Originally Posted Online: Oct. 02, 2012, 10:32 am
Last Updated: Oct. 02, 2012, 11:36 am
Jacobs: Understanding, addressing pension 'crisis'
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By Mike Jacobs
First off, let's have an honest discussion about the state's pension system.
The system is not "threatening to bankrupt" the state. Legally, that is impossible. States can't file for bankruptcy.
But claiming the retirements owed to teachers and public employees are causing financial ruin has turned out to be a great way for the media, corporate interests and many Republicans to scare people.
Truth is, in the mid-1990s, Republicans enacted a 50-year structured pension funding plan, which would have resolved the underfunding and skipped payments. However, after enacting what they called landmark reform, they punted full payments and went about spending money elsewhere. We have a pension funding plan -- the problem is paying for it. I think you need two steps to resolve the crisis.
First, make the full, legally required payment. I voted to do just that both this year and last. They're not easy votes. We're spending more on pensions than we are on public education.
But we have to make those payments because for years -- back to beginning of the system -- they were skipped.
In making payments, we are showing leadership that was lacking for much of our history. I will continue to make those tough votes.
Second, be fair to workers.
Here's the problem I have with so-called reforms: Workers and retirees have made their contributions -- the state has not. And now, after decades of paying their share, workers have to bear the brunt of reforms.
I don't think that's the right way to treat people, nor is it constitutional.
I think we should engage public employees and try to find a compromise. Before we jeopardize retirement security of someone who spent her life teaching children how to read, I suggest we try to strike a better balance on what exactly counts as reform.
Consider this: each year, the Comptroller's office publishes details on tax breaks, exemptions and loopholes and how much they cost taxpayers. The 243 tax breaks for corporations, organizations and individuals total $6.8 billion -- pretty close to how much we have to pay each year in pensions (http://www.ioc.state.il.us/index.cfm/resources/reports/tax-expenditure/).
Members of both sides of the aisle have said Illinois' tax code doesn't make sense.
It seems an opportune time to sit down, find what isn't working, close loopholes and redirect revenue to our pension system.
As for sticking local schools with the teacher pension costs, that is not something I support. It's just another shell game, not reform.
I also do not support reducing benefits for retired or current employees. My opposition is based in the legal protections spelled out in our Illinois Constitution that bluntly says: "Membership in any pension or retirement system of the State ... shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."
I believe in our state, our constitution, and our workers. We need to honor our commitments, pay our bills and engage our workforce to preserve fairness and respect.
Sen. Mike Jacobs, D-East Moline, represents Illinois Senate District 36.