Denial by delay in state pension crisis
The ostrich approach to problem-solving is a proven failure. Why keep repeating it in the state's pension crisis?
One of the definitions of insanity is doing the same thing over and over again and expecting a different result.
Over past years, Illinois governors and legislators have declined to make the actuarially required contributions to the state's public pension systems, and the result is a genuine pension crisis. Underfunded by roughly $100 billion, the five systems will be teetering on bankruptcy in a few years if the General Assembly does not act.
Given that grim reality, it was surprising to hear that Chicago Mayor Rahm Emanuel is proposing that his city delay the payment schedule for Chicago's police and firefighter pensions.
Chicago faces a state legislative mandate to increase its pension contributions by $600 million in 2015. That's 20 percent of the city's operating budget, and coming up with the money would require either large cuts in core municipal spending programs or a dramatic property tax increase.
With re-election in mind, Emanuel wants to push those payments into future years. As demonstrated by the state's pension debacle, that's a sure-fire prescription for making a bad situation worse.
Emanuel had previously argued that it is imperative for the city to shore up its pensions with increased contributions. But The Chicago Tribune reports that he's been forced to revise his plans because state legislators have so far failed to take action on the state's pension woes.
Emanuel, the Tribune reports, was hoping to use the state modifications to its pension plans as a template for making changes and, as a result, reducing underfunding of the city's employee pension plans. Since the state has taken no action, Emanuel confronts a state law that requires him to make larger contributions than he had expected — hence, his decision to skip the payments for the time being for purely political reasons.
A special committee of Illinois House and Senate members has been meeting for the past three months with the hope of coming up with a legislative package that will ease the looming pension disaster. It's potential political dynamite. That's why they have yet to put forth any substantive proposals for legislative action.
State Rep. Elaine Nekritz, a Northbrook Democrat who is serious about tackling the problem, recently said she will no longer make predictions about when the Legislature will act because she's been wrong so often before.
At least for a while, the consensus was that legislators will act on the pension issue during the fall veto session, and they may do so. More recently, however, state Rep. Jim Durkin, the new House Republican leader, said he doesn't expect action on pensions until January at the earliest.
Why the delay? Surely, there couldn't be a connection between casting a tough vote in October and the election filing period in December. If legislators wait until January to act, assuming they even act then, the filing deadline for running in the March primary and November general election will be over, and they should coast to re-election.
That's a short-term option that's good only for our legislators. In the meantime, the serious pension problems for the state as well as Chicago will only grow worse, not that many people in positions of authority seem to care.