean, the lawsuit is probably already prepared, so when I work with the governor on the budget for Fiscal 14, we’re not gonna assume any savings,” he said. Stermer says the administration is sticking with the idea of raising the retirement age, making employees pay more and limiting cost-of-living adjustments, but he says he’d like to hear a Plan B if that doesn’t work out.
State workers have said they’ll pay more, in exchange for a guarantee that the state will make the employer contribution that is actuarially required, and they’ve suggested closing so-called corporate tax loopholes to raise revenue. The subject will be addressed by lawmakers later this year or early next year.