Anyone who thinks Illinois would never shift billions of dollars in teacher retirement costs onto local school districts had better think again, state Sen. Kirk Dillard warns.
"The Democrats clearly control both chambers of the legislature," Dillard said. "When (House) Speaker (Michael) Madigan puts his mind to something, it would not be wise to bet your mortgage against him. There is a realistic threat that this may happen."
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Dillard's remarks about the controversial pension funding idea were made during a Daily Herald endorsement interview.
The Hinsdale Republican is seeking his party's nomination in the March 20 primary. Dillard's GOP opponent is state Rep. Chris Nybo of Elmhurst, who also wants to represent the redrawn 24th Senate District, which comprises parts of Elmhurst, Oak Brook, Lombard and Glen Ellyn.
Dillard, who narrowly lost the Republican nomination for governor in 2010, insists that he has the knowledge and experience to stop the Democrats from shoving "the responsibility for teachers' pensions off onto suburban property taxpayers."
Madigan has said there is a need to evaluate Illinois' practice of funding pensions for local teachers and university employees. Gov. Pat Quinn's budget office earlier this month said that it's weighing the idea of shifting pension costs to local government.
And last year, Senate President John Cullerton suggested a similar proposal, where local school districts would pick up the costs of a teacher's future pensions, with increased costs to schools being phased in over time.
Dillard said such an idea could gain traction in Springfield because Chicago schools already handle their pension costs locally.
"Chicago's teacher pensions are funded different from ours," Dillard said. "And downstate doesn't have nearly the real estate tax burden that somebody in Downers Grove or Elmhurst face. So even if the concept were to be sound, it's a bad deal for the suburbs. Because the suburbs are going to bear more of the burden than the rest of Illinois."
According to Dillard, there are estimates that suburban property tax bills could increase by as much as 14 percent if the "bad idea" becomes a reality.
That's possible because the state-imposed property tax cap could be waived to help districts meet their pension obligations, he said.
While Nybo opposes shifting the burden entirely to suburban schools, he said there is "merit" to the point that part of the pension problem is caused by school districts negotiating "too lenient" pension provisions into their teachers contracts.
"It's our local school districts that are putting us into this situation," he said.
Dillard concedes that something must be done to discourage school boards from signing contracts that include big pay raises to boost pensions. However, he doesn't want a solution that punishes property taxpayers.
Meanwhile, Nybo said state lawmakers have shirked their responsibility on the pension issue for far too long and that Illinois' existing pension system is simply unsustainable.
"We can't just keep throwing up our arms and saying, "Well, we can't do this because it hurts these people or this group," Nybo said. "Somebody's got to propose bold action. I am willing to be bold on pension reform."
He said the pensions must be restructured so existing employees contribute more and benefits are paid out at more reasonable levels.
"If we don't do anything, we're just going to drive ourselves further into the ground."
The winner of the Republican primary will face A. Ghani of Oak Brook during the November general election. Ghani is running uncontested in the Democratic primary.