Pension vote on the agenda
The heretofore secret pension plan may get a public vote Tuesday in Springfield.
It's a funny way to do business, but state legislators will gather in Springfield on Tuesday to consider and perhaps vote on what's billed as pension reform legislation that was drafted in secret and whose full details have yet to receive thorough public review.
Reform, of course, is in the eye of the beholder. One man's reform is another man's highway robbery. That's why leaders of public employee unions have announced their intention to strangle this baby in its crib. Others, like Gov. Pat Quinn, House Speaker Michael Madigan, Senate President John Cullerton and Republican legislative leaders, Sen. Christine Radogno and Rep. Jim Durkin, will be twisting arms in their quest for enough votes to pass the bill they contend will save $160 billion over 30 years.
The bottom line is this:
— past governors and legislators are solely to blame for the $100 billion pension under-funding problem.
— current state workers and retirees met their obligations to pay into the state's public pensions systems to finance the pensions promised to them.
— neither of those two realities matter because what's done is done. There's no time machine available to use for rectifying past mistakes.
Gov. Quinn and legislators, no matter what their culpability in creating this problem, have to fix it. How they do so will determine to what extent the state can function in coming years. Already, actuarially mandated payments into state pensions require funds to be diverted from core functions including education, roads and highways and law enforcement.
The big question surrounding the proposed package is whether it will actually do what its supporters say — put the public pensions back on a reasonably sound financial footing. That's an important issue because Illinois has been down this road before.
In 1994, when Jim Edgar was governor, legislators passed a plan aimed at addressing the then-roughly $20 billion pension shortfall by 2045. Had they followed through, the state's public pensions would be in far better shape than they are now. Unfortunately, Gov. Rod Blagojevich and legislators didn't follow through, opting to spend elsewhere money that should have gone to pensions and creating the present disastrous state of affairs.
The plan's details were not released until Friday, but the intention is to put limits on what's paid out of the pension systems and increase what's paid in.
It reportedly includes gradually raising the retirement age for workers under 46, creating a 401(k) option and modifying the current policy of granting 3 percent annual cost-of-living increases.
The COLA proposal is the major feature in the plan and, according to news reports, it would be based on employees' years on the job multiplied by $1,000.
Under that formula, a 25-year government veteran would get a 3 percent annual COLA only on the first $25,000 in pension payments, regardless of the total annual pension. The goal is to protect those with smaller pensions, like $40,000 a year, at the expense of those with larger pensions, like $100,000 a year.
The plan also calls for current workers to pay 1 percent less than they pay now, a legal sop to the concept that the state is engaging in a legally valid trade with public employees. It's aimed at getting around the state's constitutional prohibition on any diminution in pension payments.
At the same time the state is limiting what's going out, it's promising to put more money into public pensions. Interest money now going to pay off state pension bonds will be deposited in the pensions once the bonds are paid off in 2019. The state also is reported to be planning to deposit 10 percent of the savings from benefit cuts into the pensions.
Promises, of course, can be easy to make and hard to keep, particularly those emanating from Springfield. The fact that our elected officials soon will be in campaign mode invites skepticism about the plan as well as its prospects for passing.
State Sen. Bill Brady, a Bloomington Republican who is a member of a special House/Senate committee that studied the issue, calls it "significant and as good (of an agreement) as we're going to get."
Skittish legislators have repeatedly failed to address the problem. Now, however, with this bipartisan agreement, prospects for passage look better. That's because legislative leaders from both parties hope to provide enough votes from their members to allow those Democrats and Republicans with large public employee constituencies to vote no. It seems like a sure bet that all area legislators will vote in opposition to whatever is proposed, even though they may be privately hoping the bill passes.
Whatever happens, Illinois will remain in dire financial straits. Our pension woes are more than the tip of an iceberg, but other large problems remain. Illinois is deeply in debt, hosts a business climate hostile to job creation and for years has been determined to spend more than it brings in.
The whole pension fiasco is emblematic of an irresponsibility so vast that what's wrong with Illinois overwhelms what's right with Illinois. Now the same class of people who created the problems are being assigned the responsibility of solving them. Don't hold your breath on that.