Jim Dey: Good 'rainy day' news drowns out looming storm

May 23—Illinois Comptroller Susana Mendoza recently released another of her "good news" press releases.

It was one of a string of favorable announcements by Mendoza, an ambitious pol who hopes they are making a favorable impression on the public.

The veteran Democrat disclosed she had transferred an additional $150 million to the state's "rainy day" fund.

The deposit, her office said, brings the new balance in the emergency account — also known as the Budget Stabilization Fund — to $1.73 billion.

That's a far cry from the meager $48,327.53 on deposit in August 2018.

"We've brought Illinois' finances to a much better place since I was sworn in six years ago, but more fiscal discipline is necessary to complete the process," said Mendoza, who has repeatedly urged spendthrift legislators to go slow on new spending.

Mendoza's announcement is, obviously, good fiscal news in a state that could use more of it.

So hallelujah, sing to Jesus, happy days are here again. Right? Well, not quite.

This is Illinois — the state where financial prudence goes to die. There's always a caveat.

Even as Mendoza applauded another step toward fiscal probity, Gov. J.B. Pritzker and his legislative supermajority are preparing to pass new budget that shortchanges the state's five public pension systems by $4.4 billion.

The state engages in this annual practice by making legally required minimum payments to pensions for teachers, state employees, university employees, judges and legislators rather than actuarially required payments.

According to the legislature's Commission on Government Forecasting & Accountability, the state's contribution will be $10.9 billion, not the $15.4 billion actuaries say is necessary to properly fund the pensions.

The reality, of course, is that the state can't afford to properly fund the pensions without wiping out other programs. The $10.9 billion payment already represents roughly 25 percent of the state's operating budget.

But every year's shortfall increases the size of underfunding, which state officials say is roughly $140 billion.

The American Legislative Exchange Council, which recently released a report on the national public-pension problem, contends it is really far higher — $533 billion.

This difference in numbers is usually explained by the conflicting rules governing how public and private pensions are funded.

The pension funds for teachers (44 percent funded), university employees (45 percent funded) and state employees (43 percent funded) receive the lion's share of pension contributions.

The teachers' pension will receive roughly $6 billion in state funds, as opposed to the $9.6 billion actuarial numbers require. The state employees' fund will receive $2.6 billion, not the $3 billion actuaries recommend, and the university employees will get $2.1 billion, not the $2.5 billion actuarial number.

Contributions for judicial (43 percent funded) and legislative (21 percent funded) pensions are much smaller.

The judges' fund will receive $147.8 million — $30 million less than actuaries recommend — while the legislators' fund will get $26.5 million — $8.3 million less than actuaries suggest.

The chronic underfunding of public pensions means that the state's overall debt grows ever larger.

That reality undermines the governor's frequent statements that he's passed balanced budgets.

He's making his disingenuous claim by contrasting estimated general-fund revenues with proposed spending, citing the difference as a surplus.

There's no question that, for a variety of reasons, Illinois' revenue picture has improved over the past four years, to the point that elected officials boast about their accomplishments. But too often ignored is the metastasizing public-pension cancer that belies their self-serving claims.