In the next life, whatever that entails, we'll be thrilled if we never have to type the phrase "ruinous Illinois pension crisis." But before we shuffle off what Shakespeare called this mortal coil, writing about our state officials' failure to fix the retirement system that many of them helped drive to destitution is our lot. By their inaction these politicians are dooming not only taxpayers and public-sector retirees, but the financial ability of Illinois to meet its many other needs.
What unfolds below is our Tribune proposal to get past this gridlock. It would flummox almost all of the players in this little drama, which is but one reason that legislators and Gov. Pat Quinn should use it as their template moving forward. The alternative to widespread aggravation now is an outpouring tomorrow of richly deserved public anger against incumbents of both major parties.
As we've all learned in recent days, Illinois' worst-in-America pension funding shortfall promises to be much larger than the $83 billion to which our politicians now admit. New reporting standards for U.S. public pension systems will force Illinois officials to calculate that shortfall more realistically than they do today. Expect a furious outcry from taxpayers when they learn that their state's leaders — more about that word later — have put them on the hook for far more than $83 billion in unfunded pension obligations.
Given these frightful disclosures bearing down on them, you'd think lawmakers would be desperate to heed Quinn's demands for reforms to salvage the pension system. Not so. This spring, the General Assembly considered limiting retirees' annual cost-of-living adjustments as part of a bargain that would include workers' future raises in their pension calculations, and give them access to retiree health benefits.
But in the session's final days, House Speaker Michael Madigan insisted that a pension deal had to shift to school districts the responsibility for funding their employees' pensions — a cost state government pays today. Republicans retorted that a shift could force school districts to raise property taxes. So legislators did what they've done for eons: They adjourned for summer vacation without giving Illinois citizens any solution to pension indebtedness that, according to the governor's office, grows by $12.6 million every day.
To review the realpolitik here:
Some suburban Democrats want to be able to say they've fixed the pension crisis. Other Democrats fear that any fix — especially before the Nov. 6 election — will alienate public employee unions that support them with votes, money and campaign muscle. And Republicans keep insisting that any shift of pension costs to school districts is a deal-breaker.
Enough. Republicans, accept the shift, and let it phase in over a few years' time at the rate of a half-percentage-point of employees' salaries per year. The schools, no matter how much they squeal, can afford this, and they ought to: We're talking about their employees, and retirement benefits are among their costs of doing business. It's unjust that, statewide, only Chicago taxpayers fund their educators' pensions. Just as it's unjust that most people in the state pension system aren't, and never were, state employees; the biggest bloc is, yes, the educators. Remember, a broad pension reform package should, over time, lower the school districts' cost of the benefits they pay.
This provision in a pension deal would be a huge win for Democrats. It would greatly enhance the survivability of the state pension system on which their union allies depend. In return, Republicans should get something Quinn himself proposed in April: higher pension contributions from today's employees.
Yes, the unions — like the school districts — would squawk. But with this mega-trade-off in place, both parties could say they sacrificed mightily yet also won huge concessions. Then they could settle on the basic deal from May: lower cost-of-living accrual, retiree health care, inclusion of future raises in pension calculations. The later retirement age that Quinn also proposed in April but that infuriated organized labor? Gone.
Governor Quinn, we hope you'll get behind this template or something like it and back it up with the card you haven't wanted to play: a special summer session in Springfield. Force these legislative leaders — Madigan, House Minority Leader Tom Cross, Senate President John Cullerton, Senate Minority Leader Christine Radogno — and their subservient, golf-playing, fundraising caucuses to solve their pension debacle. Remind them that if the credit-rating agencies slap Illinois with still more downgrades that raise borrowing costs, taxpayers will scream bloody murder at everyone.
We can think of multiple reasons, Governor, for legislators to reject this template. But they were elected — all of you were elected — to deliver solutions. To be leaders. If the four caucus heads embraced the deal we're proposing and told their members that it has to pass or they'll face campaign funding and other harsh consequences, it would pass.
Governor, when you threatened legislators with a special session if they didn't produce Medicaid reform, they produced.
If they now won't end the ruinous Illinois pension crisis, bring them back to Springfield until they do.Copyright © 2014, Los Angeles Times