When State Comptroller Leslie Munger announced earlier this week that the state could not afford to pay it’s share of public employee pension contributions, the folks at TRS were rightly quick to point out to members that this would not impact us receiving our monthly pension check.
Since the beginning of Governor Rauner’s holding hostage the state budget to advance his union-busting turnaround agenda, this has always been a fear.
Yet, simply saying that we get our checks doesn’t mean that we, along with thousands of other citizens of the state, are not being hurt by the hi-jacking of state government by the Governor’s political agenda.
Munger says state pensions won’t receive a state payment in November. There will probably be no state payment in December. She has previously said that it is possible that there may not be a payment for six months.
My friend John Dillon asked TRA Communications Director Dave Urbanek if the state has to pay an interest penalty for missed payments.
There will be no interest rate applied to the delayed state payment for November. State government appropriations to all agencies that are part of that government do not fall under the Illinois Late Payment Act.
And then there is the loss that nobody I know can calculate for me. How much are we losing by not having the money owed to us to invest?
The missing payment is nearly $600 million a month.
If the worst case scenario comes to pass and we are not paid until June, we are talking over
$6 billion. $3 billion*
Uninvested. Money lost that we will never get back.
Amanda Kass of the Center for Tax and Budget Accountability explained it to me this way:
“Delay in payments undoubtedly has an impact on investment returns–think of a personal savings account as an example, interest earned from $100 being in the account for 12 months is more than $100 being in the account for only 9 months. Quantifying the impact of the delayed payments in terms of investments (and in-turn future state payments) is quite difficult.”
So, how much?
*When I first posted I made a typo when I wrote $6 billion.