Editorial: Lawmakers, make solving the pension crisis the top priority
Second in a series
Dear state legislators,
If there is one thing you accomplish in the next two years, let it be an answer to the runaway public pension mess that's been the albatross around Illinois' neck for a decade.
The pension debt -- one that compounds each year -- is the root of many of Illinois' problems in retaining, let alone building, its population and its business community.
Until you set us on a path to a solution to the crippling $250 billion in debt -- the worst in the nation compared to revenue -- the state can do whatever it dreams up to draw innovation and tech centers and we'll still end up with fewer Illinoisans, fewer new college graduates staying here to start their careers and a smaller tax base at the end of the year.
With every trip around the sun, this situation is dimming Illinois' future. We've gotten close to a solution before, but we can't be satisfied with trying once and failing. We need persistence, cooperation and everyone with skin in this game giving up something to create a solution we all can live with. Us-against-them thinking has no place in this process. In the end, we'll all be winners.
First and foremost, it's time to restructure the existing debt, stretching it out over a longer period while reducing annual payments.
Second, the constitution needs to be changed in two ways:
• To protect the benefits of people current working toward a pension while giving governments some flexibility to adapt to new ways of providing retirement plans for new hires.
A plan to allow for new hires to be moved into a 401(k)-style retirement plan was rejected by the state supreme court.
• To roll back 3-percent cost-of-living adjustments that, in the age of low inflation, amount to annual compounding raises. The constitution does not allow for that.
Chicago Mayor Rahm Emanuel recently backed a constitutional amendment for such a measure.
The COLAs were conceived during the creation of Illinois' latest Constitution in 1970, when inflation was nearly 6 percent. Today it's 2 percent.
Illinois Policy Institute research shows nearly 50 cents of every new property tax dollar in Illinois for the past 20 years has gone to pay for pensions. That's causing local governments to raise taxes to meet their obligations, and that's driving many Illinoisans out. When some municipalities spend more for police pensions than salaries of cops on duty, causing them to cut back on staffing, there is something very wrong.
Third, with legalization of recreational marijuana nearly a forgone conclusion during the 101st General Assembly, some of the taxes generated from that could, and should, help pay down the pension debt.
NEXT: Keeping the promise of redistricting reform