Illinois’ pension mess at jumping off point
So, you’re sitting around a tavern for a few hours with an acquaintance who has done you some favors over the years.
Because you have knocked down a few drinks, and you feel invincible, you tell the guy you appreciate what he has done for you. You say you’re “willing to do anything” to show your gratitude.
He chuckles, because he has a few under his belt, too.
Anything?” he asks.
“Anything,” you affirm.
“OK,” he says. “Jump out of my bathroom window.”
You both break into uncontrolled, bar-pounding laughter, nearly falling off your stools.
Under those circumstance, such things are really funny.
Only later do you find out he lives in a 22nd story condo.
But, hey, a promise is a promise.
THAT CAN BE THE only explanation for how the Illinois Legislature chose to express its appreciation for the political favors (money, endorsements, votes) it had received from the state’s public employee unions.
Those legislators had to be at least a little tipsy when they set up (and enhanced) the generous retirement benefits for teachers, state workers and others: a constitutionally protected fixed pension that is exempt from state taxes; a fixed automatic annual benefit increase that has no tie to reality; a laughably early retirement option; and, in some cases, an end-of-career salary sweetener that falsely inflates the monthly pension check.
They could not possibly have known what they were agreeing to do.
Or, maybe, they were so incredibly bad at math, and ignorant of history, that they thought it would work.
Either way, it’s about time for the state to take that 22-story plunge.
And everybody is going to get hurt.
WHEN THIS EDITOR moved to Illinois almost 10 years ago, he noticed a strange practice of local school boards that he hadn’t seen in 30 years of newspaper work in Indiana.
As public school teachers and administrators in Illinois neared retirement – some in their early 50s – they were being granted exaggerated yearly pay increases for the sole purpose of boosting their pension payout.
Somehow, that didn’t seem strange to reporters and editors who had worked in Illinois for years. After all, they had always done it that way.
Why couldn’t they see that system could eventually bankrupt local schools, this editor wondered. Didn’t anybody do the math?
He didn’t know then – and his colleagues seemed oblivious to it – that local school boards didn’t have to worry about paying those pensions. That was an obligation of the state.
Which, as we know now, means local schools won’t go broke.
But the state will – in fact, it already has.
So, what are we going to do about it?
FOR SOME REASON, Illinois House Speaker Michael Madigan seems as if he would rather take a leap from 22 stories than reform the pension program – or address the budget crisis, for that matter.
He has resisted reform efforts for years – not because he doesn’t think it needs to be done, but because he doesn’t want his Democratic Party to suffer the inevitable political fallout from the pain that reform, and inevitable state spending reductions, will cause to voters throughout Illinois.
Republicans have been reluctant to propose their own plan for fear that Madigan will pass it and pin the blame on them.
This game of “chicken” – some might call it “coward” – is doing nothing but adding millions of dollars a day to the state’s already massive debt.
The state’s bond rating was reduced (again) last week because of the Legislature’s unwillingness to deal with its fiscal crisis.
Not coincidentally, the last time the bond rating improved was immediately after the General Assembly took some positive action: a 67 percent increase in the state income tax 2 years ago.
But that singular attempt to generate revenue was not accompanied by a plan to curb spending or mitigate the mushrooming liability in the state pension program.
And the economy has not rebounded fast enough to give state income a boost that might buy legislators more time before they must take decisive action.
How much longer do they think they can wait?
THOSE THOUGHTS had swirled around the editor’s head for weeks when he received a hand-written note this week from David Murray, a Sterling lawyer and active citizen for more than 50 years.
The note was paper-clipped to a copy of a three-page letter that Murray had written to House Speaker Madigan. Copies were sent to this newspaper and the Chicago Tribune.
In the letter, Murray explained why he and his wife had recently left their home state to take up residence in Florida – even though “I loved and will always love Illinois and expected to retire and die in Illinois.”
“Unfortunately, Mr. Speaker, you and your Democrat[ic] Party trashed Illinois so badly that we finally decided to leave,” Murray wrote in the letter, dated Jan. 21. “You personally must take responsibility for nearly all legislation that has passed the [Illinois] House for the past 30 years and full responsibility for all that passed in the last 20 years.
“You personally have directly controlled all of the legislation. Unfortunately, in your desire to fill the Democrat[ic] coffers with union ‘contributions’ you have created a financial morass of unfunded pension obligations, unpaid state bills and underfunded public education. You can’t assign the blame to anyone else.”
MURRAY SUGGESTED the state’s pension problem could be solved by taxing state pensions.
“A graduated tax based on the size of the pension would not only address the unfairness of grossly bloated pensions but would provide the State with funds to continue the system,” he wrote.
“... You created or at least approved the pension problem, so why are you so hesitant to solve it? Are you afraid of your union ‘friends’? Instead you choose to duck the decision to do the right thing.”
Murray’s letter said he learned at the Bureau of Motor Vehicles in Florida that the biggest migration of new residents there comes from New York and Illinois. Many of them, he said, are retired public employees who “retire at 55 to 60 years of age and enjoy their substantial pensions for the rest of their long lives. ...”
“They would appreciate nothing more than having Illinois solve its pension problems by levying more income and real estate taxes on the poor working stiffs who remain in Illinois and aren’t members of public unions!”
Murray closed his letter to Madigan with this: “I’m now a happy Florida resident but a sad former Illinoisan.”
HIS HAND-WRITTEN note said he thought the editor might find the letter “interesting – and perhaps amusing.”
“I thought long and hard about writing this letter and becoming a Florida resident,” Murray’s note said. “But I’m glad I did both.”
We will miss you, Dave.
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