Editorial: When it comes to Illinois' pension liabilities, even good news is always qualified

The Pritzker administration once briefly flirted with the idea of a pension holiday, then thought better of it and since then, it has been justifiably proud of its record of making the full annual payment according to the schedule created during the Jim Edgar administration in the 1990s.

It is important, of course, that the governor keep that record intact. But we got more news last week of just how difficult a job that is - and how fraught with uncertainties it is.

The message came, ironically, as a sort of addendum to a piece of good news. Strong investment returns this year resulted in a 10% cut in the amount of unfunded pension liability the state faces. It was the first time the unfunded liability has decreased in four years.

But the amount is still eye-popping - $130 billion. And it still is accruing interest. Because of these factors, the state's Commission on Government Forecasting and Accountability recommends the state revisit the so-called Edgar Ramp, revising both the payments and its goals.

The goal established during the Edgar administration was to have state pensions 90% funded by 2045. The accountability commission urged that the target be moved to 100%, with funding completed within the next 25 years.

Achieving that aim, however, would be no small task. The pension burden on the budget is already substantial. Last year, the state paid $8.6 billion of its $42.9 billion budget into pensions. This fiscal year, which ends June 30, the payment will be in the neighborhood of $9.4 billion. Next year, it could reach $10.8 billion, but the commission noted that even that amount won't be enough according to actuarial tables to keep the unfunded liability from growing - without the occasional and unpredictable help of robust investment income such as that seen this year.

In order to truly get a handle on pensions, the commission said in a report quoted by the Associated Press, the state would need to put $14.9 billion into the fund.

The governor's office pointed out that finding an extra $5 billion or so for pensions would be "inadvisable," considering the state is still trying to eliminate a $4.8 billion backlog in unpaid bills. And of course that doesn't even begin to take into account other spending pressures.

Moving the pension target to 100% funding in 25 years sounds on its face like excellent fiscal policy. It solves the crisis and avoids costly increases in the unfunded liability. But it can't be achieved without serious revenue increases or severe spending cuts.

So, the bottom line is that even good news is qualified when it applies to the state's pension burden. The governor's office said the 90% goal of the present strategy is "reasonable and achievable." Well, a one-time investment windfall certainly helps, but that's hardly something we can hope for every year, and in any case hope is not a viable policy.

We are happy to see the unfunded liability trimmed by more than $14 billion. Who wouldn't be? But we'll be happier when our leaders demonstrate the kind of commitment - and trust - needed to actually solve the larger problem.