Blog

squareLogo

The Wrong Deal for Illinois

This Tuesday a group of Springfield insiders, many of whom caused the pension crisis with decades of bad deals and giveaways, will try to rush through a pension deal without giving Illinoisans an opportunity to study the details.

They want us to trust them.

We don’t – and can’t.

In the early 1990’s, Senate President John Cullerton was on a committee of 10 legislators who inserted language into a pension bill that allowed 23 government union bosses to collect an extra $56 million from municipal pension funds. According to the Chicago Tribune, “the changes became law with no public debate among state legislators, and, more importantly, no cost analysis.”

Sound familiar?

A few years ago, the legislature approved a workers compensation law that was highly touted for its bipartisan “reforms.” Despite the acclaim it received at the time, in the end it accomplished very little. Illinois’ workers compensation system remains uncompetitive with neighboring states and our economy continues to suffer.

This time the stakes are much higher.

Getting pension reform wrong could devastate Illinois’ economy over the long term.

The truth is the savings in this bill are both insufficient and will make true, comprehensive reform more difficult. Illinois right now has the highest unfunded pension liability in the country. This proposal would take us from the worst to merely very bad and guarantee a future of higher taxes. If you thought the Quinn-Madigan 67% income tax hike was bad, just imagine what tax-and-spend politicians have in mind for an encore.

Unfortunately, legislative leaders have kept Illinoisans in the dark about the details of this bill. The pension deal was announced on the afternoon before Thanksgiving prior to many legislators being briefed on it. Legislators will be asked to vote for it Tuesday. Yet as of this writing no one has released the legislative language.

Whenever politicians act like this, it is a bad sign for taxpayers. Like ObamaCare, they’ll pass the pension deal before most legislators know all that’s in it.

While the final details are unclear, summaries released to date raise some real concerns.

It’s rumored that the bill would eliminate pensions from collective bargaining alongside pay and health benefits. This could tie the hands of government leaders who will need to negotiate further, more comprehensive, reforms on pensions and related issues in the future.

We’ve also learned that the legislation gives “consideration” to government union members by decreasing the amount state workers need to contribute to the pension system. That means you – and everyone else – pay more.

The bill is also expected to include a ‘guarantee’ provision that could require taxpayers to pay for government pensions before payments are made for other government services and programs. That means payouts to government union bosses are ranked ahead of investments in our schools, public safety, and the social safety net. Provisions like the pension guarantee give government union bosses more power in a system that is already rigged in their favor. Government union bosses are funded by your tax dollars and use your money to elect and lobby politicians who will grow government and give them more money. It’s a closed loop system with taxpayers left standing on the outside.

The biggest problem of all is that the rumored savings from the bill would reduce the government’s unfunded liability by less than 20%! It barely scratches the surface of the problem. All this work for relatively small savings that do nothing to stop future tax hikes, and, in fact, make them more likely.

Bigger government. Higher taxes. That’s the future if we continue down this path.

There is a better way.

Government workers and retirees deserve to be treated fairly. But let’s not forget who pays for this — it’s the hard working taxpayers of our state, who themselves are struggling to make ends meet in an economy that is weighed down by the fiscal blunders in Springfield.

We can have a pension system that is fair to both sides of this transaction, the government workers and the taxpayers who pay for it. True reform would cap the current system and fully put in place a 401k-style program that is similar to the retirement plans of most Illinoisans. That’s fair to workers and taxpayers, and it ensures we will never face a pension crisis again.

Republican Leaders Jim Durkin and Christine Radogno are trying in good faith to negotiate a solution to the pension crisis. Those good intentions are why Democratic bosses are trying to rush this through before there is a full airing of the facts.

We’ve seen what happens when a massive deal is negotiated behind closed doors, announced over a holiday weekend, and no one is given a chance to digest the bill. It ends very badly.

A vote for this bill is a vote for insufficient reform. A vote for this bill is a vote for a future tax increase.

We can solve the pension crisis. This deal doesn’t do it.

Let’s get it right.

Bruce