Editorial: It’s past time to cut state pension costs
Editorials December 26, 2012 6:28PM
Illinois Rep. Kelly Cassidy, D-Chicago, left, and Illinois Rep. Daniel Biss, D-Skokie, center, look on as Illinois Rep. Elaine Nekritz, D-Des Plaines, speaks with reporters while at the Illinois State Capitol Wednesday, Dec. 5, 2012, in Springfield, Ill. A group of lawmakers offer new legislation to fix the state's crippling pension crisis and end bitter fighting over a multibillion-dollar issue that gets more expensive by the day. (AP Photo/Seth Perlman)
Updated: January 28, 2013 3:44PM
State lawmakers return to Springfield in one week to do the most important work of their legislative careers.
We kid you not.
Their No. 1 job is to save the state of Illinois from collapsing under the weight of crushing pension debt, a bill so large it is crowding out spending for the most basic of state services, including schools, health care and social services.
The size of the debt — $95 billion — is so large it threatens the retirement of every teacher, university employee and state worker. There are no guarantees that the pension benefit a teacher counts on today will be there when she retires.
The Sun-Times’ Dave McKinney reported this week that there don’t appear to be enough votes yet to pull off a drastic pension overhaul. Also, leaders of the Senate and House have cut in half the number of days in the already-short session that ends Jan. 9.
That won’t do.
This is the moment. The election is over and the prep is done. It is past time to cut pension costs.
We see great promise in a recent proposal forwarded by Democratic Reps. Daniel Biss and Elaine Nekritz and backed by 19 other legislators, including two Republicans. Their support for the bill, which includes a gradual shift of costs for teacher pensions from the state to local school districts that the Republican leadership has strongly opposed, is significant. The cost shift is a key part of pension reform, though it should include extra financial help for the poorest school districts.
The new bill is the most nuanced pension cost-cutting blueprint we’ve seen, spreading the pain and trying to protect the lowest income retirees. The savings likely would be larger than those in a plan backed by the governor and the Democratic leadership, a scaled-back version of which passed the Senate in May. Also, the savings are more certain because employees have only one plan to choose from.
There’s one big problem. We’re not convinced the new bill is constitutional.
Because the state constitution prohibits the diminishment of benefits, any pension-cutting law will end up in court. Coming up with the best bet constitutionally is essential.
At the moment, that appears to be the bill backed by the Democratic leadership. It offers current and retired employees a choice, which appears to be critical in passing constitutional muster: Keep a generous cost-of-living increase in retirement or take retiree health care and pay raises that count as pensionable income. The last two benefits don’t appear to be protected by the state constitution.
The Biss/Nekritz bill also offers a choice: Accept reduced benefits in exchange for a new right — the ability to sue if the state fails to pay its share into the pension system. We’re strong proponents of that right, and want to see it in not a final package, but think it’s weaker legally.
We’d like to see a merging of the two plans — finding a way to make the Biss/Nekritz include a more constitutionally palatable choice. We like how it retains a generous cost-of-living increase for the first $25,000 of a pension but scales it back after that. We like how it caps pensionable income so high salary employees can’t reap huge pensions. Alternatively, both bills could pass and the courts could have the final say.
Senate President John Cullerton told us Wednesday that he wants the House to vote on the bill passed by his chamber in May, which doesn’t cover teachers and university workers. They were left out because of Republican opposition to the cost-shift but Cullerton thinks a deal with Republicans is within reach on that — just not next week.
Illinois can’t wait.
It’s time to get the whole thing done, once and for all.