(WBBM NEWSRADIO) — The head of a budget watchdog group says Illinois lawmakers have some tough decisions ahead if they hope to eventually ease the state's pension problems.
To be sure, Ralph Martire believes Gov. JB Pritzker's budget does a lot of things right and is realistic in its approach. But, the Director of the Center for Tax and Budget Accountability says the state's pension debt remains a gargantuan problem, and he has bad news.
“Number one, the problem is about to get worse before it gets better, and there will have to be a solution. There's been a couple of different alternatives offered to solve this problem,” Martire said.
“One, the Pritzker administration has put in that would cost around $6.4-6.5 billion roughly, and it just barely gets us back within Social Security compliance and the safe harbor.”
And Martire says it will be costly to dig out of the fiscal hole.
“Now, if you believe in math, and we at the Center for Tax and Budget Accountability believe in math, what the state needs to do is re-amortize, that just means refinance, its pension debt to create a level payment plan rather than this backloaded payment plan. What that requires is for you to put more money in up front and then level out the dollars.”
“But as is so often the case, math can come up against politics, so we'll see how the governor and the legislature navigate that.”
Some in and out of government have suggested that Illinois expand the sales tax base to cover services and not just goods. It's been discussed before without significant action. But, Martire thinks this time may be different.
“I think it's gonna get its nose into the discussion, and I think that for two reasons. Number one: there's a lot of interest in it in some key members of the Black Caucus, and the Black Caucus is pretty influential. And number two, there aren't a lot of options out there.”
The Civic Federation has suggested broadening the base, but lowering the tax rate overall. Martire says that's a bad idea.
“I mean, because you lose that on your current base, you end up not raising any money, and the state's sales tax base rate isn't high. It's one of the low to middling ones in the entire country.”
The idea, he says, is to raise more revenue.
Budget expert Ralph Matire is the guest on our AT ISSUE program this weekend, and you can hear at 9:30 p.m. Sunday.
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