Rudderless ship breeds pension failure
To the Editor:
There was much speculation and hype by Chicagoland media in the lead up to Friday, August 17, for this was the day Governor Quinn called Illinois lawmakers back to Springfield for a special legislative session under the guise of striking an agreement to overhaul Illinois' five retirement system.
Not surprisingly, lawmakers failed to come up with a measure to rein in public employee pension costs.
The House, however, did find time to expel Chicago Democrat Derrick Smith (10th Representative District), by a vote of 100-6, for federal bribery charges. Even so, Rep. Smith could be sworn into office again in January if re-elected by his 10th Representative District. Furthermore, Smith can't be expelled a second time around unless he is indicted on a different charge.
Telling is that any potential reforms discussed since the early spring have all been watered-down to nothing.
In fact, one measure introduced might have been more appropriate for an April Fool's Day prank.
Senate Bill 3168 would have forced members of the General Assembly pension system to choose between keeping their 3% compounded interest cost-of-living increases or hanging onto their state subsidized retiree health care. Target date, summer of 2013. The bill would also have eliminated pensions for any new members of the system.
Herein lies the joke aspect of the pension reform proposed by members of the General Assembly under Senate Bill 3168: In so far as the governor's budget office has projected a savings of less than $50 million from the bill, it represents only one tenth of one percent of the state's overall retirement debt. This is an amount too minuscule to even attempt to call a start!
The estimated pension debt is often listed as $83 billion. Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, has done the math and has concluded that Illinois legislators must actually address a total shortfall of $203 billion.
Following is the full list the states' reported unfunded amounts that legislators need to address to protect retirees, taxpayers and the state's crumbling finances:
- $83 billion in state pension liabilities;
- $54 billion in unfunded state retiree health care costs;
- $15 billion in pension obligation bonds; and
- $50 billion in unfunded liabilities at the local government level.
Governor Quinn, not unlike President Obama, prefers to put the blame on Republicans rather than on his own failed leadership and failed policies.
Although there is enough blame to go around -- Democrats want to avoid angering their union base while Republicans seek to capitalize on the inaction -- Democrats and Republican alike put the blame on what is called a "catastrophic failure" of leadership by Governor Quinn.
For months Governor Quinn has called on lawmakers to pass a comprehensive plan to put in place to put in place pension changes for workers across the board, but was Quinn really serious?
According to Democrat Jack Franks (Woodstock, 63rd District), in an interview heard on the Nick and Jack Saturday afternoon talk radio show on WLS-890AM the day after the special session to pass pension reform produced zilch, Quinn called the special session without any definite plans. A deal was almost had in May, but because Quinn has changed his position so many times, Franks no longer knows where Quinn stands.
With apologies to his dad, Rep. Franks spoke of part-time public employees who pay little into their pension systems, but yet receive pensions north of $100,000 in retirement. Franks related how his dad was one of them.
Ted Dabrowski poses this question in his article, "Illinois Pension Math": If Democrat-controlled Rhode Island with the second-worst funded pension system in the nation (Illinois is last) could pass a series of reforms to cut the state's unfunded liabilities by almost 50%, why aren't Illinois legislators able to grasp the severity of their own state's math by enacting similar legislation?
Illinois legislators, knowing that pensions cannot be sustained, but unable to do anything about it, continue to receive little help from Governor Quinn due to his lack of leadership. For like a rudderless ship, disaster and catastrophic financial failure looms for state and local government unless there is a dramatic reform on the structure, incentives and accountability within the five government retirement systems.
Not to do so represents a dereliction of duty to the people of Illinois by both Gov. Quinn and the Illinois General Assembly.
Enough with the bamboozle tactics of phony reform! Real reform is called for as Illinois is facing a financial Armageddon.
Lake Bluff, Ill.
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Illinois General Assembly
301 S 2nd Street
Springfield, IL 62707
Illinois Policy Institute
190 S La salle St
Chicago, IL 60603