A reform package passed late last year will make improvements to Illinois’ woefully underfunded public pension system, but the state’s budget gap still will increase to $13 billion by 2025 if current policies remain in place, according to an independent analysis released on Tuesday.
While the pension reforms are expected to save Illinois $160 billion over 30 years, they will reduce the state’s structural budget deficit only by $1 billion to $1.5 billion a year over the next decade, according to the report by the Institute of Government and Public Affairs at the University of Illinois’ Fiscal Futures Project.
That would leave the state with a projected budget gap of $3 billion in 2015, growing over the next 10 years to $13 billion. The projected shortfall is just $1 billion less than the $14 billion deficit the report projects Illinois would face without pension reform.
“The pension revision law of December 2013 was a huge step in the direction of fiscal stability for Illinois,” the report said. “Unfortunately, the state’s fiscal problems are so great that much still remains to be done.”
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