Listen to cities on growing pension impact

Illinois has little trouble spending money it doesn't have, but it is downright enthusiastic about spending other people's money.

That largess without consequence, that total lack of accountability, is what has communities statewide up in arms and demanding a moratorium on future police and fire pension fund increases.

Municipalities are unhappy because they have to foot the bill for General Assembly decisions on pensions and, increasingly, they are having trouble keeping up with payments for those increasing benefits.

Despite pouring a higher percentage of local tax levies into pensions, the funding level of police pensions, for one example, has still declined from nearly 90 percent in 1999 to just more than 70 percent in 2007.

That means municipalities eventually will be faced with raising taxes or cutting services to pay for increasingly lush public sector benefits, something unlikely to be greeted enthusiastically by hard-pressed residents funding their own pensions and medical benefits.

As a result, the Illinois Municipal League, the Northwest Municipal Conference and other similar groups are seeking a temporary stop to pension fund increases, asking for a financial impact analysis before any future increases, and requesting that investment options similar to those granted the Illinois Municipal Retirement Fund be made available to them.

The legislature should support all three requests -- and more importantly, must quit caving in to every demand. The state is already obligated to pay 75 percent of pay to a firefighter after 30 years, for example. That means that he could retire, say, at 51 and get three-quarters' pay for doing nothing for the next 30 years, not a real plus in the cost/benefit analysis. And firefighters are out there asking for 80 percent this year. Others are asking for increases for those who retired before 1971.

There seems to be no end to the demands or the legislature's willingness to meet them at municipalities' and taxpayers' expense, easy enough to do if one doesn't have to deal with the long-term consequences. In fact, the system would be a lot healthier if those making the rules were the ones having to pay the freight.

Beyond that, though, the state should be moving to convert all its pensions away from the defined-benefit system, which private employers long ago determined was financially untenable, to a defined-contribution system, at least for new employees.

A moratorium to stop the bleeding and a change of system to eradicate the cause of a wound that never heals -- a lack of accountability -- are both required if municipalities and taxpayers are to survive the state's pension stewardship, a term used loosely when it comes to financial expertise or restraint in Springfield.