The state may try to solve its pension problems by passing the buck.
Gov. Pat Quinn, in his State of the State speech Wednesday, briefly alluded to the financial problems surrounding Illinois' public pension systems, stating that there will be no easy fix.
He's right, and we're looking forward to the recommendations made by a Quinn-organized working group made up of legislators and members of the governor's staff.
But Quinn as well as House Speaker Michael Madigan and Senate President John Cullerton already have dropped some big hints about some changes they would like to see in funding pensions for retired teachers and public university employees. Unfortunately, one of their big ideas is not so much reform as passing the buck to local school boards and university administrators.
Gov. Quinn has said that the practice of the state paying for employee contributions to the Teachers' Retirement System and the State Universities Retirement System "requires careful examination" because employers "need to have a stake in funding their own employees' pension costs." In other words, the payment made (or not made) by the state should be made instead by the employer.
Madigan has made similar comments. One never knows exactly where he really stands because he doesn't so much announce a position as drop hints.
Nonetheless, Madigan recently suggested it was something unusual for employers not to have skin in the game with regard to their employees' pensions.
(What's really absurd is for Madigan to make any statement about reform when he was responsible for legislation that allowed two Springfield teachers' union lobbyists to qualify for lifetime $100,000-a-year teacher pensions after working one day each as substitute teachers.)
Adopting this plan would require local school districts and universities to assume a huge new financial burden. A spokesman for the Illinois Association of School Boards characterized that shift in responsibility as meaning "an $800 million cut in public education funding or ... an $800 million property tax increase to cover pension costs."
Those choices won't do much for the digestion of school board members across the state.
They probably would note that they already make substantial payments to the Teachers' Retirement System for their employees' pensions. They certainly would argue that this new burden would be unendurable.
Although they cannot impose property taxes, public universities would face the same cost burden, creating one more reason to keep raising tuition.
This proposal should not be adopted, and perhaps it won't pass master with Quinn's working group. The governor's office already is getting some blow-back on the issue.
But Quinn and Co. are laying the groundwork to ease their burden by increasing the burdens of school board members and university trustees. Those who would be affected should consider themselves forewarned.
"800 million cut in public education funding" How about cutting pensions and benefits like many other private companies have done. Gov. Quinn is exactly right in that pensions should not be funded by the state taxpayers who by majority dont have any pension to look forward to.
Bob620,
Why should't the social security participates also have their pension and benefits cut like private companies.
Private companies use government backed insurace to pick up the bill for pensions of bankrupt companies (most likely reduced). Those same retires will be able to apply for social security based on their earnings and years worked. The result is private sector employees will be able to get reduced pensions (thanks to the taxpayers) and their social security.
In general, the state employees pay into their pension in lieu of social security. This means a person is not able to collect social security. The state workers don't have a pension AND social security.
Some people work part of their life in the private sector then move to public. This results in reduced social security and reduced government pension.
We should all try to undersand the situation first, then we might be able to find a solution. Maybe the state pensions can get the same federal pension insurance that the private companies get.
Yes I try to understand everyones situation. My whole point was maybe mistated in that instead of cutting education funding by 800 million dollars maybe pensions , which by the private sector are pretty generous on returns of investment by the employee and years required to get them, should be reduced. I dont in anyway think that anyone should lose a total pension.Yes I think that if a company goes under then the employees should not get the pension. I can assure you that I wont be receiving a pension of any kind.
Another "taxpayer" howling for money that is not his. Evidently, no teacher ever taught him anything. The pension payments by the employees were made by the employees. The pensions payments which were to be made by the employer, the state of illinois, were skipped so Pork Barrel projects, and corporate taxes cuts could be funded. The money was spent on pandering to the "taxpayers", and corporations. Yes; the state employees, universtiy state employees, and teachers are taxpayers also. They are going to pay increased property taxes to fund what their employer did not fund. I don't know what motivates some people to advocate stealing from others. Anyone including the media knows the facts. Now because the state has spent, spent, and wasted money over the years without meeting the requirement for the pensions; it is alright to steal the money owed? What will the legislators do with the money saved? They will spend it on more programs, corporate tax cuts, pork barrel projects, and anything else that will provide "campaign donations". Theft is theft no matter how you justify it.
Teachers finance their own pensions. They can contribute up to 20% off the top (meaning it reduces their AGI) with the understanding that it is a benefit of their position and contribution to society, but the money comes from them, not "other" taxpayers. You are right: Theft is theft.
Spot on. I don't get a pension. I was promised Social Security at 65. I not getting it then and when I do, it will be for a reduced amount. Public employees should be treated the same. The taxpayers simply can't afford them anymore. To push the burden to homeowners is grossly unfair. Homeowners didn't vote in the benefits and would not have. What about owners of rental property? If it is located in another county, they don't get to vote at all. Property tax increases become taxation without representation.
Chicago teachers pay into their pensions with the employer share being paid by property taxes rather than the state, although there have been exceptions. Chicago has many more businesses, and home owners paying property taxes than down state does. If there is an objection to the taxed amount in Chicago, attorneys can be hired to oppose it. The Speaker of the House, Mike Madigan, has his "full time job" running such a law firm. What would happen if Chicago's way of funding teacher pensions became the law across the state? School districts in metropolitan areas maybe able to do it with massive property tax increases. School districts in rural areas may not be able to do it. There would be more cuts in teaching staff, and educational services. Property owners who have no children, or grown children would howl about tax increases. Would universities fund their employer share of the employee pensions? The employees themselves would continue to fund their mandatory payments. The state employee, university employee, and teacher pension systems have done fine with the exception of the employer payment not being made by the employer, the State of Illinois. Passing this criminal debt (the state would have been in court a long time ago if it were a private employer) onto the individual school districts, and universities would essentially kill off any retirement for teachers, and university employees. The elderly, retired teacher who helped you with Algebra would die in poverty. The university employee who helped you would end up the same way. These people did not have a choice of a 401K. They were required to pay into their pension system. They did it with every pay check. Most are ineligible for Social Security. This is classic fraud. What do you think the legislators would do with the money "saved" by passing on the debt? Would they spend more money on more programs, corporate taxe cuts, and pork barrel projects?
Interesting that I have been scolded by two other posters proclaiming that state employees fund their own pensions without taxpayer support. But then I am told that Chicago taxpayers are funding the states portion. Obviously the state employees are not funding the whole amount of pensions or their would be enough money to go around. This all sounds a lot like the social security scam that I am paying into that has been stolen also except I get to wait until I am 67 to see if there is anything left , unlike a few of my retired state employee friends who retired in their early 50s on a pension income and health ca ,e plan much higher and better than I make working.
The state employees, university state employees, teachers, firefighters, and police pay out of every paycheck their required pension payment. The State of Illinois, the employer of the state and university employees, has not paid the required employer's portion. The teachers pension has not been funded by the employer either. The teachers in Chicago fund their pension with their paychecks the same way. The employer payment is paid by Chicago property taxes. The governor, and some of the legislators want to pass on the required employer payment to the school districts paying for it with property taxes as is done in Chicago. Social Security is not a scam. It's problem is that the Federal government has used the F.I.C.A. (Social Security) payments for government expenses for years instead of leaving it for Social Security. Pensions, and 401Ks are funded by the employee, and the employer in most cases. When people with 401Ks had their investment tank with the economy, some of them became angry because the pension systems did not tank also. Public employees did not have a 401K choice. They were required to pay into the pension systems. I hope that explains it for you; but I doubt it.
Some of us have to work to 70 years old to get the full social security benefit.