Illinois won't make its next pension payment; Comptroller Leslie Munger Wednesday announced she can't, because the state doesn't have the cash.
Illinois' government pensions are already the worst-funded in the nation. The massive liability grew thanks to the lawmakers shorting the funds. They used the money to pay other expenses instead. Now, Illinois is set do it again. This time, the payment will be delayed because Comptroller Munger says there isn't money in the bank to make it.
"The monthly pension payment of $560 million is the largest consistent expenditure that we have throughout the year, and it is one of the few areas where we have some flexibility, because it is not covered by a court order and the delay will not cause immediate hardship," she said at a Chicago press conference.
It's the state's fourth month without a budget; yet because of a series of more than a dozen court orders the state is still spending at last year's levels. That's leading to a deficit, because the tax rate fell in January -- meaning Illinois doesn't have as much money to spend as it did last year.
Munger, a Republican who was appointed comptroller by the governor, says retired teachers, state employees and university professors will still get their pension checks.
But she says that'll require Illinois to tap into its pension accounts. That could further exacerbate the impact on the funds; with less money in the funds to invest, the funds will earn less, and in turn increase their long-term unfunded liability.
Munger says the state may not be able to make its pension payment in December, either.
There are months the state takes in more revenue than others; Munger, who as comptroller is in charge writing the state's checks, says during those times, she'll try to catch up.
"We're working very hard to make these payments in the fiscal year," she said. "We're hoping that by viewing this only as a delay, and not a miss, still making it up in the fiscal year, that everything ... you know, we will still be on track."