Rutherford: Tough Road Ahead For Quinn's Pension Plan
SPRINGFIELD, Ill. (CBS) -- Now that the governor has finally unveiled a plan to tackle the state's pension crisis, one top Republican is predicting a tough road ahead.
As WBBM Newsradio's Nancy Harty reports, lawmakers' inability to fix the pension system led to the state's lower credit rating and failure to act again could damage it further.
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State Treasurer Dan Rutherford says the governor's proposal to raise public workers' retirement age and personal contributions are steps in the right direction.
"This is going to be hard to do. This is not an easy task in the political environment we have here in the State of Illinois," Rutherford said. "But it is time."
The entire House and Senate are up for election this fall.
Meanwhile, Quinn says pension reform can and must be passed by the end of May.
He's spoken to House Speaker Mike Madigan once and plans to see him again Tuesday in Springfield, CBS 2 Chief Correspondent Jay Levine reports.
"He understands getting the votes is the most important thing," Quinn said.
Unless pension and Medicaid reform are passed by the end of the spring session, it'll take more than a simple majority, making it far less likely anything will pass.
Rutherford says the governor and lawmakers must exercise some tough love in order to rescue the state's "bleak fiscal condition".
He says the problem is so bad that the recent 66 percent income tax increase only covers the money needed for pensions and does nothing for the state's backlog of unpaid bills.
Quinn announced his proposal on Friday. He says it will secure public workers' retirement, while fixing years of fiscal mismanagement of the system, while saving the state $65 billion to $85 billion.
Under the new plan, employee contributions will rise 3 percent, cost-of-living adjustments will be modestly reduced, and increase the retirement age to 67 in a new rule to be phased in over the next several years. The plan will also limit public pensions to those who actually work in the public sector.
The program will also establish a 30-year "closed" actuarially-required contribution schedule to create a stricter system for funding.
Under the new plan, employee contributions will rise 3 percent, cost-of-living adjustments will be modestly reduced, and increase the retirement age to 67 in a new rule to be phased in over the next several years. The plan will also limit public pensions to those who actually work in the public sector.
The program will also establish a 30-year "closed" actuarially-required contribution schedule to create a stricter system for funding.
Currently, the state pension systems are underfunded by $83 billion.
Lawmakers have six weeks to debate the proposal before the scheduled end of the spring session.
Republican legislative leaders have already expressed support.
Public employee unions have called it irresponsible and insensitive.
