Editorial: Pressure builds to solve public pension crisis
If any state lawmakers think their success this session on pension consolidation gives them the opportunity to take a breather from pension reform, the numbers from the Illinois Teachers' Retirement System and four other state-funded retirement programs should shock them to life.
As our tax watchdog editor Jake Griffin reported last week, even an infusion of as much as $8.5 billion couldn't get the funds supporting retired state employees, university workers, judges, lawmakers and educators outside Chicago back on track.
In fact, the funds fell a total of $3.8 billion further in debt, pushing the funds to their highest combined total of unfunded liability ever, $137.3 billion. The governor and lawmakers are counting on expanded gambling, fee hikes and a possible shift to a graduated income tax to help address this long-standing crisis.
But that is hardly a strategy. First, it's unlikely that even a combination of all these factors will seriously improve the pension outlook.
Beyond that, though, it will be more than a year, at least, before we will have any idea of the impact of these factors -- and the transition to a graduated income tax, which is dependent on approval from voters 11 months from now, may not occur at all.
Even if it is approved and provides the generous revenues Democrats quixotically predict, the faucet won't start pouring out the extra money for at least two years. That's two more years of mounting pension debt that will have to be addressed.
All this returns us to the importance of solutions that have been discussed for years but never seriously undertaken -- significant spending reductions in other areas so that money can be diverted to pensions, study of whether the pension debt can be re-amortized and tackling a constitutional amendment that now ties the state's hands when it comes to modifying pensions to keep its funds solvent.
Jordan Abudayyeh, Gov. J.B. Pritzker's spokeswoman, told Griffin that the governor and lawmakers are conscious of the magnitude of the crisis and recognize there is still much work to do. It's worth noting that in spite of the flow of debt, the five pension systems have edged upward in funding capacity -- reaching just over 40% of full funding compared to 37.6% funding three years ago. And recent pension buyouts have helped improve the picture, though there haven't been as many as officials had hoped
Still, as Griffin's reporting shows, the problem is relentless, and lawmakers need to be just as persistent in attacking it.
Abudayyeh is correct when she says, "Illinois' challenges were created because of decades of failure, and it will take consistent effort to put the state on strong footing."
But the key phrase there is "consistent effort." Decades of past legislative timidity and inaction led us to where we are with the pension crisis. Unfortunately, current leaders have no room for delays or timidity. Wishful thinking and small successes won't get us where we need to go.
Leaders need to put dogged determination and tireless, sometimes courageous effort toward finding solutions that will.