Editorial: Something to talk about on pensions -- but just a start
For years, Illinois House Republican Leader Tom Cross has emphasized the importance of requiring all parties to the Illinois pension crisis to have some "skin in the game." On Monday, Senate President John Cullerton, a Chicago Democrat, offered the first union-backed proposal to include some "skin" from public employees and that's an encouraging start. But the ultimate solution requires much more.
Now with two legitimate plans on the table, it is at least notable that we've finally come to a meaningful point of discussion. Yet, as it stands, the discussion seems to come down to a choice between savings of $150 billion-plus at a risk of having to start over in a couple of years if the courts don't like it — the plan approved by the House last week — or settling for savings of $45 billion-plus and hopefully declaring the problem solved — the Cullerton plan likely to pass the Senate this week.
The key new ingredient in Cullerton's proposal is an attempt to address the compounded cost-of-living provision that has been a major contributor to the crippling of Illinois' public pension system. Cullerton provides options that would let Tier 1 employees — those older workers and retirees not affected by the significant reforms enacted a year ago affecting new employees — keep the 3 percent compounded COLA if they accept certain other benefit concessions or move to a simple-interest COLA and maintain other benefits.
Without this provision, there would be essentially nothing to discuss, but even with it, the prospects seem dim for a plan that saves tens of billions of dollars, as substantial as that sounds, to address a problem in the scores of billions. And the net effect of that substantial shortfall will inevitably land at the doorstep of the taxpayer, who, it must be repeated, has been as unfairly and as brutally treated in all this as any other party.
Cullerton, not unreasonably, has always sought a solution with the least possible offense to the state constitution, and he and the unions emphasize that strength in this plan. Yet, union support and promises notwithstanding, there is nothing to stop any unhappy member or group from taking even this proposal to court.
Illinois' grossly underfunded pension system faces a $100 billion debt, mounting at a rate estimated to be as much as $17 million a day. Servicing that debt is siphoning billions of dollars a year away from other pressing state needs, not to mention the exponentially increasing problems just to keep the system solvent.
Thankfully, the unions and President Cullerton at least have contributed to the foundation for a discussion of legitimate alternatives, but truth be told, they've been dragged kicking and screaming to this point on the swell of public and legislative forces that recognize the need for a dramatic and comprehensive solution. The House plan makes a measurable and stabilizing impact on the state's deteriorating financial picture. Even under the best of early estimates, the Senate plan does not have anywhere near that profound effect.
At last offering some "skin" in the very serious business of public pensions, unions have provided something worth talking about. But, if their approach is to be practical, there is still much more talking to do.
- Share Facebook Twitter
Article sent to (required)E-mail
Article sent from (required)E-mail Name
Subject Line (article title)
Message (optional)Success - Article sent Click to close
Interested in reusing this article?Need more information about reprints? Visit our Reprints Section for more details.
Contact information ( * required )Name * Company Telephone * E-mail *
Article InformationTitle URL
Message (optional)Success - Reprint request sent Click to close