Political hardball on pensions
A state teachers' union is sending an unmistakable message on pensions — cross us and you will pay.
Illinois' nasty public pension problems have produced equally unpleasant political problems.
That's why state legislators have for months avoided dealing with the merits of the $80 billion-plus pension deficit by pushing any tough decisions off until after the Nov. 6 election.
But it's not just legislators and Gov. Pat Quinn who are the targets of wrath from those with the most to lose from any changes.
Just a few days ago, the Illinois Federation of Teachers called for the prompt dismissal of Richard Ingram, the director of the state's Teachers' Retirement System.
What was his sin? Ingram suggested that the state may have to cut back on retirees' annual cost-of-living increases to keep the pension systems from going under.
In an interview with Crain's Chicago Business, Ingram said state legislators have limited options in reducing the pension fund's liabilities and identified one possible area of savings as changing the formula for annual cost-of-living increases.
"Look at every other state that's done pension reform — what have they done? They've changed the COLA because that's where the cost is."
Ingram went on to say "if that is where we need to go in Illinois, then we can do it in a manner that is targeted and effective and protects those that need it the most and, at least to a large extent, get the job done."
In an over-the-top response to Ingram's measured remarks, the Illinois Federation of Teachers demanded Ingram's scalp.
"It is inappropriate for Mr. Ingram, who is responsible for safeguarding the retirement benefits of 360,000 teachers, to promote his personal views by advocating for the destruction of TRS members' retirement security. Such actions contradict his fiduciary duty and are in violation of a resolution passed by the TRS board of trustees. Mr. Ingram's insubordinate and irresponsible actions can only result in one honorable outcome — his resignation," the IFT stated in a news release.
The IFT statement is instructive for how politics is played generally and on the pension issue specifically. It grossly exaggerated Ingram's statement by saying that he advocates "the destruction of TRS members' retirement security" when he said no such thing.
All Ingram suggested is that some modification of the COLA formula is one means of preserving — not destroying — the system that funds teachers' pensions.
The IFT's characterization is not just dishonest, but intentionally so.
As for Ingram's alleged insubordination by violating TRS policy, pension system spokesman Dave Urbanek said the IFT is misinformed.
"There was no resolution passed," he said.
This, however, is the way the game is played these days, and the more emotional the issue, the more dishonest the tactics of those who participate in the debate.
It's not going to change any time soon.
The state faces a series of extremely difficult financial problems, including those related to public pensions.
Legislators required taxpayers to pay handsomely to address the state's financial woes, including pensions, when they voted two years ago to increase the state's personal income tax by 67 percent.
Unfortunately, the gusher of new revenues pouring in to state coffers isn't nearly enough. So more sacrifice is going to be required, and that may include modifying retirees' COLAS. To unilaterally try to end that debate through efforts to silence anyone who raises it is irresponsible.
TRS spokesman Urbanek said that his boss has no plans to resign and will continue "talking to people honestly about what (options) the General Assembly is considering."
"There is a fiscal cliff that TRS is facing," Urbanek said.
This kind of problem requires broad and honest debate, something generally foreign to state government in Illinois. What it does not need is any repetition of the IFT's tactic of trying to shut down discussion through intimidation.