We need constitutional bargain on pensions

Many of us know that Illinois is facing a fiscal disaster due to giant pension liabilities. Pensions are generally funded at nearly 40 percent with estimated liabilities in the range of $130 billion to $250 billion. Without significant constitutional and legislative action, retired public employees and taxpayers are going to get hit hard in the coming years.

Imagine retired public employees dealing with payments delayed by 12 months as experienced by other creditors this year. While our 32 percent tax increase is painful now, imagine repeated years of similar increases and cuts to vital services, squeezed by legally mandated pension payments. If you think I am joking or totally misinformed, the Teachers' Retirement System's (TRS) actuarial firm has modeled scenarios with practical assumptions that indicate that TRS could be insolvent between 2036 and 2045. Something has to give.

I think it is time for our elected officials and citizens to pursue a grand constitutional bargain that provides flexibility to address the coming crisis. The bargain that I imagine revokes sections of the Illinois Constitution that prevent changes to pensions and that prevent enactment of an income tax that charges higher earners a higher rate. This is a change that needs to be bundled together. Democrats controlled by union bosses and Republicans with their fat cat funders will all scream at the same pitch. My hope is that they will also see the opportunity to negotiate viable solutions.

Without these changes, Illinois will not have the flexibility needed to mitigate the crisis that we can clearly see coming. It's going to take creativity and courage. Solutions will only become more difficult with continued delays.

Thad Smith

Grayslake