Real pension reform means structural change
The time for meaningful action on Illinois’ pension problem is now. The billions of dollars that saddle the state with a pension albatross cannot be solved by shifting the burden to school districts or to local governments. The problem requires structural change. That means several key suggestions by Gov. Pat Quinn deserve serious discussion and action.
The only way to stop the bleeding of our state’s coffers is to make changes that will have a long-term effect on the amount of money that has to be paid, not just changing who pays it. Raising the retirement age, increasing the amount that public employees pay toward their pensions, and limiting the annual automatic cost of living increase is the only way to begin to fix the pension problem.
These changes would not diminish or take away pension benefits that already have been earned and are protected by the state Constitution. No one wants to hurt those who have worked hard for their pensions. The employees and the public employee unions, however, need to understand that if real changes are not made, and made soon, there may not be a pot from which to pay their pensions, and checks may be delayed for months on end just as many vendors and governments have to wait for their payments today. That won’t be much help or comfort to retirees who need their monthly checks to make ends meet.
The concept of shifting who pays may reduce the amount that the state has to pay, but the shift to schools or local governments could have dire consequences. As a former school board member and former village trustee and mayor, I appreciate and understand the serious potential impact. At the municipal level, for years I saw increases in pension benefits adopted in Springfield, which led to millions of dollars that had to be paid by our municipal governments — leading to either tax increases, which no one likes to see, or significant cuts in local services.
To prospectively mitigate the impact on local real estate tax bills, the state must make those needed pension structural changes for police and fire and other municipal employees when they adopt them for other public employee pensions. Real reform requires application to all public pensions.
Likewise, if there were a major shift to our local schools of the current state pension obligations, the impact would be similar with either major program cuts and firing of teachers or large real estate tax bill increases — which at current levels already overburden local taxpayers.
If the legislature elects to shift some of the state’s pension burden it must be targeted and focused and fair. That would mean it should primarily be for pensions of newly hired teachers and employees so school districts can plan accordingly, and possibly for pensions of highly paid administrative personnel, which local schools boards directly control. Only such targeted shifts would be fair and limit the critical damage that could be done by any type of total shift of burden.
Failure to promptly implement structural changes to the pension systems would only mean that the problem will be augmented. We cannot afford to continue to kick the can down the road. Our legislators need to hear our voices and must know that it is simply not acceptable not to act before they go home.
Ÿ Elliott Hartstein is a former mayor and trustee of Buffalo Grove and a former school board member for Stevenson High School District 125 and Skokie Elementary District 69.