WE MUST SOLVE ILLINOIS’ INSOLVENCY FOR OUR CHILDREN AND THEIRS

MADELEINE DOUBEK
AUG 7, 2014

Most of us like to give our children and grandchildren savings bonds or cash to invest and grow over time. We see it as helping to finance their futures.

In Illinois, we’re doing the opposite. We’re leaving our children and grandchildren a gargantuan bill for our short-sighted political expediency. Years of skipped state pension payments and meager recessionary returns mean that if the bill for all of Illinois’ debts came due today, every single one of us who pays taxes in Illinois would need to come up with $43,400.

That college fund for your child? Turn it over. Illinois isn’t paying its bills. It’s not providing enough to cover retirement security for the teachers, prison guards, state troopers and others who have been guaranteed a pension.

Confronting this crisis remains an absolute must for us all. Already, it is strangling our ability to devote more resources to better schools, smarter transportation options and healthier communities with homes near jobs and reliable public transit. Soon we will have no choice but to make severe cuts to basics including schools, roads and rail, and water infrastructure, hurting our communities now and for decades to come.

Where are the answers? What is a workable solution? The Metropolitan Planning Council will delve into this dilemma and our other great challenges as it hosts both governor candidates for a conversation at its annual luncheon at noon, Aug. 28, at the Fairmont Chicago Millennium Park. Register here.

That $43,400-per-taxpayer figure comes from the recently released 2013 State of the States report from the non-partisan government fiscal watchdog, Truth in Accounting, which found Illinois to have the second worst taxpayer burden of all 50 states. At more than $100 billion, Illinois owns the worst unfunded pension debt in the nation. The temporary income tax increase has helped pay down some of the overdue bills Illinois owes doctors, social workers, child care providers and others, but the state’s bill backlog still hovers near $5 billion most days.

After years of neglect, angst, argument and debate, a majority of legislators sought to salvage the state’s pension systems by approving Senate Bill 1, signed into law last year by Democratic Gov. Pat Quinn. That law would require slightly smaller employee contributions to pensions in exchange for raising retirement ages for younger employees, trimming compounded annual cost-of-living adjustments and capping the amount of salary upon which pensions would be based. Unions and retirees filed suit, citing the state constitution’s language that public pensions are a contract which shall not be “diminished or impaired.”

The Illinois Supreme Court decided 6-1, just before the Independence Day Holiday, that health coverage is part of that pension contract. The judges warned that the state constitution’s authors intended to protect the right to receive pension benefits without regard to the “adequacy of the funding to pay for them.”

Following that, a spokesman for AFSCME, one of the state’s major unions, indicated the organization’s leaders and others were not renegotiating, noting “there’s no room to continue discussions.”

No single challenge looms larger for our next governor than addressing Illinois’ insolvency. In three years, one-third of all state-generated revenue will be needed just to make the state’s annual pension payment. If no changes are made, by the last year of the next governor’s term, $7.47 billion will be needed from taxpayers just to make that year’s pension payment.

The insanity of Illinois’ insolvency must be stopped. For us, but most importantly for our children and their children. How? By changing the state constitution? By ending all future raises for public workers? By firing many or most long-term public workers and hiring younger, cheaper ones?

Join MPC Aug. 28 to find out what our next governor would do. And tune in throughout this campaign. Our children are counting on it.