Illinois’ budget troubles cannot be understated. The state’s daunting $110 billion unfunded pension obligation severely limits the state’s ability to meet its annual education, public safety, transportation, and Medicaid costs, and it heavily factors into its worst-in-the-nation credit rating.
Illinois’ pension payment next year is expected to rise to $8 billion. That means 25 percent of every state budget dollar will go to pensions (for comparison, the national average for state and local governments is less than 10 percent).
The state’s financial future could be even more troubling if the Illinois Supreme Court strikes down the General Assembly’s 2013 pension reform legislation. Many experts expect that to happen based on past rulings. A lower court in Sangamon County has already ruled the law unconstitutional.
I did not support the pension legislation because I believe, and still do, that the reforms did not properly address the real problem. Even if the law survives a Constitutional challenge brought on by the state’s public sector unions, the state’s unfunded pension liability will only be rolled back to 2009 levels—when Illinois already had the worst pension crisis in America. Rewinding the clock on the state’s pension debt is better than to have no reform at all, but let’s not pretend that we have anything close to a permanent solution yet.
The Illinois Constitution states that, “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
Attorney General Lisa Madigan will defend the pension reform law by arguing that because the state is facing an emergency situation, the state’s police powers give it the authority to change the terms of state workers’ pension benefits.
Both sides have strong legal arguments. The law does reduce benefits, and courts have granted states extraordinary police powers in extraordinary situations. The justices will have to determine which argument has the most merit.
In my view, we must not look at the eventual decision by the Illinois Supreme Court as the end of the matter. Whether the courts side with the state or with the unions, the fact remains that the only permanent solution to the state’s $110 billion pension crisis is to change the Illinois Constitution, which is something my colleague Rep. Joe Sosnowski has already filed legislation to do.
The free pass to use emergency police powers to fix the state’s pension system will only last so long. To get to where we need to be, Illinois needs to change its constitution.
I am supporting Rep. Sosnowski’s efforts to amend the Illinois Constitution. Yes, this will be a long and difficult process, but it is the only way to rescue Illinois—for its public workers and its taxpayers.
For too many decades, politicians have promised public sector workers retirement and health care benefits that cannot be sustained by the rest of the taxpayers who underwrite them. These benefits continue to be paid long after these politicians have left office. Residents can and do move to states that are run better than Illinois, taking their taxes and participation in our state’s economy with them. Residents who cannot move face dramatically increased taxes and reduced personal spending and investment, while suffering from diminished government services—even in critical sectors.
Pensions are consuming too much of the state’s revenues and are threatening our ability to pay for today’s public salaries, services, and capital investments while saddling future generations with too much debt. We need a permanent solution beyond the last change to the state’s pension law, and that begins with a change to our constitution.