Illinois’ pension debt is so catastrophically bad — and progress on a solution has been so slow — that the state’s Democratic governor is now putting the squeeze on opponents of his reform plan.
Gov. Pat Quinn announced Nov. 19 a low-budget Facebook and YouTube-based campaign featuring “Squeezy, the Pension Python,” in an effort to begin a public debate about the pension problem. The state has estimated it faces $95 billion in unfunded pension liabilities.
“Illinois has the worst-funded pension system in America,” Brook Anderson, the governor’s press spokeswoman, told The Daily Caller.
The governor is trying to persuade the state legislature to begin solving the problem by Nov. 27, in part, by cutting pensions’ cost-of-living increases, raising retirement ages and making local school districts fund teachers’ pensions with raised property taxes.
The new campaign follows an August report by the Illinois Policy Institute that said normal accounting procedures peg the state’s long-term pension debt at $632 billion.
The state has only $63 billion in the bank to pay its retired state employees. (RELATED: Why Republicans aren’t happy with proposed Illinois pension reforms)
“Because the pension plans are so underfunded, they would need to see average investment returns of nearly 19 percent per year to cover future payouts. … [But] over the last decade, the pension funds have earned average investment returns of only 4.5 to 6 percent per year,” according to the institute’s report.
Also, because the nation’s accounting firms are tightening reporting rules, the state’s pension funds “will see their combined unfunded liabilities grow to more than $200 billion,” or more than double the $96 billion shortfall described by Quinn.
Quinn’s new government-made video, available at thisismyIllinois.com, shows an actor describing the state’s “pension squeeze,” while a cartoon python constricts the state’s capitol, schools, a cop and a hospital.
“Sometimes the employer is a private company, but more often, nowadays, the employer is a government body,” says the narrator, who blames inadequate savings, Wall Street, bad investments, earlier retirements, and extended lifespans for the shortfall.
He doesn’t, however, blame Democratic politicians and unions for jacking up pension payments while short-funding the investment accounts.
The low-key, low-budget video has a few glitches. For example, it shows a 1950s-era Soviet-built A-2 aircraft crop-duster aircraft, but suggests it was an American World War I aircraft.