Illinois has reached a settlement with the federal Securities and Exchange Commission, which accused the state of misleading investors about the depth of its pension problems. IPR’s Amanda Vinicky reports:
"Time after time," a top SEC administrator's quoted as saying, "Illinois failed to inform its bond investors about the risk to its financial condition posed by the structural underfunding of its pension system." He's talking about Illinois bond sales from 2005 to early 2009 - when Rod Blagojevich was governor and Pat Quinn his lieutenant governor.
The Quinn administration says since then, it has enhanced the information the state provides when it sells bonds, which is the state's key way to borrow money to fund long-term infrastructure projects. House Republican Leader Tom Cross says he hopes the SEC investigation won't hurt Illinois' chances when it tries to borrow in the future. "It's a shame, it's I think a real problem, once again image-wise, for the state of Illinois."While the settlement means the state will have to share more details about the funding of its pension systems, lawmakers, investors and bond houses are already well aware that Illinois is short - by about 100 billion dollars - from what it's supposed to have in the bank for employees' future retirement benefits.