Illinois stands at a crossroads that will define its fiscal future and its ability to provide for its people for decades. At issue is whether Gov. JB Pritzker and legislative leaders have the courage to soundly reject a union-backed proposal to roll back Tier 2 pension reforms that would saddle Illinois taxpayers with $80 billion-plus in additional pension contributions over the next 30 years.\u00a0<\/p>\n
With the fall veto session rapidly approaching and conversations around its anticipated agenda swirling, the continued push by union leaders for such fiscally reckless proposals demands a clear response from Illinois taxpayers: Enough is enough.<\/p>\n
The bill, SB1937<\/a>, isn\u2019t just expensive; it\u2019s also fiscally catastrophic.<\/p>\n To fund existing state and local pension promises, Illinoisans will need to pay more than $500 billion in contributions over the next three decades. That\u2019s roughly $100,000 per household.\u00a0<\/p>\n The bill would add tens of billions more to that tab. According to estimates from the Commission on Government Forecasting and Accountability (CGFA) and back-of-the-envelope estimates of local impact, it will require an additional $80 billion to fund.<\/p>\n The state already has budget challenges<\/a> it must address, which will be substantially worsened if the bill passes. It will require new taxes or further crowding out of critical government services, such as K-12 education, to fund.<\/p>\n Also disturbing is that local governments are left to figure it out on their own. There is no comprehensive actuarial analysis showing the impact of this bill on local pension funds \u2014 despite the bill making changes to nearly every pension fund except the CTA\u2019s pension fund \u2014 and there is no funding to pay for it. Every single state lawmaker who votes for this bill is voting to impose a stealth property tax on every resident in Illinois.<\/p>\n Tier 2 was established for employees hired on or after Jan. 1, 2011, to address Illinois\u2019 unsustainable pension obligations. It provided a lower benefit to new employees and changed the trajectory of Illinois\u2019 pension liabilities. But since that time, there have been recurring efforts to undo the Tier 2 reforms and return all employees to the unaffordable benefit levels of Tier 1.<\/p>\n Some of these efforts have been successful: Just months ago, in the waning hours of the spring legislative session, lawmakers unanimously passed pension sweetener<\/a> legislation for Tier 2 Chicago police and firefighters. The process followed a troubling pattern that has plagued Illinois for decades \u2014 lawmakers passed the bill with no public debate, no cost analysis and no identified funding source. This legislation increases Chicago\u2019s pension liabilities by $11 billion, requiring an additional $7 billion in contributions to its police and fire pension funds over the next 30 years. It also takes combined funded ratios down to 18%, but the city offered only token resistance.\u00a0<\/p>\n The political dynamic was familiar: Legislators gained favor with powerful constituencies while foisting staggering costs onto families already stretched to the limit who had no voice in the decision. Chicago now confronts even deeper budget pressures as the city faces a projected $1.1 billion budget deficit.\u00a0<\/p>\n Now, with the pension proposal, the same dynamic threatens to play out statewide, but with far greater consequences.<\/p>\n Legislators are under intense pressure. Behind the bill stands a well-organized union campaign that has already sent more than 100,000 emails, made tens of thousands of phone calls and submitted thousands of witness slips to legislators. Union leaders have been clear: They are not stopping now.<\/p>\n Their messaging is persuasive: They argue the benefit increases address federal \u201csafe harbor\u201d compliance, which requires a minimum benefit level for public employees who don\u2019t receive Social Security, and ensure fair retirement benefits for public employees. Who could oppose fairness or federal compliance?<\/p>\n The safe harbor argument uses a legitimate concern about federal compliance as political cover for a rollback of necessary reforms. The safe harbor fix is straightforward: For employees who don\u2019t receive Social Security, make the amount of salary considered when calculating benefits the same as what is considered under Social Security to ensure retirement coverage is equivalent. However, the unions have rejected this clean safe harbor fix<\/a>, which would cost a fraction of the price tag of SB1937.\u00a0<\/p>\n The question isn\u2019t whether public employees deserve fair treatment \u2014 they do. Illinois depends on dedicated teachers, firefighters, police officers and other public servants who provide essential services. The question is whether Illinois can afford to return to the unsustainable benefit structures that created our pension situation in the first place, potentially jeopardizing the retirement security these employees deserve.\u00a0<\/p>\n Recent years have brought meaningful progress under the leadership of Pritzker and the General Assembly: credit rating upgrades, elimination of the state\u2019s bill backlog and modest reserve growth. But if passed, this pension bill would unwind this hard-won progress, potentially triggering credit rating downgrades and reversing recent careful fiscal stewardship the governor has worked to achieve.<\/p>\n Pritzker and legislative leaders face a test of courage. They can stand with Illinois taxpayers and reject legislation that threatens the state\u2019s financial stability \u2014 as they did by not passing the bill during the spring session \u2014 or they can succumb to union pressure and mortgage Illinois\u2019 future for short-term political gain.\u00a0<\/p>\n It is paramount that any pension legislation be considered through the lens of maintaining our state\u2019s fiscal strength and supporting economic growth. It should follow these 10 principles of pension reform<\/a> to ensure that any pension legislation is responsible and does not reverse the recent strides Illinois has made on fiscal stability.<\/p>\n We urge Illinoisans to contact their legislators and tell them enough is enough. And we urge legislators to reject SB1937 and protect the fiscal progress Illinois has made.\u00a0<\/p>\n Derek Douglas is president of the Civic Committee and Commercial Club of Chicago. Joe Ferguson is president of the Civic Federation. David Greising is president of the Better Government Association.\u00a0<\/p>\n The leaders of the following organizations co-authored this piece and are partners in an effort to protect the financial solvency of pensions in Illinois:\u00a0Building Owners and Managers Association of Chicago, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce, Illinois Manufacturers\u2019 Association, Illinois Retail Merchants Association and the Taxpayers\u2019 Federation of Illinois.<\/p>\n Submit a letter, of no more than 400 words, to the editor here<\/a> or email letters@chicagotribune.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Illinois stands at a crossroads that will define its fiscal future and its ability to provide for its…\n","protected":false},"author":3,"featured_media":294727,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,11890,1269,255,67,132,68],"class_list":{"0":"post-294726","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-commentary","10":"tag-opinion","11":"tag-personal-finance","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115355725638813755","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/294726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=294726"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/294726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/294727"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=294726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=294726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=294726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}