Analysis: Pension cuts could save $2 billion next year
SPRINGFIELD -- Two suburban Democrats said Friday their plans to cut teachers' and state workers' pension benefits could save the state $2 billion next year and immediately cut its retirement debt by nearly $30 billion.
Since Democratic state Reps. Elaine Nekritz of Northbrook and Daniel Biss of Evanston released a new proposal this month to slash the state's escalating retirement costs, critics and supporters alike have been wondering how much money the plan would actually save.
Biss Friday released those details -- numbers that will help set up an eleventh hour debate over retirement benefits for teachers and state workers before a new class of lawmakers is set to be sworn in Jan. 9.
Though the analysis accounts for savings in the next fiscal year, those costs might not be realized immediately even if lawmakers approve a pension-cutting proposal in the coming weeks.
Unions would be almost certain to sue to block changes proposed by Biss and Nekritz, perhaps tying up the proposal in court indefinitely.
Still, without the changes, the state is set to have to pay more than $1 billion more toward workers' retirements next year than it did the year before, leaving lawmakers who want to spend more on things like schools and care for the disabled in a nearly impossible spot.
For perspective, it costs a little more than $1 billion to run the state's entire prison system, so saving $2 billion in pension payments in one year would free up lots of cash for lawmakers as the state continues to face as much as $9 billion in unpaid bills.
That's why lawmakers might try to charge forward in the coming weeks, and the analysis released Friday could be a guide.
In the analysis, Biss argues that the new plan "would achieve significant savings and make major strides toward stabilizing Illinois' finances, beginning immediately upon taking effect."