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Nonprofits Urge State Lawmakers to Pass Crucial Pension Reform


Nonprofits urge state lawmakers to pass crucial pension reform
Civic Federation, Metropolitan Planning Council, Better Government Assn., Chicago Urban League Seek Immediate Action

CHICAGO—A group of civic organizations dedicated to improving government and making it more responsive to the public is calling on the Illinois General Assembly to take immediate action toward solving the State’s massive public pension crisis. The Civic Federation, Metropolitan Planning Council, Better Government Association and the Chicago Urban League are supporting this effort and welcome the backing of other nonprofit organizations.

The group is rallying around the recently introduced House Bill 6258, a bipartisan measure that focuses on reducing the main drivers of pension costs while also being sensitive to lower-paid employees and those close to retirement. The group contends HB 6258 offers a viable framework for comprehensive pension reform.
“We strongly urge the General Assembly to take up this bill now. Illinois lawmakers owe it to state employees, retirees and taxpayers to embrace this opportunity for reform and start securing a stronger financial future for our State,” said Laurence Msall, president of the Civic Federation.
House Bill 6258 was recently introduced by State Representative Elaine Nekritz, (D-Northbrook), and its chief co-sponsors are State Representatives Daniel Biss, (D-Evanston); David Harris, (R-Mt. Prospect); and Chris Nybo, (R-Lombard).
The proposed legislation would address the State’s pension funding crisis by:

  • Reducing the State’s unfunded pension liability by an estimated $28 billion, or 29%, from $95 billion to $67 billion;
  • Reducing the State’s required General Funds pension contributions in FY2014 by approximately $1.8 billion, or 29%, from $6.2 billion under the current funding plan to $4.4 billion. (This does not include $1.6 billion of required debt service payments on pension bonds.);
  • Achieving 100% funding by 2043 and would create a legally enforceable right to compel the State and other employers to make required contributions.
Additionally, the legislation gradually shifts the normal cost of pension benefits to employers, giving school districts, community colleges and universities time to build these new costs into their budget plans. The reforms would also allow local and State contributions to be enforced through the court system.
(Other major features of the bill are included in the open letter to lawmakers. Click here to download the letter.)
The pension funding crisis continues to jeopardize the State’s financial stability. Illinois already has elevated borrowing costs and the lowest credit rating of any state from Moody’s Investors Service. Due to the State’s pension funding pressures, Moody’s warned two weeks ago that the rating could be further downgraded.
“Getting Illinois on sound financial footing is critically important not only to run state government day-to-day, but also for a strong economy that attracts businesses and supports healthy communities,” said MarySue Barrett, president of the Metropolitan Planning Council. “Without a long-term solution to the State’s pension funding crisis, we cannot make future plans for essential services or address capital needs for transportation, housing, and other infrastructure. Illinois’ economic future is dependent on our leaders forging a workable solution — not a workaround — to the pension funding crisis.”
Andy Shaw, president and CEO of the BGA, stressed the need to address the issue immediately, “Nothing tops pension reform because we can’t have good government if pension costs keep gobbling up more and more state budget dollars that now pay for education, health care, social services, public safety and economic development,” says Shaw.
The Illinois General Assembly’s lame duck session started on January 2 and is scheduled to last until January 9, when newly elected members are sworn in.
The Civic Federation is an independent, non-partisan government research organization that promotes efficient delivery of public services and sustainable tax policies in the Chicago region and State of Illinois. For more information, please visit the Federation’s website at