Quinn aide outlines dire budget options

'There's really no plan B. We can't not reform the pensions,' he says

  • Gov. Pat Quinn and lawmakers could try to cut teachers' and state workers' pensions in the coming months.

      Gov. Pat Quinn and lawmakers could try to cut teachers' and state workers' pensions in the coming months. Gilbert R. Boucher | Staff Photographer

Updated 10/24/2012 8:20 AM

SPRINGFIELD -- Illinois faces such steep financial problems that people could "let your imagination run wild with what we'd have to do" if state unions don't make some concessions when negotiating a new contract, a top budget aide to Gov. Pat Quinn said Tuesday.

Abdon Pallasch, Quinn's assistant budget director, told the Daily Herald editorial board the administration wasn't making threats about cutting services and closing state facilities. But between rising retirement costs for both teachers and state workers, the state is in a tough spot, he said.


"The alternative is we, you know, close a few prisons or universities, I guess," Pallasch said.

"I'm not threatening to close prisons or universities," he said. "I'm just saying, let your imagination run wild with what we'd have to do" if the state granted union members raises as Pallasch said was routine under former Gov. Rod Blagojevich's administration.

Quinn has tried to close prisons this year, but that effort has been stymied so far by union lawsuits. Blagojevich tried to close prisons, too, but failed.

Lawmakers are poised to talk about pension cuts in the months following the Nov. 6 election, but the issue has been debated for months -- even years -- without Democrats and Republicans able to compromise.

After the election, more than two dozen lawmakers won't have to face voters again because of retirements, perhaps making them more willing to vote for controversial pension changes. Newly elected lawmakers will take office in January, at which point all legislation starts from scratch.

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Asked if getting pension cuts approved before then is a do-or-die scenario, Pallasch said "yes."

"There's really no plan B. We can't not reform the pensions," he said.

"If we do, what do we do? Double or triple the state income tax?" Pallasch said. "There's all sorts of untenable choices."

Pallasch said the governor does not support raising income taxes further but emphasized the state's budget situation is dire. The state's income tax hike from 2011 is set to expire in 2015.

The state's largest employees' union shot back, saying Quinn should focus on tax breaks for companies and not workers' pensions.

"Similarly, while Gov. Quinn is handing out huge tax breaks and preserving loopholes for profitable corporations, he's threatening public employees -- most of who aren't eligible for Social Security -- with the loss of the $32,000 average pension they worked for, paid into and rely on in retirement," said American Federation of State County and Municipal Employees spokesman Anders Lindall.

Pallasch said Quinn's plans to wage a grass-roots campaign to get voters on board with pension cuts will start after the election and before lawmakers are set to return to Springfield at the end of November.

The pensions issue has come up in dozens of races for the General Assembly, but it's unclear how familiar voters are with the dense policy questions of public employee retirement funds.

"After the election, this will begin in earnest," Pallasch said.

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