No one ever said getting the pension issues inline with Illinois’ budget would be easy. The Illinois General Assembly failed to act at the special session Friday on the matter of the pension debt that is estimated to be anywhere from $80 to $90 billion. The issue is not likely to be acted on again until after the general election. The cost to taxpayers for the session was $40,000.
The only vote taken was in the House on Legislators curbing their own pensions. That measure received 54 yes votes, 53 votes opposed, and six votes short of passage.
Gov. Pat Quinn, who called for the special session in July, blamed Republican leadership.
“Each day we wait to enact comprehensive pension reform, the problem gets worse,” Quinn said in a statement. “The unfunded liability will grow to more than $92 billion by the end of next fiscal year. Illinois is currently on track to spend more on pensions than education by 2016 and that is unacceptable.”
Republicans said inaction was Speaker Mike Madigan’s fault. Madigan proposed gradually shifting the costs of teacher’s pensions to individual school districts.
Pat Brady, the Chairman of the Illinois GOP, said the underlying system needed to change before the payment mechanism was changed.
“The Republicans are protecting suburban homeowners from a huge tax increase,” Brady said. “I don’t think anybody thinks Chicago doesn’t get enough money from the state.”
Local representatives dismayed
Among local representatives, there was dismay.
“I was not expecting a lot,” said State Rep. Elaine Nekritz (D-Northbrook), Chairwoman of the House Personnel and Pensions Committee and House appointee on Governor’s Pension working group.
“To address a problem of this magnitude in one day seemed overly optimistic,” Nekritz said.
Nekritz said she was disappointed the measure that asked lawmakers to make a choice to take a lower cost of living adjustment or give up their retiree health care and any increases in pension income did not pass. Of the state’s five retirement systems, that was the smallest. Modifying that pension plan would do little to ease the situation, but Nekritz contended it was still an important first step.
“No one thought that would have solved the problem, but if you can’t even lead by example, then we send a bad message to the other systems about the ability to get this done,” she said. “So that is what was frustrating.”
Rep. Lou Lang (D- Skokie) said the effort was doomed from the start.
“We were first called down there to deal with the Derrick Smith matter and not pensions,” Lang said. “It was the governor that tried to force a pension resolution on a Friday when it was 85 degrees out in the middle of the afternoon; that is not a recipe for accomplishing of value.”
The special session occurred less than 24 hours after with citizens to discuss the problem.
Louis Kosiba, the Executive Director of the Illinois Municipal Retirement Fund, Dick Ingram of the Teachers Retirement System and Erika Lindley of the Education Research Development which represents more than 80 suburban school districts, took an overflow crowd through the dynamics of the pension system in the state.
Biss said he believed the years of skipped pension payments and other machinations in Springfield were at the heart of the issue.
“The State of Illinois has not been a trustworthy actor for a very long time; that stinks,” Biss said. “We lied and we lied and we lied. What did we lie about? We lied about how much stuff costs.”
Something will be done eventually and it will have to be done within the confines of the State Constitution drafted in 1970, which guaranteed pension rights, but not the funding.
Kosiba said in the case of pension funding, borrowing can’t be done from future generations as other entitlements.”
“The important thing about a government defined benefit pension like IMRF or TRS is we are trying to prefund those benefits so that when a person retires neither the employer nor the taxpayer nor the member are obligated to pay any more money to fund that benefit,” Kosiba said. “We are not like Social Security which is pay as you go. That is the promise of Social Security; the active workforce will pay for the people who retired.”
Lindley, whose school advocacy organization represents 80 districts in the northern suburbs, said there will be pain involved, but there are already people hurting by the status quo.
“We recognize this is going to impact the livelihood of hundreds of thousands of people and we are also facing a situation that is crushing the state,” Lindley said. “We are also facing a fiscal situation that is crushing the state. The pension obligation is at a point where we can’t spend money on k-12 education, higher education and public safety. In fact we are seeing reductions in all those areas.”
What residents say
The attendees of the forum at Temple Beth Israel became more informed about the problems.
Jo Sawyer, a retired communications consultant from Wilmette, said, “The fact that school districts don’t have to pay anything is unbelievable.”
Joan O’ Malley, a retired school administrator from Glenview said he would like to see Springfield tax corporations and stop giving out unnecessary benefits.
“That is on the backs of the citizens,” O’Malley said.
Marcia Krohn, a retired teacher from Northfield and Illinois Municipal Retirement Fund member, said she did not believe her personal financial future was in danger. She said she was focused on the long-view.
“I’m worried about the state and there won’t be any money,” Krohn said.
What lawmakers will do to address the pension issue remains unclear, while the timing in which something will likely change appears to be at a standstill until voters head to the polls in November.
“We have to address this problem,” Nekritz added. “I just don’t know when.”