Stakeholders debate state pension reform at Palatine forum
The panelists at times struggled to find common ground, and the deep divide between stakeholders on how to fix the pension funding crisis was painfully evident.
But a pension reform forum sponsored Wednesday by the Daily Herald and the nonpartisan reform website Reboot Illinois did produce civil discourse in the organizations' attempt to further understanding of the $100 billion mess and, hopefully, prompt meaningful steps toward a solution.
Reboot Illinois Chief Operating Officer Madeleine Doubek didn't mince words when she set a serious, yet hopeful, tone for the evening.
"Our pension problem is real," said Doubek, who moderated the event with Daily Herald Political Editor Kerry Lester. "It is the worst in the nation. And it drags down our school funding for our children, our transportation system and our jobs and economic climate.
"If we don't do anything, we face the very real prospect that our teachers and other public employees will have no retirement income in another 30 years."
Addressing about 250 community members -- a majority of them public employees -- in a packed Harper College auditorium in Palatine, state Reps. Elaine Nekritz and Tom Morrison and Illinois Education Association President Cinda Klickna agreed that the time has passed for pinning blame on any one person or any group.
They instead largely focused on their very different visions for reform.
Klickna began by pointing out that the IEA, which represents 133,000 members, recognized the pension funding problem dating back to at least 1980.
She said she believes there are constitutionally acceptable solutions provided employees have a choice. But Klickna warned that moving teachers away from defined benefits to defined contributions such as a 401(k) type of plan would actually cost the state more because it would lose their current 9.4 percent salary contribution.
Klickna, who has proposed having members pay 2 percent more of their salaries toward retirement, also focused on the need to consider extending the 67 percent income tax increase and switching to a graduated system.
"When you have a state that is bottom in education and pension funding, maybe it's time to look at revenue," Klickna said.
Morrison, a Palatine Republican, agreed that the state has a revenue problem, but only from the standpoint that Illinois needs more taxpayers, not a higher tax rate.
Focusing largely on teachers' pensions because their retirement system is about double the size of the other four systems combined, Morrison said benefits have grown dramatically more than contributions have risen. He largely attributed that to the 3 percent compounded cost-of-living increase in place.
He also cited data that between 2001 and 2010, taxpayers paid $15.7 billion toward pensions compared to $7.8 billion in teacher contributions.
Morrison backs a plan that allows workers and retirees to keep the benefits they've already earned and moves new hires into defined contribution plans.
"We need more revenue, but it needs to be by getting more taxpayers and more businesses to invest here," Morrison said.
Nekritz, a Northbrook Democrat, said the state needs to use actuarial science and not "fuzzy Illinois pension math" that has led to the current crisis. A solution also needs to be affordable and include a funding guarantee, she said.
Nekritz said most government bodies mark 3 percent to 5 percent of budgets for pensions, while the state's allocation is in the high teens. She has crafted legislation that would cut teachers' and state workers' retirement benefits.
Nekritz disagreed with Klickna that increasing revenue is the key.
"I agree we need to be looking at revenue, but frankly, that's not going to be enough," Nekritz said. "One of the biggest cost drivers in our budget is the pension payment."
Doubek ultimately widened the scope of the question to include the community.
"I challenge each of us to think about what we'd give up to get to a solution," Doubek said.
Before the forum began, dozens of people attended a rally jointly held by Harper College's chapter of the American Federation of Teachers and the Northern Illinois Jobs with Justice. Showing solidarity by wearing red, they lauded the event and its goals but cautioned that state employees shouldn't be made into scapegoats.