To the Editor:
It was in March of this year when a prediction was made that Illinois would probably exceed $100 billion in pension debt sometime in the month, which amounts to a huge and reckless shortfall in money owed to current and future retired teachers, judges, state workers, and even lawmakers themselves. To put in perspective: $100 billion in stacks of $100 bills would weigh 10 tons, enough to buy Boeing Co. and Kraft Foods Group Inc., with a few billion left over.
Although a warning was issued in 2011 of a potential collapse of the state pension system, already the most underfunded in the nation, Democratic lawmakers and Governor Quinn continued to kick the can down the road failing to muster the political willpower to make meaningful changes. At $100 billion, Illinois pension debts stand at about twice annual state expenditures, including capital spending, with pension liabilities growing by $17.1 million per day.
House Speaker Madigan, Senate President Cullerton and Gov. Quinn are presently in a battle of wits to pass pension reform that would, at best, cut the state's $100 billion unfunded liability by $21 billion. Such a cut would take Illinois back to its 2011 level of unfunded pension liabilities, which then amounted to $42,000 in "combined" debt for every family in Illinois. At the current level of unfunded debt liability, the debt for each family residing in Illinois has risen from $42,000 to $45,000.
Whether during the past four months or the past ten years, Democrats have talked about pension reform -- describing the pension crisis as a priority -- while at the same time being unwilling to admit that they had a hand in creating it. It is therefore not surprising that a June 12 press conference amounted to a sounding board for House Speaker Madigan and Senate Speaker Cullerton, during which time each were able to opine on their efforts and the "merits" of their own plans, yet neither of their proposals offer true reform or would solve the pension crisis.
House Speaker Madigan has pushed through the Illinois House a proposal that would require workers to kick in more from their paychecks, scale back cost-of-living increases on retirement checks and increase the retirement age.
Senate Speaker Cullerton, calling Madigan's plan unconstitutional while contending that his bill would be upheld, pushed through the Senate a proposal that gives workers a choice, such as giving up health care to keep full pension benefits, to meet a constitutional challenge that pension benefits cannot be diminished or impaired once established.
Referring to the proposals offered by Madigan and Cullerton, House Republican Minority Leader Tom Cross claimed that Democrat leaders were intentionally delaying pension reform for political gain.
Taken at face value, such a ploy seems cruel and indifferent to the needs of the people of Illinois, yet there exists a paradox because voters keep electing the same type of self-serving disreputable individuals to leadership time and again.
Unable to overcome a stalemate, Governor Pat Quinn called lawmakers back to Springfield on Wednesday, June 19, for an initial special session to deal with the pension crisis, which turned out to be a nonproductive, wasteful exercise which certainly wasn't worth the $43,000 charged to taxpayers per session day.
According to Representative Jeannie Ives (R-Wheaton) who produced a summary of the special call back session on June 19, the special session was a waste of time, although it did net a committee through a voice vote to study pension reform further.
Not since 2005 has a conference committee been used, when lawmakers used it to vote on a non-discrimination bill. Even so there is no guarantee that what a committee drafts would become law. Needing approval by both chambers it could face the same problems as the existing pension legislation. An additional legislative session has been scheduled for July.
Rep. Ives is an advocate for real reform for Illinois, along with her colleague in the House, Rep. Tom Morrison of Palatine. Both believe lawmakers should be working to take Illinois into the future by modernizing its retirement systems
Happening instead is that Democratic lawmakers under pressure from government unions are seeking to double down on Illinois's failed defined benefit system even though defined pension plans are unmanageable, unaffordable and unpredictable because they force government to make promises to retirees based on assumptions politicians can't deliver.
The math just doesn't add up! A 1995 pension reform law designed under Gov. Jim Edgar was to have the pension system 90 percent funded by 2040. This assumption was based on investment returns netting 8 percent, making the payment of big pensions doable, but consider today's environment where Treasury bond yield is at 2%.
According to the Commission on Government Forecasting and Accountability, nearly 60 percent of the state's unfunded liability is due to flaws of the defined benefit system. A report by the Illinois Policy Institute echoes this claim. In actuality, the state paid $8 billion more into the pension funds than was required under Gov. Jim Edgar's 1945 reform plan.
Reps. Ives and Morris have long rejected the notion that only two options exist to fix the state's public pension system -- the Madigan way or the Cullerton way. They are firm supporters of House Bill 3303 which is based on the plan of the Illinois Policy Institute.
According to the Illinois Policy Institute:
HB3303 would reduce Illinois' unfunded liability by 46% ($46 billion), bring the total liability down to $55 billion from $101 billion.
This plan also protects constitutionally guaranteed benefits already earned by retirees and current workers.
Finally, this plan empowers current workers -- not politicians -- to control retirement savings going forward.
HB3303 deserves a vote if legislators are really serious about fixing pensions. Legislators must not be allowed to kick the can down the road again. Just look at Detroit and what happened to that once vibrant city when the end of the road was reached and there was nowhere else to kick the can.
Illinois can't continue along the same path. Despite the outward appearance of the city of Chicago, the inner core is broken and rife with corruption and crime and just a few steps away from bankruptcy and complete financial ruin.
Lake Bluff, Ill.