A proposal that would shift the burden of teacher pension costs from the state income tax payer to the local property tax payer is gaining traction in the Illinois General Assembly, according to an article in the Daily Herald Tuesday.
Republican lawmakers traditionally have strongly opposed such legislation, however the Herald is reporting two Republicans, Rep. Chris Nybo of Elmhurst and David Harris of Arlington Heights, seem to be getting behind the idea.
Democratic Rep. Elaine Nekritz of Northbrook, chairman of the House Pension Committee, has put forth a plan that would phase-in the costs to local school districts and require teachers and state workers to pay more into their retirement.
Elmhurst District 205 School Board officials have said repeatedly that any plan to shift the pension burden to local school districts would cripple public education by forcing major budget cuts. Officials say any cuts on top of the $1.2 million cut this year and the $3 million cut the previous year will dramatically change public education as we know it; programs would have to be eliminated and class sizes would grow.
Some state legislators have said the local districts have been too lenient in negotiating their teacher contracts and that having them pay the pension obligation would force them to hold the line on pension increases.
Of the state lawmakers who will be debating Nekritz's plan, more than 30 will be leaving the House and Senate on Jan. 9 when the new legislature is sworn in.
Rep. Nybo is one of those lame duck legislators. He lost his bid for an Illinois Senate seat in the 24th District to Sen. Kirk Dillard of Hinsdale in the Primary Election last March and is headed back to work in the private sector as an attorney.
Nybo was quoted in the Herald article as saying it would be a "travesty" not to settle the pension issue once and for all before the new General Assembly is seated.
They reflect the superficial values we have embraced as a society. In the larger scheme of things, none of the above really matters. What are we running from that we need to constantly "escape" Yes, I enjoy music and a good movie but do I think that they add more value to our society than social workers, teachers, and those who serve the NEEDS of others? Hardly. Yet, they are rewarded disproportionately. Wages are declining, people are struggling. I believe our society has its priorities backwards. I am sure this will offend many but I will never be guided by the lowest common denominator way of thinking.
The only way out of this pension mess is a constitutional convention. We need to wipe the slate clean, get out from under this uncontrollable burden, and start fresh. The con-con vote in 2008 was a missed opportunity. We now have to wait until 2028. Illinois will be bankrupt by then.
SOURCE: Capitol Fax Website * Cost of living adjustments would apply only to the first $25,000 of a pension if the retiree does not receive Social Security and $20,000 if he or she does. This change applies to both current and future retirees. * Pensioners would receive no COLA adjustment until they reach age 67 or five years after they retire, whichever comes first. The summary says this provision will apply to retirees already receiving COLAs. So an employee who retired at age 58 and is now 60 would not receive another COLA adjustment until age 63. (continued on next comment)
Retirement ages in the current statute would apply to employees 46 and older. One year would be added to current retirement ages for employees between 40 and 45 years old. Employees age 35 to 39 would have to wait an additional three years. Employees 34 and younger would have to wait an additional five years. * Employee contributions to pensions would go up by 1 percentage point in fiscal year 2014 and 2 percentage points in fiscal year 2015. * The salary that counts toward a pension would be capped at the higher of the Social Security wage base or the employees’ salary when the bill becomes law. […] * School districts, community colleges and universities would take over the state’s pension cost at a rate of 0.5 percent of payroll per year. * Pension systems would achieve 100 percent funding in 30 years. * Courts could force the state, school districts and universities to pay their required pension contributions. “Other state funds” could be intercepted if the payments are not made as required by law. * Once existing pension obligation bonds are paid off, annual bond service funds would be rerouted to pay off broader pension debt — about $694 million starting in fiscal year 2016 and $900 million per year in 2020.
More complication trying to obfuscate the problem. Also, where is the money going to come from to pay off the bonds. The state is broke, remember???? Freeze the current plans (so everyone receives a pension for the amount of time they've alreadyworked and level of salary they have earned to date - in other words, nobody will loose something they've already earned). Move everyone to a defined contribution plan. Private companies have been doing this for years and that trend continues because private companies realize that defined benefit plans are not sustainable. Well, they aren't sustainable in the public sector either unless the governments soak the taxpayers with taxes at confiscatory rates. It is the only solution that is "fair" to the taxpayers.
Your excellent suggestion of a defined contribution program is one that many have advocated. I agree it is best, unfortunately it apparently has not gotten traction in the Illinois Congress. Again, we can complain or, better yet, recommend what we believe to be better solutions, but these solutions are not being offered in bills because the support does not exist. The plan in the article seems to be gaining traction and while it may not be the best solution, it may realistically be the best we can get at this time.