A small universe of pension solutions
Editorials June 27, 2013 5:56PM
Ty Fahner, Kwame Raoul, Elaine Nekritz
Updated: July 30, 2013 8:23AM
When it comes to solving the state’s monstrous pension problem, we’d all do well to turn an old cliche on its head.
In the real world, there are just a few — not many — ways to skin the cat we affectionately call the state’s $98 billion unfunded pension liability. And the sooner the state legislative committee tasked with wrangling that pension debt comes to terms with that reality, the better.
The theme of the committee’s first hearing on Thursday, as articulated by its chair, Sen. Kwame Raoul, was to move beyond the two polarizing proposals that dominated the spring legislative session. One was backed by the unions and Senate President John Cullerton, the other by House Speaker Michael Madigan and the business committee (and this editorial board).
The two sides were dug in all spring, and the inevitable happened at the end of the session: nothing. The legislative committee then was formed last week, at Gov. Pat Quinn’s urging, to try to break the gridlock.
So Raoul is right to demand a broader starting point than those two bills, but he must be kidding when he says there’s a “universe of options out there.”
There are only a handful of ways to dramatically reduce pension costs, which is what’s required. You can reduce retirees’ cost-of-living increases — that’s where the big savings are — and/or raise the retirement age and increase employee contributions. Give or take a few smaller tricks, that’s it.
The only alternative to the bills out there that uses those limited levers, and potentially produces savings close to Madigan’s bill, is an intriguing proposal backed by the presidents of Illinois’ 14 public universities. As a bonus, Cullerton appears open to considering that idea. The committee also should seriously consider folding the Chicago Teachers’ Pension Fund, the main source of Chicago’s latest budget woes, into a final pension cost-cutting package.
Instead of scouring the universe for new ideas, how about starting there?