Illinois Gov. J.B. Pritzker said Wednesday the state plans to contribute an additional $100 million to the state's pension funds from proceeds resulting from Illinois' proposed graduated income tax, in a budget address for fiscal year 2021 before the state's General Assembly.
A referendum is scheduled in November for Illinois voters on a constitutional amendment to change the state's income tax to a graduated structure based on income from the current flat tax.
Mr. Pritzker said the $100 million figure should be doubled in subsequent years. The state's next fiscal year begins July 1.
"Next year would be the first year in state history that we will make a pension payment over and above what is required in statute. It begins to allow us to bend the cost curve and reduce our net pension liability faster," Mr. Pritzker said.
The state's total required contribution to its five pension funds in fiscal year 2021 is $9.7 billion, according to the funds' most recent actuarial valuations, published in January. How and when the state would disperse the additional $100 million among the five plans could not be immediately learned.
The state's five pension funds as of June 30 were underfunded by $137.3 billion, up $3.8 billion from the year before, according to the actuarial valuations.
Mr. Pritzker in his address dismissed calls for a constitutional amendment to cut benefits to reduce the state's unfunded liability.
"The fantasy of a constitutional amendment to cut retirees' benefits is just that: a fantasy," Mr. Pritzker said. "The idea that all of this can be fixed with a single silver bullet ignores the protracted legal battle that will ultimately run headlong into the contracts clause of the U.S. Constitution. You will spend years in that protracted legal battle, and when you're done, you will have simply kicked the can down the road, made another broken promise to taxpayers, and left them with higher tax bills."
Jordan Abudayyeh, Mr. Pritzker's spokeswoman, could not be immediately reached to provide further information.