Spirited crowd talks pension reform in Arlington Heights

The director of Americans for Prosperity's state chapter said Thursday that he doesn't often quote Pat Quinn in a positive light, but he'll gladly relay the governor's calculation of what the legislature's inaction is costing Illinois taxpayers.

“It costs our state $12.6 million a day every day that we don't reform pensions, and yet our legislators broke for summer break,” David From said. “They're on summer vacation.”

That's how From, of the conservative national grass-roots organization, started a town-hall meeting before a spirited crowd of more than 50 people gathered at Arlington Heights village hall, the second in a series of scheduled sessions.

Together with Brian Costin, the Illinois Policy Institute's director of government reform, and state Sen. Matt Murphy and state Rep. Tom Morrison, both Palatine Republicans, the group set out to discuss the current pension crisis, possible solutions and the importance of acting quickly.

Costin first painted an even bleaker picture when he said that any solution focused exclusively on the state's $83 billion unfunded pension liability ignores a much larger crisis. The total debt for state and local retirement benefits, Costin said, is actually $203 billion, which takes into account state and local pensions, pension bonds and retiree health benefits. That's almost $43,000 of debt for every household in Illinois, which already has the country's lowest bond rating, according to Moody's.

Costin said the solution is to transition to a defined contribution system and reduce cost-of-living increases for all retirees from 3 percent increases to half the rate of inflation. He also wants retirees to cover a majority of their health insurance costs.

There was some disagreement over a proposal to shift future pension expenses onto local schools.

Costin said the Illinois Policy Institute could support schools paying for pensions because it would foster local accountability and account for just 3.7 percent of a school's budget. Murphy thinks the suburbs bear a big enough burden already.

“This thing's gotta get solved,” Murphy said. “I may not love the bill that comes to pass. It may not be the one I'd draft if I was king for a day, but my sincere hope and expectation ... is hopefully by next January we have a real conversation and a real bill.”