CHICAGO – Illinois will make its scheduled $560 million December pension payment despite the ongoing state budget impasse.
"Revenues are higher in December due to increased sales tax receipts from holiday shopping and the quarterly income tax payments due," Rich Carter, spokesman for Illinois Comptroller Leslie Geissler Munger, said on Dec. 1.
When Munger announced in October that the state's cash balance was too precarious to make the November payment as scheduled, she warned that December's payment might also be pushed off to later in the fiscal year that ends June 30.
"Pension payments are a priority for Comptroller Munger, and she will be able to accrue enough cash to make the payment in December," Carter said.
In October, Munger warned that "the consequences of inaction are severe and they grow more dire" every day without a budget for the fiscal year that began July 1. The November payment will be made later in the fiscal year. The state is carrying more than $100 billion of unfunded obligations to its five pension funds and lengthy payment delays will only worsen the funds' condition.
Gov. Bruce Rauner, a Republican, and the General Assembly's Democratic majority remain mired in political gridlock over the budget and Rauner's policy initiatives and the state is now in the sixth month of its new fiscal year with no budget resolution in sight. Leaders met on Dec. 1 but made little progress.
A temporary income tax hike partially expired on Jan. 1 and the state is on course to bring a bill backlog of $8.5 billion into 2016. The state continues to pay some expenses due to court orders and consent decrees and some expenses like debt service are paid under continuing appropriations that don't require a budget to be in place.
Fitch Ratings and Moody's Investors Service downgraded the state from the A-minus level to the BBB-plus level soon after Munger's October announcement of the November payment delay. The state was already lowest rated in the nation. Standard & Poor's has its A-minus rating on CreditWatch with negative implications.
