The budget Gov. Pat Quinn presents to lawmakers this week is "hard and difficult" because of Illinois' worst-in-the-nation pension problem, but the contract agreement reached last week with the state's largest union is a positive step forward, the Chicago Democrat said Monday.
Quinn's budget address is Wednesday.
His office has projected roughly $400 million in cuts to education and reductions to public safety and economic development. The news comes as Illinois faces roughly $97 billion in unfunded pension liability and $9 billion in unpaid bills.
"It's obviously going to be a hard and difficult budget because of the pension challenge primarily," he told reporters after an unrelated meeting in downtown Chicago. "We have to lay out the facts for the budget of the coming fiscal year and definitely the members of the Legislature have to come to the realization that pension reform is imperative if we're going to have a better budget in the future."
For decades, legislators didn't fully fund pension payments, causing the massive shortfall. Illinois has been trying to catch up, but costs grow annually.
In 2008, the pension payment took up 6 percent of the state's general funds budget. When the fiscal year starts in July, it'll be more than 16 percent.
Attempts at an overhaul have been unsuccessful, though there are several pension proposals on the table.
"The fact that pension reform hasn't happened yet has caused serious repercussions for other parts of the budget, that includes education," Quinn said. "I'm going to try and present that to the members of the General Assembly and to the people of Illinois, what our choices are."
He said the recent tentative agreement with the American Federation of State, County and Municipal Employees Council 31 in which workers will pay more of their health costs was "a good step forward" in helping the state's financial outlook.
The union agreement was reached after 15 months of negotiating.
The agreement is one "that serves the taxpayers well," Quinn said.