SPRINGFIELD – While most Illinois income taxpayers are already upset about the 32% tax hike that will show up in this week's paycheck, that's not all that taxpayers will be frustrated about in the budget that passed with the support of 15 Republicans and the governor's veto that was overridden with the help of 10 Republicans.
The 2017 Madigan budget that was so celebrated by state workers and Leftist organizations last week is paying less into pensions – and that will show up shortly, as the funding gap widens. All those state workers, teachers and law enforcement that are counting on generous pensions to provide relaxed golden years may be all the more disappointed when that reality sinks in, says Crain's Joe Cahill in Tuesday's "New budget threatens to deepen pension debt."
Because the budget will be paying less in this year, with a gradual incline up to where it should be, not enough in the pension funds will lower the rate of return, thus Illinois Democrats continue their complusive "kicking the can down the road":
… A lower assumed rate of return means the pensions need more money now to generate enough investment earnings to cover future pension payments. And that, in turn, means legislators must allocate more current funds to pension contributions, not less.
Less is what the pension funds will get under the new budget, which delays implementation of the more-realistic investment return assumptions. Rather than impose the new rates of return immediately, as they should, lawmakers are phasing them in over five years. This allows them to contribute less while claiming to meet pension funding obligations.
More HERE.
