Why Rauner fears teacher pension board vote
The board that oversees the Teachers Retirement System is scheduled to vote on whether to lower the expected rate of return on investments, a move Republican Gov. Bruce Rauner’s office has warned could blow a massive hole into the state’s already shaky finances.
The board will convene in Springfield on Friday morning to consider the change. When the board last altered the assumption from 8 percent to 7.5 percent in 2014, the state ended up on the hook for an additional $200 million in pension payments.
It’s an added cost state government can ill afford after going more than a year without a full budget. The Rauner administration suggests it could lead to deeper cuts and the need for even higher taxes down the road.
“If the board were to approve a lower assumed rate of return, taxpayers will be automatically and immediately on the hook for potentially hundreds of millions of dollars in higher taxes or reduced services,” Michael Mahoney, the governor’s senior adviser for revenue and pensions, wrote in a memo to Rauner’s chief of staff earlier this week.
Read more: http://www.chicagotribune.com/news/local/politics/ct-bruce-rauner-teacher-pension-vote-20160825-story.html