Illinoisans who thought new House Speaker Emanuel “Chris” Welch might change the direction the state is headed in just got a dose of reality.
Welch recently said he wants Illinois to have a second go at a progressive tax scheme, this time committing the proceeds to pensions. Illinoisans rejected Gov. J.B. Pritzker’s first attempt, he said, because they didn’t know where the new revenue would go.
“Folks don’t trust us,” Welch said.
Welch is right about the trust factor, but he’s wrong to think Illinoisans will suddenly approve a tax hike just because the Legislature promises to funnel the new revenue to pensions. They know it’s unlikely politicians will keep their promise. And Illinoisans know the state’s unreformed pensions are a corrupted mess — that they’d be throwing good money after bad.
First, Illinoisans don’t trust their politicians. It’s why they rejected the progressive tax in the first place. And Welch’s promised ethics reforms — if they even happen — won’t be enough to repair the Legislature’s reputation after decades of broken promises, mismanagement and corruption.
Second, there’s Welch’s promise to spend the money on government-worker pensions. If he thinks a promise to pour more money into retirements is a winning argument to Illinoisans, he’s badly mistaken.
It’s ironic that about the time Welch was making his comments, the size of predecessor Mike Madigan’s retirement benefit was being reported. The former speaker’s pension will start at $85,000 but will jump to $149,000 the following year due to a special provision for lawmakers over 55 and with more than 20 years of service — a provision Madigan helped pass.
That small anecdote captures how Illinois pensions work. Illinois pols have for decades added one perk or benefit after another to pensions, slowly growing the already-generous retirements of state workers. Government workers scratch the backs of politicians, and politicians pad worker incomes.
Former Gov. Jim Thompson added compounding to Illinois’ already-high 3 percent cost-of-living adjustments in 1989. Former Gov. Jim Edgar sweetened Illinois’ pension formula even more in 1998, to create what he called “the most significant increase in pension benefits for state workers in a quarter-century.”
And more recently, Pritzker brought back 6 percent end-of-career salary spiking for teachers just a few years after those spikes had been cut in half.
Add to that unused sick leave that can be used for as much as two years of service credit, double-dipping that lets retired superintendents work part time at other districts, pension pick-ups where teachers contribute little to nothing toward their own retirement benefits, and retiree health insurance that comes free with 20 years of service. The list goes on.
Illinois government workers are now recipients of some of the nation’s most generous retirement benefits. The full value of those benefits is captured in the average pensions of recently retired career workers, those with 30-plus years (half of all retired teachers, for example, have more than 30 years of service).
Career teachers are retiring in their 50s with pensions just shy of $80,000. They’ll get automatic 3 percent compounded cost-of-living adjustments and end up with an average of $2.6 million in lifetime pension benefits.
It’s similar for state university workers, who are also retiring in their 50s with starting pensions over $70,000.
State employees start with lower pensions, but that’s because the overwhelming majority participate in Social Security. Nevertheless, they, too, are retiring in their 50s with starting pensions nearing $55,000.
Those growing benefits have long been unaffordable for the ordinary Illinoisans who are forced to pay them. And as we’ve long pointed out, Illinois’ problem has always been one of overpromising, not underfunding.
Welch’s proposal suggests he doesn’t understand how much of an extreme outlier Illinois really is. No state has more pension debt, has a lower credit rating, or is losing more people than Illinois. Those realities require structural reforms, not more tax hikes.
The new boss is proposing the same failed ideas of the past 50 years. Expect people to oppose a progressive tax now just as much as they did the first time.