Editorial: Amendment on ballot is not true pension reform
Editorials October 24, 2012 6:34PM
An AFSCME union member’s shirt tells the story at a rally against proposed pension legislation in May at the State Capitol in Springfield. | Seth Perlman~AP
Updated: November 26, 2012 7:13AM
If an Illinois school district wants to give its teachers 4 percent annual raises, that’s their choice.
As long as the district pays for the raises and, as importantly, the heavy pension costs that go along with them.
But under a proposed state constitutional amendment on the ballot Nov. 6 that affects pension benefits across Illinois, the state Legislature wants a hand in those salary decisions.
That’s a usurpation of local control and a violation of basic democratic principles, just one of many reasons why voters should say “No” to the proposed amendment.
On the surface, the amendment has great appeal. It raises the threshold for voting to increase pension benefits, moving from a simple majority to a three-fifths vote. This covers the state Legislature, pension boards and any local unit of government, including school districts.
For a state drowning under the weight of its $83 billion unfunded pension liability, that sounds like a lifeline.
But few people, including state legislators who voted for the amendment last May, think the constitutional change would make much of a difference. That’s because in the last 21 years, 15 of 17 votes to enhance pension benefits in the state Legislature — where benefit terms for state workers, firefighters, police and teachers are set — passed by at least a supermajority, according to the Illinois Association of School Boards.
The amendment, then, will likely do little to discourage legislators from supporting enhancements — though we’d like to think the current unfunded pension liability has cured them of the habit. If amnesia sets in after a few years, legislators could pass a law raising the vote threshold.
And, what’s worse, the amendment could cause more harm than it does good.
Here’s one way: The amendment attempts to shield regular employee salary increases from the three-fifths vote requirement. Its includes a clause, requested by the school board association, to that effect. But — and here’s the catch — the amendment leaves it up to the Legislature to define what’s an acceptable regular raise. That 4 percent raise, then, could easily be too high.
If the amendment passes, the Legislature will be dictating to school districts and municipalities. If it sets the salary bar too low, which is likely in the current climate, local districts and governments regularly will have to reach a supermajority to give larger raises.
The amendment also is harmful because it gives campaigning politicians cover. Almost every legislator voted in favor of the amendment last May, no doubt so they could tell voters that they helped tackle the state’s pension debt.
The real solution to the state’s pension debt — which is squeezing out spending on the most basic services, including schools and human services — is to cut pension costs for current employees and, unfortunately, retirees. This means reducing unaffordable annual cost-of-living increases for retirees and potentially raising the retirement age or employee contributions.
And, to address the very real problem of school districts handing out fat raises but blithely ignoring the pension costs that go with them because the state foots the bill, the pension reform package should shift those costs to the local school districts. That preserves local control but encourages districts to hold down pension costs.
The time to act is now. Legislators should pass pension reform in the fall veto session or, at the latest, in early January.
Voters should say no to the constitutional amendment and send the message that Illinois residents want real pension reform, not potentially harmful window dressing.