Unsustainable Pensions

Biggest concern to all local taxpayers should be the eventual unsustainable pensions of the City of Peoria. The following is from Dan Proft, Republican Candidate for Governor of Illinois.

IL Pension Systems Are Financially Unsustainable

September 15, 2009

The Chicago Sun-Times has suddenly discovered something Springfield politicians have known for a long time and tried to conceal, and something conservative reformers have known for a long time and tried to expose with no help from the establishment media: Our pension system is a looming disaster that threatens our state’s economy and our quality of life.

At $90 billion, Illinois’ unfunded pension liability, the highest in the nation, didn’t appear overnight. The facts have been long known.

It’s why residential property taxes keeping rising even as property values fall: we are not financing the education of our young people, we are financing public pensions.

Even liberal Democrat Sun-Times columnists Mark Brown and Carol Marin have come to the realization that Illinois’ public pension systems are not financially sustainable in their current form.

On Sunday, Mark Brown wrote:

“I would respectfully suggest instead that if the public employee unions don't step up to the plate and join as advocates for real pension reform in this state, then we're going to need to reconsider that constitutional protection.

“I say that knowing I am sticking my head in a hornet's nest. I really don't want to get a reputation as a public employee basher and don't believe I am one.”

I am not a public employee basher either but there is no escaping the unyielding math of actuarial tables. And I don’t blame people who take advantage of the rules as they have been set up. I blame those who set up the rules.

This is why I routinely say Illinois does not have a management problem, it has a system problem. Illinois isn’t broken. It’s fixed. The rules have been set up for the benefit of the Springfield political class and against people who play by the rules.

Listen to newborn taxfighter and Chicago Democrat Carol Marin, reacting to the Sun-Times' pension stories: “No wonder taxpayers, hunched over with the burden of paying the taxes to support these pensions, are broke!”

Welcome to the party, folks.

For years conservative reform state senators like Steve Rauschenberger talked about the voodoo math one must subscribe to in order to believe we could continue on with public pensions in their current form. That didn’t stop the liberal elites in the media from flaking for the public sector unions and the politicians they finance.

This is another example of the great paradox in Illinois politics: systems no one in power wants to defend, but no one in power wants to change. Someone is benefitting from the status quo—and it certainly isn’t the taxpayers.

Democratic politicians, public sector unions, and liberal media elites all get theirs, and you get the tab.

Both Ms. Marin and Mr. Brown would have done their readers a service if they acknowledged what is clear to all but the most ideological columnists: Nothing will change with Illinois’ pension system as long as the Chicago Democrats are running the show. If what I say is not so, then I would like one of those Chicago Democrats or their media handmaidens to please point to any substantial public sector pension reforms advanced by the Chicago Democrats who control every branch of state government.

Nothing will change with the current political order because those in charge do not have the political courage to do the right thing and risk the ire of the public sector unions. It’s the public sector unions which finance the Chicago Democrats’ careers, and there’s not one in the bunch who’s prepared to take on his own patronage army to reform the system.

Instead, the Chicago Democrats do whatever it takes to finance the status quo, kicking the can further down the road. They’ll even rewrite the Illinois constitution to jack state incomes taxes to fund their core constituency, as Dan Hynes recently proposed.

Nor will go-along-to-get-along Republicans who have received thousands of dollars in campaign cash from the public sector unions touch these pension systems either.

My opponents, State Sens. Kirk Dillard and Bill Brady, who collectively have been in Springfield a total of 30 years, have received thousands of dollars from the teachers unions and other public sector unions like SEIU – the principle obstacles to pension reform.

I am the only candidate for governor who is proposing a fundamental overhaul of Illinois’ pension system to make it financially sustainable going forward. We need to look at a whole battery of reforms including:

• Moving recipients from a defined pension benefit model to a defined pension contribution model.

• End the automatic cost of living adjustment (COLA) increases, compounded annually. At 3%, annual COLA bumps have consistently outpaced inflation for the last 15 years. We have had deflation recently, which means these COLA bumps are not COLAs. They are raises.

• End double- and triple-dipping.

• Increase the retirement age.

• End the practice of income spiking, which is notorious among school superintendents.

• Increase the number of years required to be vested in the system.

That’s what real reform looks like.

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