The state legislative session that ended Friday was an abject failure, one that demands a new approach to solving Illinois’ public pension crisis.
Lawmakers adjourned the spring session without coming to any agreement on a plan to reform the state’s pension systems, which are underfunded by almost $100 billion, a debt that grows by $17 million each day.
With pension obligations set to consume a fifth of all state revenues in the next year and the state’s credit rating already the lowest of the 50 states – another rating agency lowered the state’s rating Monday – pension reform was the top item on everyone’s agenda for the session. Still, nothing was accomplished.
The blame lies with lawmakers in general and with the state’s legislative leaders, House Speaker Michael Madigan and Senate President John Cullerton, in particular.
A pair of Chicago Democrats, Madigan and Cullerton could not reach an agreement among their own party members, even though they hold comfortable majorities in both houses.
Given their failure, it is time they allow others to become involved in crafting a workable compromise. More people need to be involved in this process – Republicans, Democrats, unions and taxpayer advocates – to come up with a compromise solution that can extricate us from this crisis.
The status quo is untenable and benefits almost no one in Illinois.
Lawmakers already tried to tax their way out of this mess in 2011, when they hit the public with a 67 percent income-tax increase. At the time it was called temporary, with much of it supposed to be lifted by 2015, but it now seems well on its way to becoming permanent. Adding more taxes on businesses when the state’s unemployment rate already is above the national average is not a workable solution, either.
A plan that punishes state retirees earning modest pensions won’t do, but anyone who thinks that the pension systems can continue as they are without changes to reduce costs is in denial. If the systems are to survive, they must be changed.
Much of what can be done to solve the problem already has been proposed, including:
• Delaying and reducing cost of living increases,
• Reducing the amount of pension payouts to which the increases apply
• Increasing employee contributions
• Shifting the responsibility for teachers’ retirement funds to local school districts
• Using funds for state bond and interest payments for pension contributions when bonds are retired
• Capping total pension payouts.
There should also be protections against pension spiking. Most importantly, there must be real savings that will allow the state’s pension funds – and its budget in general – to be solvent in the future.
It is past time for a solution. Illinois has the lowest credit rating of the 50 states, a designation that means Illinois taxpayers spend more on interest payments than these in any other state.
The ego-driven approach employed by Madigan and Cullerton this spring has yielded only more embarrassment and financial hardship for our state.
Solving a problem of this magnitude can not be achieved by force of will. It requires compromise and input from many quarters.
Gov. Pat Quinn reportedly is trying to arrange a meeting with legislative leaders to talk about the problem. But legislative leaders already have failed to solve this problem. Perhaps Quinn can bring enough people together that a compromise solution can successfully be crafted.
Voters should demand a new process begins immediately, and when a compromise is reached, a special session of the legislature should be called to consider it.