Editorial: Nekritz/Cross bill is most promising pension plan
There is no momentum in Springfield to push pension reform over the finish line.
Today, years after the town criers began screaming about the state’s $98 billion pension debt, the prospects for a major cost-cutting bill remain dim.
Today, despite Illinois’ worst-of-all-states credit rating, little is happening.
And today, despite mounting evidence that funding for schools, social services and health care are suffering mightily due to the state’s inaction, legislators do nothing.
Excuse our French, but what the hell are they waiting for?
The answer, legislators, lies in rallying around a single plan to cut the state’s pension costs.
And we’ve found it: A pension bill introduced last week by Rep. Elaine Nekritz, a Democrat, and House Minority Leader Tom Cross, a Republican. It has 32 co-sponsors, including 21 Republicans. That is exactly the kind of bipartisan support the House speaker has said he must have to pass a bill.
The Nekritz/Cross bill is by far the most carefully crafted pension-cutting plan we’ve seen and, more important, promises to reduce costs by enough to be considered a real solution. Other plans may be kinder to public workers, but they don’t generate enough savings to save the state and its five public retirement systems.
This plan calls for raising retirement ages, eliminating cost-of-living increases after the first $25,000 of a pension and raising contribution amounts. But it’s done in a targeted and fair way.
Preserving the current COLAs on the first $25,000 of a pension, for example, means the lowest income retirees are protected. Likewise, a phased-in retirement spares anyone 45 years or older. And in exchange for some pain, the retirement systems can sue the state if it doesn’t pay its share, an age-old failure that has helped put the state in this deplorable state.
The bill includes a modified plan to shift the cost of paying for teacher pensions from the state to school districts, where it belongs. The shift would be phased in for pensions for new hires only, which should quiet some critics.
We have hesitated to endorse this plan, first proposed late last year. We worry it may violate a clause in the state Constitution that protects pension benefits. One possible way around that is giving employees a choice, a concept embraced by Senate President John Cullerton. His bill asks employees to accept a lesser benefit in exchange for retiree health care.
Facing resistance, Cullerton now proposes to pair his bill with Nekritz’s and essentially let the courts decide which is constitutional.
Truth be told, Cullerton’s bill, because it gives employees a choice, has a better chance of surviving the inevitable court challenge. We respect the strength of his argument, as well as his willingness to be flexible.
But if Cullerton’s bill prevails, it will not amount to a lasting solution. Nekritz’s bill would save $167 billion over 30 years, while Cullerton’s is estimated to save $66 to $88 billion. Also, there are no legal certainties. Nekritz’s bill could prevail in court.
The risk, then, that Nekritz’s bill will be shot down — and somewhat delay Illinois’ reckoning with this problem — is worth it to give Illinois the very best shot at solving this monstrous, all-consuming problem.
Half measures, even three-quarters measures, are not good enough.
Once legislators approve the Nekritz/Cross bill, the toughest vote will be behind them. If the courts later toss the law aside, it should be relatively easy for the Legislature to pass an alternative, invariably less painful, plan.
Today is the day to rally around the Nekritz/Cross plan. Today is the day to go for it.
If the courts say yes, Illinois has solved its most vexing financial problem once and for all.