An additional $2.2 billion in budget cuts could be coming if Gov. Bruce Rauner’s pension proposal isn’t passed. That’s the amount of savings Rauner factored into his budget proposal for next year from a pension reform plan which hasn’t been introduced as legislation yet. If lawmakers don’t support the measure, Rauner says deeper reductions in state spending will be needed.
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“If that doesn’t get through, we’ll have to look at more cuts, which I wouldn’t want to have to do,” Rauner said. “We’ve got to have a balanced budget. We can’t keep spending money that we don’t have, we can’t keep borrowing or kicking the can down the road. We can’t also just refuse to pay into the pensions. We should fully fund our pensions.”
Unlike Rauner’s proposal, potential savings from the 2013 pension reform law have never been factored into the state budget. The future of that law hinges on a decision on its constitutionality by the Illinois Supreme Court.
Time wouldn’t appear to be on Rauner’s side. It took six months of negotiations – after years of debate – for the 2013 law to be drafted and then passed through the legislature. The General Assembly is scheduled to adjourn on May 31.
Rauner’s pension plan would preserve pension benefits already earned, while moving state workers to a less generous retirement system as of July 1 and offering a buyout option to employees switching to a 401(k)-style plan. Public sector unions have labeled the proposal illegal, and are promising to challenge it in court as they have with the 2013 law.