I sent a letter to our state senators and representatives regarding the impasse in resolving our public employee pension fiasco. Despite the exceedingly dire financial circumstances confronting our state, the prevailing sentiment in the Statehouse continues to reflect complacency and inertia when so much needs to be done.
Despite the nearly $100 billion pension debt obligation that Illinois taxpayers face, it appears any sense of urgency to resolve this matter has greatly diminished. Restoring the state’s fiscal integrity is the single most important issue before the 98th General Assembly.
Our elected officials know something must be done. More important, their constituents know something must be done. Failure to resolve the public pension crisis has become a specter overshadowing all other major public policy and spending issues.
Employers, business owners, investors, and financial decision makers tell me their disappointment and frustrations with the state’s inability to adequately deal with fiscal challenges continue to influence their investment and hiring decisions. Business leaders want a well-defined, multiyear financial plan that guarantees resolution and [puts the state] on course to solvency. Without that, they’re reluctant to make business plans that include Illinois.
Unaddressed financial obligations suppress the very economic activity that would generate greater tax revenues for Illinois. The vicious cycle of deficit spending and poor credit ratings must be broken.
The Illinois Chamber supports and applauds the bipartisan effort organized by Sen. Daniel Biss and Rep. Elaine Nekritz, who set a reduction target in excess of $30 billion. Our desire is to see the Legislature approve legislation similar in scope. Hard choices are painful for recipients to bear and almost universally unpopular, but [it would be] worse to adopt an inadequate solution that proves insufficient.
However, not acting will make matters only worse for everyone. Any pension law changes will land before the Supreme Court for resolution. Yet, the Supreme Court cannot rule until the General Assembly acts.
Private-sector employers have confronted and addressed similar pension issues for decades. Accounting standards made it clear that yesterday’s retirement plans are unsustainable. Private sector employers and their employee unions have restructured pension and health care plans to ensure survival – and have moved on.
Key elements to pension cost reduction are well known. Find the political will to create a majority and demonstrate the courage to reverse our state’s current dire circumstances, which include:
n A pension debt load of almost $100 billion, growing by nearly $2 million a day.
n Retiree funds [that] may well reach insolvency, without changes.
n An Illinois pension funding ratio of only 45 percent, the lowest among the states and woefully short of the recommended 80 percent level.
How does one seriously dispute that unprecedented and drastic measures aren’t required? I urge our lawmakers to be undaunted in fulfilling their duty as the stewards of the state.
On behalf of the members of the Illinois Chamber of Commerce and millions of Illinois citizens who understand financial discipline must be restored, we urge the Legislature to take the necessary votes to restore the state’s fiscal integrity and trust they are up to the task.
Note to readers – Doug Whitley is president and CEO of the Illinois Chamber of Commerce.