State treasurer warns of consequences for skirting pension reform

By WEEK Producer

June 16, 2012 Updated Jun 16, 2012 at 10:08 PM CDT

PEORIA, Ill. -- Illinois' treasurer says the temporary state income tax hike imposed last year might not remain temporary if lawmakers continue to pass the buck on pension reform.

Dan Rutherford was in East Peoria Saturday morning addressing the Illinois Association of Plumbing and Heating Contractors.

He said that while most of the income tax increase is set to expire in 2014, he fears it could be kept in place out of necessity. An option he opposes.

"The amount of the increase was just dollar for dollar the amount necessary to pay the increase in pension payments," explained Rutherford. "You can see right up front that if we don't address the state public pension system, and that continues to ramp itself up, there is nothing that we'll be able to do to resolve the problem by the time we get to 2014."

Rutherford says the state currently faces about $140-billion in unfunded pension and retiree health care liabilities.