Illinois’ pension problem is “unfixable” – not only because of the overwhelming magnitude of the problem, but because lawmakers “won’t fix it,” a Chicago business group has warned in a letter to Gov. Pat Quinn (D).
Meanwhile, Quinn’s office now is using a figure of $95 billion for the amount of the state’s unfunded pension liability, instead of the previous $83 billion figure. The recalculation occurred after the Teachers’ Retirement System revised its expected rate of return on pension investments.
Lack of ‘Courage’
The dressing-down from the Civic Committee of the Commercial Club of Chicago, a group that represents business, professional, educational and cultural leaders in Chicago, warned the state’s pension crisis is not simply a problem of accounting or math – it’s a problem of “political courage.”
“. . . it is clear our leaders and members of our General Assembly have chosen to roll over Illinois taxpayers rather than make the tough decisions necessary to save the state,” the letter, signed by Tyrone Fahner, reads. Fahner was Illinois’ attorney general from 1980 to 1983.
“It is a disservice to pensioners. But moreover, it is a slap in the face to the 95 percent of Illinois residents who do not participate in these pension systems. Lawmakers continue to live in denial on behalf of the 5 percent that do,” Fahner wrote. “It is time to level with the people of Illinois. The problem is ‘unfixable’ because you, collectively, won’t fix it.”
Quinn has said he wants the state’s pension headache fixed by Jan. 9 during lawmakers’ lame-duck session.
Fahner called Illinois “the poster child for state finances gone awry” and said the group from now on will only support proposals that cut to the core of the pension problem.
$200 Billion Debt
All told, Illinois is about $200 billion in debt, including the unfunded pension liability, bonded debt costs and unpaid bills. The state’s bond rating also has been downgraded to the point that it’s the worst of all the states.
The Civic Committee, in a memo, suggests four reforms that could “slow the bleeding” and reduce the financial burden on taxpayers. They are:
- Eliminate all cost-of-living increases,
- Institute a pensionable salary cap,
- Increase the retirement age to 67, and
- Shift annual costs to local employers over 12 years or more.
“Unless each is addressed, nothing else legislators say or do will matter. These four reforms are the standard by which all reform proposals should be judged moving forward,” the memo, prepared by Commercial Club and Civic Committee members Fahner, Miles White and Jim Farrell, reads.
“As our legislators prepare to meet in December and January, we will not allow any ‘politically acceptable’ half measures to be presented as ‘reform.’ We will work tirelessly to make these very necessary and basic reforms a reality. Our state, its employees, its retirees and its taxpayers deserve no less.”
Jayette Bolinski (firstname.lastname@example.org ) writes for IllinoisWatchdog.org. Used with permission.