To some extent, you have to wonder what motivated state Sen. Lou Lang to propose extending the 2011 income tax increase as a centerpiece of his proposal to address the state’s employee-pension crisis. Was it political courage raising an uncomfortable truth? Or something else altogether, a small crack in the door, perhaps, for making permanent a tax increase that, from the day they approved it, government leaders have repeatedly insisted would be temporary. In Illinois, no one could be faulted for assuming the latter.
So, let’s be clear and quick to react to this particular approach. It cannot be permitted.
The issue, however, is not taxes or pensions. The issue is credibility. Illinois’ pension problem is not just about the numbers, as frightening as they are. Almost as important, it is also about trust.
Lawmakers promised they would make annual payments into the pension system. When it was inconvenient to do that, they withheld the payments. Lawmakers promised they wouldn’t borrow money to make the payments. When circumstances grew dire, they jumped into borrowing with both feet — to the point that the state is now paying $17 million a day just in interest on the debt. Lawmakers promised that, with the 67 percent state income tax increase, they would catch up on paying the state’s backlog of bills. Two years later, state Comptroller Judy Baar Topinka reports that the backlog now approaches $7.5 billion. In other important arenas, lawmakers promised that lottery funds would be a supplementary boost for education. They promised that gambling would just be a small entertainment industry limited to a few nostalgic riverboat venues in struggling communities.
Politicians have always had a reputation for duplicity. Illinois politicians have turned it into high art. That’s not a good place to begin when asking for the sacrifices that will be needed to solve a sensitive and complicated problem.
As it relates to pensions, the government is going to have to break some more promises and make some new ones. It is going to have to address, for example, the 3 percent compounded cost of living adjustment guaranteed for retirees. It is going to have to address health care costs and retirement age. In turn, it is going to have to lay out a workable system for meeting its new pension promises and commit to it.
The centerpiece of any such solution will be trust, and that cannot be gained by turning the government’s back on the most emphatic, controversial and categorical of all the state’s pledges — that the 67 percent increase in the state income tax would be a temporary measure, phased out in 2015.
“This is not a game, not a trick,” state Senate President John Cullerton, a Chicago Democrat, said when the tax increase was approved.
Yet that remains to be seen. However well meaning or courageous Lang may be may be, proposals like the Skokie Democrat’s only inspire cynicism.
In his own acknowledgment of the uncomfortable truth about the Illinois budget — that eliminating the income tax increase will mean something near $7 billion in lost revenues for a state that already is having trouble cutting its spending to a manageable level — Cullerton has emphasized that the issue should remain closed until the 2014 election campaign, when candidates can be held accountable for their positions on the tax increase. That is the least Illinois voters should expect.
In the meantime, a solution to the pension crisis cannot wait. Plenty of proposals have emerged that don’t require the state to go back on its word to taxpayers that the 2011 income tax increase would be temporary. Those are where our attention has to remain focused if state leaders are to rebuild any semblance of trust with the state’s citizens.Copyright © 2013 Paddock Publications, Inc. All rights reserved.