Gov. J.B. Pritzker's administration Thursday rolled out its plan on how to deal with the most watched issue in state government, describing in detail how it will deal with more than $130 billion in pension debt. And though the proposed solution includes some new items, such as a possible sale or reuse of state assets like the Illinois Tollway, much of it will seem familiar to Illinois voters: borrowing money to shore up the state's pension funds and deferring scheduled payments to them farther into the future.
In a speech to the City Club of Chicago and a phone interview, Deputy Gov. Dan Hynes suggested the key to the plan is to extend the period of time the state has to reach full funding of its pension plays by seven years, to 2052. "Full funding" currently is defined has having 90% of the assets needed to pay promised benefits.
Mr. Hynes said the deferral will buy the state time to examine asset sales and other matters — and give Mr. Pritzker some leeway in dealing with a projected deficit of $3.2 billion in the new fiscal 2020 budget he's set to unveil Feb. 20. Specifically, extending the full-payment ramp to 2052 will reduce the amount the state has to contribute next year by about $800 million. The state "still will have to contribute $8 billion," Mr. Hynes noted. But by deferring the payment owed, the state will run up increased interest costs on debt it legally will have to pay, Mr. Hynes conceded, declining to give a cost figure.