In the News

Chicago Tribune, May 21, 2008

Illinois Senate Democrats are looking hard at borrowing $16 billion, pumping the cash into the state employee pension systems and hoping the investments can beat the market---all as a way to ease budget pressures.

It's an idea that so far has worked after Gov. Rod Blagojevich took a chance on a $10 billion bond package in 2003. He caught the markets at a terrifically low rate of just over 5 percent and the pension systems took their portion of the proceeds and mostly invested wisely.

Several senators emerged from the Senate Democratic caucus Tuesday saying the latest pension bond idea will emerge in the budget plan they hope to roll out soon.

Sen. Jeff Schoenberg (D-Evanston) said such a move would likely ease pressure to make escalating pension payments that cost billions of dollars a year. The higher pension costs gobble up increases in state revenues lawmakers rather would spend elsewhere.

“If the markets respond as they did before, this pension bond proposal would ease a major budget long-term pressure and provide more dollars for education, health care and other key priorities,” Schoenberg said.

But Sen. Susan Garrett (D-Lake Forest) said she is skeptical about voting for a $16 billion pension bond and the newly proposed $31 billion construction plan when a state operating budget remains unsettled.

“We should know more,” she said.

Blagojevich proposed a $16 billion pension borrowing plan in his Feburary budget speech.