Reduced investment returns during a future recession won’t cripple state budgets, but state policy decisions ahead of a future recession might, according to a new report.

Credit rating agency S&P said many U.S. states have learned lessons about fiscal discipline when it comes to public retiree costs. State governments have made changes in the past decade that will help shield their budgets from a future recession, according to S&P analysts.

“In recent years, many states have made conservative changes to actuarial methods and assumptions that, while hindering actuarial funding ratios, show a more realistic assessment of market risk tolerance for states, thus better enabling them to make funding progress,” the report read.

But Illinois, still dealing with debt from a years-long budget battle and budgets that only increase spending, could be left in what Illinois Policy Institute Budget and Tax Research Director Adam Schuster called the worst position of any state in the nation.

“While there will be negative effects of a recession, you can mitigate those with smart policy,” he said. “Illinois has been doing the opposite.”

Gov. J.B. Pritzker has proposed a number of measures to help the state pay its share, including pushing back the scheduled payment schedule, borrowing to pay more into the funds and selling state-owned assets to the pension systems.

Another metric that S&P has started using recently provides a revealing look at how well Illinois is doing in paying for its promises to retirees.

Called net pension liabilities per pension contribution, it’s essentially akin to each state paying the minimum on their credit card balance and Illinois’ was the lowest of all states.

The state’s listed pension debt as a ratio to what it pays in is $10,834. The only other state above $10,000 was New Jersey. Most other states were below $2,000.

Schuster said the statistic is even more grim considering the state already puts a fourth of its operating revenue toward pension contributions.

“We’re already paying the most in the nation toward the pension system, but we also have the furthest to go in order to be able to pay that debt burden down,” he said.

IPI and others have said the state needs to renegotiate pension benefits, but the state’s constitution forbids reducing promised pension benefits. Under the existing payment schedule that’s required by law, the state’s required contribution rises every year and is set to be nearly $10 billion in 2022.

Cole Lauterbach reports on Illinois government and statewide issues for The Center Square. He has produced radio shows for stations in Bloomington/Normal and Peoria, and created award-winning programs for Comcast SportsNet Chicago.

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