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Thu March 27, 2014
Pension Savings Estimate Lowered — But Is It A Big Deal?
A new report (PDF) says Illinois' pension overhaul will save less money than advertised. Some politicians are trying to make hay out of that. But it might not be such a big deal.
The pension vote came with promises of big savings — $160 billion. Then, after it was already law, a new analysis of the bill said, well, maybe we'll save $145 billion.
This latest report puts savings even lower, at $137 billion.
Republican gubernatorial candidate Bruce Rauner is jumping all over that, as is state Rep. David McSweeney, from Barrington Hills.
"This bill is not going to save the pension system,” McSweeney says. “We need to get back to work and adopt real pension reform."
Except this latest report, from the legislature's bi-partisan budget forecasting arm, says it's "tenuous" to compare the new numbers to the original projection.
It says a big reason for the difference is great investment returns last year. Because of that, the pension hole we're climbing out of isn't quite as deep.
That's why others, like Repulican Sen. Matt Murphy from Palatine, are in the "no big deal" camp.
"The key takeaway is the overall savings is about a 40 percent reduction in taxpayer liability over 30 years," Murphy says.
Of course, for any of this to matter, the pension overhaul has to survive an ongoing court challenge.