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Illinois Mounting $96B Pension Deficit

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    Illinois Policy Center’s John Tillman on the state’s underfunded pensions.

  • Duration 3:50
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Heating up across the nation as ballooning costs continue to crash state budgets nowhere is this more acute than the state of Illinois.

How massive deficit reaching 96 billion dollars in state legislators -- -- a damn thing about it so.

Is there any hope for the new year John Tillman CEO of the Illinois policy center joins me now with the latest John thanks for being with us tonight.

How bad it -- Maryland -- I just how bad is it.

Worst in the country that 96 billion dollars -- use a normal discount rate that people in the private sector uses about 200 billion dollars.

Another 54 billion dollars in unfunded health care benefits for retirees and then nine billion dollars on top of all of that and unpaid bills.

That have already been taken on by vendors to the state of Illinois so it's a big problem took a 63 billion dollars in total worth.

In the nation and it's not it's not the biggest state not by a long shot it's not California for goodness sakes.

You know governor pat Quinn's office had this to say about what's gonna happen in the future they say that by 2016.

The state is on track to spend more on government pensions.

Then on education.

How can that be the case that's sounds crazy to me.

Yeah it's really amazing in fact we're the ones who put up that report pointed out that -- one cents out of every new dollar that the state is putting -- K through twelve education is not going to pensions.

And eighty cents out of every new dollar for rob higher education is not going to pensions and eventually that will crowd out.

All education spending on -- -- now for the pension payment it is outrageous and we have to reform the system we saw a lame duck session.

Is that there's no courage -- the Democrats now have super majorities in both chambers.

They want to fix that they have the power to do it.

But they're not doing anything.

Are you have -- -- us.

You have ideas but for the best things to do here starting with suspending cost of living increases presumably for state workers -- give us that -- -- -- that's thing.

-- is simply not -- actually very simple how to fix the problem in terms of the policy solution you have to freeze -- compound and our cost of living increases that would eliminate about half of the unfunded debt that's number one.

Number two you have to raise the retired age -- retirement age to 67 like we have in the private sector was Social Security.

That's number two number three you have to convert from defined benefit which is essentially a Ponzi scheme to defined contribution 85% of the private sector the taxpayers -- -- I have to do RR one K -- -- come up why exactly -- government workers have to do that.

Because government workers and that want the taxpayers and future taxpayer earnings to be at risk to fund pensions for them forever.

These -- millionaire pensions the average teacher after a thirty your career in Illinois.

Get 67000 dollars a year they're gonna get all over two point six million dollars over their lifetime while -- our pension yeah on the backs of working class unborn -- Taxpayers are paying for it.

It is reasonable -- that along with the legislature why can't I mean this isn't obvious problem that is only gonna cost the state more and more money going forward because.

The longer this exist the more expensive your debt is going to be so why won't they do any thing.

They won't do it because they're terrified of the public employee unions the largest political contributors in the state of Illinois are public employee unions ask me SE -- -- the teachers' unions.

And they give about 70% of their money to Democrats 30% to Republicans what is really bizarre here Jerry.

Is that the media and some other groups and politicians are blaming Republicans for this.

And the Democrats had a majority in the last session and now have a supermajority.

Republicans are saying don't do a fake reform -- a real reform and they should be applauded for during that especially representative Tom Morrison has been very courageous on us -- Unbelievable.

John come back any time let us know how this goes as an it's an amazing story and frankly it's playing out all over the country as Illinois -- possibly the rest of the country -- thanks for coming on.

Thanks --

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