Quinn in August herded them to a high-drama special session in Springfield, pleading for a pledge to check the state’s economy into pension rehab.
There was one problem with this scenario. The House bill that Quinn asked lawmakers to rally around would not achieve significant pension reform if passed. A similar Senate bill passed last May was equally toothless.
There are so many elephants in the room they might need to move the General Assembly to Soldier Field, or the Serengeti Plain. Maybe they’re waiting for a stampede. It’s coming in the form of:
- The endless drain of covering pension costs at the expense of nearly everything else (such as education and law enforcement, to name two);
- The cloud of nearly incomprehensible unfunded liabilities. These cannot merely be delayed or reduced in severity by legislative theater and token spending cuts.
That failed House bill, with its requirements of only minor concessions by state workers (and excluding teachers), predictably led to union members heckling Quinn in public. But instead of begging them to be more polite, the Governor should be shouting back, “You ain’t seen nothin’ yet!”
Given the size of the state’s pension crisis after years of fund raiding and unrealistic investment growth forecasts, the goal should be to wield a wrecking ball, not a scalpel.
In two pieces of timely analysis, Illinois Policy Institute experts Ted Dabrowski and Paul Kersey expose the shortcomings of quick fixes, disguised as reform, recently under consideration in Springfield.
- The House measure was a 25% solution. By excluding the retirement systems of both public school teachers (TRS) and universities (SURS), about 75% of the state’s pension obligations “are off the negotiating table,” Dabrowski writes.
- Only two of the state’s five retirement systems are called on to make cuts. That means slightly more than three percent of retiree debt – $630 billion due across the next 33 years – would be reduced under pending legislation.
- Government union leaders pledge to increase employee contributions to retirement funds, Kersey reports, but only if – and it’s a big if – the state shuffles its funding priorities to favor pensions, while promising to keep its hands off the cost-of-living increases guaranteed the currently retired. Not feasible.
Because the more accurate total dollar figure tied to unfunded pension liabilities is $100 billion higher than Quinn and others acknowledge — $183 billion, not $83 billion – no union or group, workers and retirees alike, can be immune.
Legislation that does not raise retirement ages, end automatic cost-of-living hikes and require realistic forecasts on fund investment returns is not reform. Legislation that does not transition the currently employed from defined benefit programs to 401(k)-based plans is not reform.
For the sake of future generations, the elephant two-step needs to be the last dance.