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updated: 1/2/2012 6:11 AM

The pension reform roar from Rhode Island

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The Daily Herald Editorial Board

Could tiny Rhode Island serve as the proverbial mouse that roars? Will suburban Democrats, and all Illinois Democrats, hear that roar?

Liberal Democrats in tiny Rhode Island did something truly astonishing last November.

That state, too, has an unfunded pension liability. Theirs is $7 billion, one of the largest per capita in the nation. Illinois' underfunded liability is $85 billion, one of the biggest outright in the nation. So what happened out East?

Rhode Island legislators addressed the problem head on, while Illinois legislators spent the past year avoiding our huge problem.

The Wall Street Journal reported liberal Democrats led the way last November. They followed the recommendations of a commission appointed to solve the problem and faced the fact that changing plans for future workers would not be enough. Illinois legislators have changed plans for future workers. More dramatic changes still are needed here urgently. Rhode Island, the Journal reported, suspended annual 3 percent cost-of-living increases until funds become solvent. Legislators also voted to raise the retirement age for most workers to 67 from 62. And, most significantly, they shifted all state workers to a hybrid pension plan that includes a defined-contribution component and a small annuity. And unions balked, as they have here. Here, many union members and Democrats believe such an overhaul is unconstitutional and a contract violation. But the liabilities cannot be ignored. When unions balked in Rhode Island, liberal Democrats voted for the changes anyway. Many of them. Despite threats of lawsuits, the Journal reported, 77 of the state's 94 Democrats voted for the changes anyway. That is bold. That is courage personified, times 77. That is leadership.

It's a new day. A new year. Can Illinois follow tiny Rhode Island's lead? Who will step toward solvency and financial responsibility?

Might some suburban Democrats start the move? House Republican Leader Tom Cross of Yorkville has developed a bill similar to Rhode Island's in that it creates a three-tiered system that would be applied to all state workers. Last spring, Cross said he believed he had the support of Democratic House Speaker Michael J. Madigan. Nothing developed then, and we know it's less likely to now in an election year.

Cross's plan would create a choice for workers who could put future earnings into a 401(k)-style fund, take smaller benefits without paying more in, or keep the same benefit rate if they choose to contribute more themselves. It would apply to future earnings and it gives state employees choices. It's a more than reasonable start toward a solution to a real crisis that will not disappear. Yes, it's an election year. It's also a new year and a great time to tackle the toughest challenges. Illinois Democrats, you could be courageous too. Why not join your peers in tiny Rhode Island?

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