The astounding reversal on Illinois’ pension crisis

By Ted Dabrowski, Wirepoints | Feb 7, 2019


Governor J.B. Pritzker has made his position clear on pensions: No reforms. Not necessary. Just pay them. Nobody in the Democratic party, which holds supermajorities in both the House and the Senate, has voiced any dissent.

But consider what the Democrats argued in court just five years ago. Like today, they held the governorship and supermajorities. When they defended SB1, a modest pension reform bill passed in 2013, their position was also clear: Benefit reductions, not tax increases, were essential.

Attorney General Lisa Madigan made the Democrat’s case in 2014 in front of the Illinois Supreme Court. The pension problem and the fiscal crisis it caused were so severe, she argued, that the rarely used “police power” doctrine – basically emergency powers – justified an override of the state’s constitutional pension protection clause.

Madigan’s case ran on the same points that financial realists and pension critics had been saying all along – that tax hikes and service cuts, rather than reforms, would worsen the flight of employers from the state and devastate the poor. Madigan also cited the conclusions reached by the General Assembly itself: “The fiscal problems facing the state and its retirement systems cannot be solved without making some changes to the structure of the retirement systems.”

The Illinois Supreme Court ended up striking down SB1. And with that, lawmakers essentially abandoned the idea of structural changes to Illinois retirements.

Since then, Illinois’ finances, and its pension crisis, have only gotten worse. Madigan’s economic and financial arguments for pension reform are more relevant than ever.

But Pritzker and his party are unequivocally opposed to a constitutional amendment to reform pensions.

So, what’s changed? Are Illinois lawmakers simply hypocrites?

Most Illinoisans instinctively know the answer.

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