Legislature eyes pension changes; taxpayers, beware

If something sounds too good to be true, it probably is.

School boards across the state should have known the generous, pension-sweetening retirement deals they approved for retiring teachers were too good to be true.

And now, if the Legislature and governor carry through on suggested changes, local taxpayers could end up footing much more of the pension bill than school board members ever thought they would.

Many school boards have given 6 percent annual salary increases to senior teachers for 3 years before they retired. The perceived benefits were twofold: Entice veteran teachers to retire early so they could be replaced by younger, lower-salaried teachers; and boost retirees’ pensions, because payouts are determined on salary paid in a teacher’s final years.

For a while, it seemed to work.

That was before Illinois state government entered the land of perpetually imbalanced budgets.

That was before the state’s unpaid pension obligations to the Teachers’ Retirement System skyrocketed to more than $40 billion.

And that was before Illinois leaders, stung by a bad economy and poor decisions, began looking for ways to dig the state out of a very deep financial hole.

Democratic leaders in the Illinois General Assembly have hit upon an idea that might help them but would require local taxpayers to shell out more money.

Senate President John Cullerton, D-Chicago, started talking about it last year.

House Speaker Michael Madigan, D-Chicago, picked up the drumbeat last month.

The plan essentially is this: Since local teachers don’t work for the state, the state should not have to pay so much into their pensions.

Teachers work for local school districts, right? Well, then, according to the Cullerton-Madigan school of thought, let local taxpayers pick up the pension tab.

School districts haven’t had to pay a significant share of their state pension contributions for a long time. They pay less than 1 percent of teachers’ payroll into the Teachers’ Retirement System fund, while teachers themselves are responsible for paying 9.4 percent (which sometimes the school district picks up as a contractual benefit). And by “school districts,” we mean downstate and suburban districts. The Chicago school system has its own teacher retirement system that teachers and taxpayers finance mostly themselves.