Treasurer points to pensions as state's biggest financial problem
Monday, March 26, 2012
The biggest problem Illinois faces financially is the unfunded liability of state pension systems, one state official maintains.
This was one of the issues Illinois State Treasurer Dan Rutherford addressed at a Jacksonville Rotary Club meeting Friday afternoon.
Rutherford was one of the first Central Illinois conservative Republican officials elected in years. He maintains a composure seemingly down-to-earth, posting a picture of himself with Mayor Andy Ezard shortly after the meeting. He speaks openly about the problems at hand, offering solutions based on his business background.
He shared the story about how the day after he was elected to “the most bankrupt state in America,” a 67 percent income tax increase went into effect as Gov. Pat Quinn raised the income tax from three percent to five percent.
In business, Rutherford learned that “I don’t know what I don’t know until I’m at the negotiating table,” he said. “You don’t agree to just one piece of a contract without the whole contract in front of you.”
The income tax increase did nothing to assuage the state’s debt, as it covered on the increase in the pension system.
“Every state employee deserves a fair pension, but not more than that,” Rutherford said.
He proposes a choice system in which anybody keeping the current pension system pays a higher premium.
“Illinois is a wonderful state with tremendous assets,” Rutherford said, “but we’re roaming down a track that’s going to go off a cliff. This Springfield session, we must address the unfunded liability of the pension system.”
Rutherford also touched on important community issues such as the closing of the Jacksonville Developmental Center. He attended the Commission on Government Forecasting and Accountability and doesn’t believe it is appropriate to close the facility because of the clientele and also because of the economic ramifications, as there is no plan in place, he said.
“I think it is abundantly important for government to look at its assets, as a business would, and determine the best deployment of those assets for a return,” said Rutherford, who believes the facilities should remain open but evaluated to maximize efficiency.
Rotary provides a variety of programs, including updates from public officials, President Lori Hartz said.
“We’re very happy that he accepted our invitation,” Hartz said. “I think he’s in a tough spot representing the state, but he did a great job letting us know the direction he thinks we need to go.”