IHSA finances, pensions to be focus of lawmakers' hearing
BY CHRIS FUSCO AND MICHAEL O’BRIEN Staff Reporters May 19, 2014 5:52PM
IHSA executive director Marty Hickman. | Sun-Times file photo
Updated: June 23, 2014 12:10PM
Pension payouts: $590,911.
Legal and audit expenses: $147,140.
Income from sponsors and royalties: $647,633.
Profits from games broadcast on TV, radio and the Internet: $66,095.
All of the above are part of the Illinois High School Association’s most recent audit filed with Illinois attorney general, covering the 2012-2013 school year.
But because the high school sports governing body is a private, not-for-profit organization, it doesn’t need to report anything more about its legal fees, pension costs or the terms of its sponsorship and television deals.
Critics say the IHSA should reveal those and other details about the nearly $11 million it takes in and spends each year because more than 80 percent of its 800-plus member schools are taxpayer-funded public high schools.
“They are profiting off the taxpayers,” says state Rep. Linda Chapa LaVia, D-Aurora, who last month sponsored a House resolution to hold legislative hearings on how the IHSA operates.
The Illinois Press Association, of which the Chicago Sun-Times is a member, and Illinois Broadcasters Association strongly supported Chapa LaVia’s push for IHSA hearings. The first is set for 10 a.m. Tuesday in Springfield; no others have been scheduled.
Her resolution, which passed 55-51, calls on lawmakers to explore “the feasibility of statutorily transferring the duties and functions of the IHSA to the Illinois State Board of Education,” among other things.
The IHSA, which has been overseeing high school activities since 1900, sees no reason for any such change. More than 50 school officials — including superintendents, principals and athletic directors — are expected to be at Tuesday’s hearing to support Executive Director Marty Hickman, his 24-member staff and the association’s 10-member board of school principals.
“When it comes to issues like transparency, who better to speak to that than the individuals we work with from our schools,” Hickman says. The association reports paying hundreds of high schools more than $2.7 million last year to host athletic events and academic competitions. But it doesn’t release terms of sponsorship deals and other contracts, such as the one that will change the IHSA’s ball provider from Baden Sports to Wilson Sporting Goods next school year.
“Some of our contracts contain specific language that prevents the disclosure of the contract’s terms,” IHSA spokesman Matt Troha says. “In addition, our board has taken the position that we will not disclose the specifics of our contracts with sponsors.”
Similarly, the board “has determined we will not release the names of former employees who are receiving a pension” — or disclose how the $590,911 in pension benefits last school year ended up getting divvied up.
When pressed, Troha would acknowledge only that “there are currently 17 individuals receiving pensions from the IHSA.”
About six years ago, the association switched employees to a 401(k) plan because its pension plan — modeled after the state Teachers’ Retirement System — had become too great a financial burden to keep extending to its 25 full-time employees.
“Defined-benefit [pension] plans are extremely expensive. It’s similar to what the state is dealing with” in terms of skyrocketing pension costs for government workers, says Hickman, the IHSA executive director. “We recognized several years ago that continuing to provide a defined-benefit plan was going to become very cumbersome.”
Employees who were in the plan had their years of service capped as of July 1, 2008. Still, the association paid $425,000 into its $8.7 million pension fund last school year — and expects to pay out more than $7 million in pension benefits between this school year and 2023, records show.
By contrast, the IHSA contributed a total of $98,532 toward 401(k) benefits for its employees last school year.
Despite the association’s steps to address the issue, Chapa LaVia still worries it could hurt the IHSA long-term. “Are they just getting sponsorships to cover the nut of their pension?” she asks.
Besides pensions, the IHSA’s tab for “salaries, other compensation [and] employee benefits” totaled nearly $3.1 million for the last school year, 2012-2013 — up 21 percent over the previous year, IRS records show.
IHSA officials have yet to fully explain that increase, saying Monday that salaries increased only 8 percent in that time.
The issue is among several Chapa LaVia plans to raise at Tuesday’s hearing. “There’s a lot of legislators who’ve had a lot questions,” she says.