Letter: Back to Springfield regarding pensions
On Friday, Aug. 17, Governor Quinn has called a Special Session of the General Assembly that will cost Illinois taxpayers an extra $40,000 and will be as good for us as a deep-fried Twinkie at the State Fair.
I hope that the pension crisis will be resolved and I will reintroduce a practical compromise—with some improvements—that I have sponsored for the past three years. However, you and I both recognize that it is more likely that the public employee union alliance with the Quinn-Madigan-Cullerton triumvirate will continue to protect the insolvent but lucrative-for-them “status quo”.
The longer this problem remains unsolved, the more these special interests benefit … but the worse other priorities like education, social services and public safety suffer. And, the more severe the ultimate solution will need to be.
According to the non-partisan analysts at the Illinois State Commission on Government Finance and Accountability (COGFA), approximately 40 percent of our Pension Unfunded Liability is due to an accumulated non-payment of annual pension contributions, 40 percent is due to changes in actuarial realities regarding pension benefits, and 20 percent to underperformance of investments in pension plan assets.
Over the last eight to 10 years, the amount of state funds going to pensions has tripled, now exceeds the appropriation for providing education itself, and has consumed the revenue generated by the 67 percent income tax increase passed by Quinn and the ruling majority during the “lame-duck” session 18 months ago.
For the past three years, I have sponsored common-sense compromise legislation that has been called “Cap, Age, COLA”.
First, we must cap the abuses of huge pension benefits to any retiring public employee. It is an easy consensus that my taxpaying constituents refuse to pay more than $120,000 for anyone who doesn’t come to work in retirement. Secondly, we must ask all public employees if they will please work until age 62, which is the early retirement age for Social Security, rather than 55 years old. Finally, one-half of the benefits portion of the unfunded liability is due to a 3 percent compounded cost-of-living annual increase. Between the 20 years from retirement age 55 to 75 years old, every $50,000 pension grows to $100,000 (and those $125,000 pensions grow to $250,000). At least one-third of this increase needs to be cut in order to save billions more.
When I present these proposals to individuals and groups of public employees, I get reluctant approval … but voluntary approval.
Seventeen years ago, Steve Rauschenberger, Peter Fitzgerald, Pat O’Malley, Dave Syverson and I passed legislation that put in place a funding mechanism called a “Continuing Appropriation,” where the state debt was paid as the first priority, then this pension obligation was paid, and only after those two were paid did the rest of the bills get paid. We mistakenly and naively thought that this legal promise would be honored.
Now, in exchange for concessions on “Cap-Age-COLA,” we need to put onto the ballot a constitutional amendment that guarantees payment of these obligations. Promise less, but keep the promise.
I am amazed that leadership in both political parties ignore a solution that enjoys substantial grassroots support. I can’t help thinking that Illinois citizens and taxpayers deserve so much better than the “low theater” that we will witness on Friday. I hope that this is not another example or more evidence of the adage, “We get the (quality of) government that we elect.”
Senator Chris Lauzen