Illinois out of cash for pension payment
Illinois won't make its next pension payment; Comptroller Leslie Munger today 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."
It's the state's fourth month without a budget; yet because of a series of 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, says retired teachers, state employees and university professors will still get their pension checks.
But she says that'll require Illinois tap into its pension accounts. That could further exacerbate the impact on the funds.