Pension borrowing a matter of survival

Monday, June 14, 2010

It's nearly mid-June, the date by which the state Senate president had hoped to return to Springfield to finish sticking a massive Band-Aid over Illinois' $13 billion deficit.
Now, Gov. Quinn is shooting for the end of the month.
We say make it today.
Senate President John Cullerton is a handful of votes short of what he needs to pass a plan to borrow $3.7 billion to make a required state pension payment, which already has passed in the House.
Everyone hates borrowing, which is why this plan is in jeopardy. At the start of this legislative session, we vehemently argued against borrowing money, pushing instead for deep budget cuts, a tax increase and other efficiency reforms.
But when it became clear our elected officials had neither the courage nor the smarts for that, we and others, including Quinn, moved into survival mode.
And that's exactly what a vote for pension borrowing achieves: survival.
The state is obliged to make this payment. And borrowing to do so -- at a cost of $1 billion in interest -- is far better than skipping the payment and risking the loss of at least $20 billion in investment income over the next 20 years.
One of the no votes, Sen. Heather Steans (D-Chicago), argues that pension borrowing takes pressure off legislators to work toward a real, sustainable solution to the state's fiscal woes.
We agree, though we think the Band-Aids the state has applied this year are so inadequate that they'll fall off whether a borrowing bill passes or not.
Pension borrowing won't dilute the need for a tax increase and spending cuts. It simply keeps Illinois alive -- barely -- until the next inevitable eruption of the festering wound that is our state budget.
Pass a pension borrowing bill today. Then quickly make the deep cuts and pass the tax increase Illinois cannot do without.