Editorial: What’s ‘morally’ wrong? Fake pension fix
Editorials May 9, 2013 5:10PM
Senate President John Cullerton | Seth Perlman~AP
Updated: June 11, 2013 6:27AM
It is hard to imagine the state of Illinois could sink any lower.
But it could.
And it will if the meager pension cost-cutting bill passed by the Illinois Senate on Thursday becomes law.
Legislators should bury this bill before the state Legislature’s May 31 adjournment and rally behind the only meaningful reform package in play: House Speaker Michael Madigan’s cost-cutting bill, which passed the House last week.
The Senate bill is the worst kind of reform: It looks like progress and it could be passed off as such by campaigning politicians. But the bill saves relatively little and allows Illinois to continue the outrageous pass-the-buck behavior that got us in trouble in the first place.
The bill, championed by state unions and Senate President John Cullerton, fails to take a meaningful whack out of the state’s roughly $100 billion pension debt, a debt so high that it is squeezing out state spending on everything else and threatens the pension systems’ very ability to pay out benefits.
“This is a bill that perpetuates this crisis mode,” Sen. Matt Murphy (R-Palatine) said during the Senate floor debate on the bill, which would affect 719,000 active and retired state workers and teachers. “This bill doesn’t do enough to change the trajectory of pension funds, and you will be back here, living this nightmare” again.
Cullerton is advancing this bill, despite its limitations, because he thinks it’s the only way to honor a clause in the state Constitution that protects pension benefits. By giving state workers and retirees a choice between a generous cost-of-living increase and subsidized retiree health care, Cullerton and others believe the constitutional issue is resolved. Madigan’s bill (first introduced by Rep. Elaine Nekritz and Sen. Daniel Biss) unilaterally lowers benefits by reducing the COLA, raising retirement ages and increasing employee contributions.
We respect Cullerton’s view and his intentions. But it’s up to the courts to resolve this issue and strong legal arguments also favor Madigan’s approach. By putting an untested unconstitutional theory above all else, Cullerton and the unions have come up with a plan that accomplishes little. Remember, we’re talking about repairing the nation’s worst-funded state pension system.
Cullerton projects savings of $45 to $51 billion (versus $150 to $160 billion under Madigan’s plan), but because workers can choose between three options, those savings aren’t guaranteed, nor are they based on actuarial assumptions. The bill also continues to backload payments over a 30-year schedule, continuing Illinois’ shameful practice of pushing off bills till tomorrow.
We’d rather take a risk on the constitutionality of Madigan’s bill — with the promise of real savings — than bet on a bill that fails to truly solve the state’s financial problems.
In other words, Cullerton’s bill is a lemon. And he probably knows it, which gives us hope.
He has done his part: negotiated in good faith with the unions, drafted a bill, and gotten it through his chamber. When the bill faces a brick wall in the House, which it should, Cullerton can say he gave it his best shot and then support the Madigan bill.
We fear Cullerton may try to resuscitate a bill that includes his and Madigan’s proposals, essentially letting the court default to Cullerton’s plan if it rules Madigan’s unconstitutional. That has surface appeal but would likely encourage the court to pick the less controversial choice (Cullerton’s).
In the floor debate Thursday, Senators spoke of keeping promises to state workers, suggesting that steps beyond Cullerton’s plan were morally bankrupt. But what about the morality of continuing to make promises the state will never be able to keep?
We vote for honesty today, for an end to the long string of empty promises that created this ugly mess.