Dan Montgomery: Unions have ideas to fix pensions
By Dan Montgomery March 8, 2013 7:08PM
Updated: April 10, 2013 6:11AM
For too long, unions have been characterized as roadblocks to getting our state back on sound financial footing. Nothing can be further from the truth. Rather, we are actively suggesting solutions and want to avoid legislative action that would only result in legal battles and poor public policy.
We are not roadblocks. We are caregivers. We are emergency responders. We are public employees and teachers who do not receive Social Security. And despite having done nothing wrong, we are willing to accept some pain if it is part of a balanced plan, no matter how we got here.
But balance is nowhere to be found in Springfield. The current proposal — House Bill 3411 offered by Representatives Elaine Nekritz and Tom Cross — would take away more than 30 percent of our members’ life savings. Imagine the outrage if Congress proposed doing that to Social Security annuitants! This latest bill is unfair, unconstitutional and unproductive.
Public employees have faithfully contributed into the system from every paycheck, while politicians skipped payments, shirked their responsibility and ran up a debt that costs billions each year just to service. This unfairness bears repeating: We are where we are because Springfield borrowed more instead of paying the bill. And they used our pensions as collateral.
Secondly, the Nekritz-Cross proposal to resolve the pension problem is unconstitutional. As reason for their recent downgrade of Illinois’ bond rating, Standard and Poor’s warned that unconstitutional cuts would invite “legal challenges” and cause “several years” of uncertainty. Legislators took an oath of office to support the Constitution, yet many have said the courts should do their jobs for them. Passing an illegal bill to the courts is just passing the buck to taxpayers.
Lastly, the worst part of this proposal isn’t its injustice or surefire ticket to court. The worst part is that it only temporarily manages symptoms, but fails to treat the root cause. Because our state’s revenue remains flat while our expenses increase, we have an unsustainable structural deficit. And so to fund services such as education and public safety, lawmakers have used our retirements like a credit card and created a $98 billion debt, most of which are self-inflicted costs. Current benefit costs are a drop in the bucket compared to the state’s past-due bill. Slashing our pensions won’t fix the problem, because our pensions didn’t cause it.
We have a better plan. For the first time, labor unions have worked with lawmakers to draft legislation we believe is fair, constitutional and part of a balanced approach to get our fiscal house in order. House Bill 3162 and Senate Bill 2404 are identical, bipartisan bills that include three key components: an ironclad guarantee that the state will make its payments, a pension stabilization fund that dedicates revenue already in the budget to pay down the debt, and a willingness to contribute an additional 2 percent of our salaries — a genuine sharing of the sacrifice by teachers, nurses, firefighters and the like.
This is a starting point, not a panacea. Revenue must be part of the solution, because we can’t solve this with less money. We have suggested closing corporate tax loopholes as one option. And we must fix Illinois’ inherently unfair tax system.
Interestingly, many of the draconian provisions included in the Nekritz-Cross proposal were tested recently in a series of House amendments. None of them received more than five votes each. We appreciate lawmakers’ quickness to shoot down these trial balloons, and strongly urge their consistency when HB3411 is called for a vote.
Let’s not pass along a legally doomed bill to the courts. Let’s work together and negotiate an agreement that includes those who did nothing wrong, but stand to lose the most.
Dan Montgomery is president of the Illinois Federation of Teachers