Kadner: Beware the pension con game
By Phil Kadner firstname.lastname@example.org December 5, 2012 5:52PM
Illinois Rep. Kelly Cassidy, D-Chicago, left, and Illinois Rep. Daniel Biss, D-Skokie, center, look on as Illinois Rep. Elaine Nekritz, D-Des Plaines, speaks with reporters while at the Illinois State Capitol Wednesday, Dec. 5, 2012, in Springfield, Ill. A group of lawmakers offer new legislation to fix the state's crippling pension crisis and end bitter fighting over a multibillion-dollar issue that gets more expensive by the day. (AP Photo/Seth Perlman)
Updated: January 7, 2013 1:26PM
This pension reform game in Springfield reminds me of three-card monte.
Three-card monte is a confidence game in which the victim, or mark, is tricked into putting up money in the mistaken belief he’s going to win even more.
Some state legislators Wednesday unveiled yet another pension reform plan to keep this state from suffocating under a mountain of debt.
They shuffled the usual deck of pension reform cards, picked out a few and placed them on the table.
All you, the suburban taxpayer, has to do is put up a tiny amount of money and over the long haul you come out a big winner.
In Illinois, editorial boards, good-government groups and chambers of commerce all are demanding pension reform.
This state owes something like $100 billion to the various pension systems, the largest being the system that pays the pensions of suburban and downstate teachers.
The main problem is that governors and legislators for years didn’t make the pension payments required by law, borrowed money to make those payments and then spent a lot of that cash on other things, sticking you with interest payments along with the unpaid bills.
In the real world, the place where all us suckers live, that’s called fraud.
Con men don’t worry about that sort of thing.
They just talk faster when you mention fraud.
Anyway, in the latest version of the game, just as in all the others, the old switcheroo appears.
The state wants to transfer the payments for the teachers pension plan onto the backs of property taxpayers in the suburbs.
Originally, this massive obligation was going to be transferred in one year, then it became three years and then five years. Sometime in the spring 11 years was mentioned.
Now the years have completely disappeared.
There’s still going to be a pension shift to the suburbs, but it’s only 0.5 percent of the payrolls for local school districts for however many years it takes to make the pension plan fully funded.
And if that’s not enough to satisfy you, that 0.5 percent shift might not even begin for two or three years.
Heck, you could be dead by then.
How much is this going to cost you, the suburban taxpayer?
Don’t think of it as a cost. Think of it as saving billions and billions of dollars in 30 years or so.
What no one ever mentions is that the property tax has been increasing in Illinois for years in large part because the state has refused to pay its fair share of the cost of public education.
So the lawmakers not only failed to make pension payments on time, with your tax money, but they also refused to fund your public schools, as required by the Illinois Constitution.
That’s why as property values have decreased in recent years, your property tax bill keeps going up.
In fact, the state has reduced the amount of money it sends to the schools for transportation, has refused to pay for the cost of special education and does not pay for the cost of teaching children who are not English-speaking.
But schools have to do all of those things under the law.
The con men aren’t to blame for all of this. As always, the suckers rush to put up their money.
Most people don’t understand that their property tax is determined by a tax levy, which is the amount of money schools, municipalities and other government bodies say they need to operate.
And most school districts are raising their levy each year because they keep giving teachers pay raises.
It happened recently in Chicago, but it’s happening in the suburbs as well.
And when teachers ask for raises, the parents of students usually come out to support them.
Do they understand that means their property tax will increase?
Some do. Many don’t.
They think the money comes from the state.
Of course, Illinois has no more money for education.
In fact, even though the state passed an income tax increase that raised $7 billion, it’s a temporary tax hike and will start to disappear in 2015, the year after the next gubernatorial election.
No one knows what’s going to happen then.
On thing seems certain: Property tax bills are going to go up and up and up.
At some point, schools also are going to have to start cutting programs and teacher salaries, but that probably won’t take place until after the pension crisis is resolved.
Look! There’s a card with a corner turned up. The dealer doesn’t seem to notice it.
Pension funding reform isn’t going to solve the financial problems of this state.
When billions of dollars simply disappear, when no one can tell you exactly where all of that money went, when you’re last in education funding in the country, nearly last in funding for mental health and nearly last in programs for the developmentally disabled, something is fundamentally wrong.
The answer my friends is charter schools. Better yet, vouchers.
Don’t worry about where that money will come from. You’re going to save a bundle.
That’s what the con men say.
The shift in teacher pension funding is “inevitable.”
That’s the word I keep hearing from legislators, the governor’s office, even the organization that represents school boards.
The only thing that’s inevitable is that your money will keep disappearing.
But so long as the politicians keep talking, as long as they keep your attention focused somewhere else, the suckers won’t notice they’re being taken.
The Lord wouldn’t have made sheep if he didn’t want them fleeced, the con men will tell you.
Those words should be inscribed in the Capitol dome.