Find the right pressure point on pensions

  • Illinois Gov. Bruce Rauner speaks to students at the University of Chicago Booth School of Business in Chicago earlier this year about his priorities for his first year in office, including teacher pension reform.

    Illinois Gov. Bruce Rauner speaks to students at the University of Chicago Booth School of Business in Chicago earlier this year about his priorities for his first year in office, including teacher pension reform. Associated Press File Photo

 
The Daily Herald Editorial Board
Updated 4/28/2015 7:57 PM

Beginning in 2005, taxpayers in many suburban school districts have gotten a triple whammy.

They paid for annual raises that often reached double digits for administrators and teachers in their last few years before retirement. Then they paid for the pension boosts that were the sole purpose of those end-of-career pay bumps.

                                                                                                                                                                                                                       
 

Then they paid for penalties the school districts owed the state Teachers' Retirement System for giving raises above 6 percent, the threshold set in the 2005 law intended to curb such extravagant spending. In at least one school district, Schaumburg Township Elementary District 54, taxpayers got a fourth whammy -- at least $33,000 in legal fees while the school district fought the charges. District 54 lost its case in 2013.

As the Daily Herald in story after story tallied the penalties incurred every year, the amounts gradually started coming down. But suburban taxpayers have covered millions of dollars in penalties to TRS over the past decade.

Daily Herald Political Editor Mike Riopell pointed out in a story earlier this month that 10 suburban school districts in 2013-14 paid more than $20,000 each in penalties. The two at the pinnacle were Community Unit District 300 based in Algonquin at $194,171 and East Aurora School District 131 at $177,121.

But that compares to 10 school districts that paid more than $100,000 each in penalties for the combined 2009-10 and 2010-11 school years.

Some suburban school districts have gotten the message and whittled the annual penalty payments over the years to zero or close to it. We congratulate them. Others at least are forced to explain the penalty payments, as District 300 did this year when it cited a now-expired teacher contract that gave extra pay to teachers in classes above a certain number of students.

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Now there's a proposal to change the law.

Republican Gov. Bruce Rauner proposes abandoning the 6 percent threshold. Instead, he wants school districts to pay penalties for raises that are higher than the Consumer Price Index, a measure of inflation.

We can't endorse that plan because a threshold that varies each year is unfair to school districts that negotiate multiyear contracts with employees. School boards wouldn't be able to predict whether they would incur penalties. And with the CPI so low, about 1.5 percent last year, school districts would face penalties on behalf of countless employees who get stipends for things like coaching or managing extracurricular programs.

We understand and agree with the message the governor is trying to send. The problem is that his solution is unrealistically harsh. Somewhere between 1.5 percent and 6 percent is a figure that acknowledges the successes many districts already have made, yet will continue to get other school districts' attention without impeding their ability to plan or to provide fair compensation for employees. Rauner and the legislature should seek that middle ground.

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