Kadner: GOP leaders almost oppose pension shift
Phil Kadner firstname.lastname@example.org | (708) 633-6787 May 9, 2012 9:54PM
Updated: June 11, 2012 10:17AM
Republican leaders in the Legislature oppose shifting the cost of suburban and downstate teacher pensions from the state to local school districts.
Sort of. Kind of.
Senate Minority Leader Christine Radogno (R-Lemont) and House Minority leader Tom Cross (R-Oswego) participated in a conference call Wednesday with the editorial board of the SouthtownStar.
I have to admit, it felt to me like talking to two guys in a bar spouting off about how government would run if they were in charge.
By that I mean no disrespect to Radogno or Cross. It just seems that Republican lawmakers can talk all they want to about how things ought to work, but they can’t do much about it because Democrats control the governor’s mansion and both houses of the General Assembly.
Because the purpose of the call was to discuss pension reform, specifically shifting the cost of the teacher pensions from the state budget onto local school districts, I figured the two Republican leaders would at least be clear on where they and their members stood.
Radogno said she feels strongly that the shift in pension funding should be contained in a separate bill and not be part of a number of other pension reform proposals Gov. Pat Quinn has recommended.
She said she was concerned about the impact of such a switch on property tax bills and, as a resident of Cook County, realized that some people were being taxed out of their homes.
Radogno said she has yet to see any specific language on how the pension shift would occur and was reluctant to take a firm stand against a bill she hadn’t seen. She never really said she would vote against the pension funding shift under any circumstances.
I asked Cross if Republicans in the House would vote against any shift in teacher pension funding. He said if it was presented as part of a package of pension reform proposals, Republicans would vote no.
He seemed to leave open the possibility that Republicans could vote for the shift if it were proposed in a separate piece of legislation or if things changed.
Cross and Radogno said they liked all of Quinn’s other pension reform recommendations, felt it was urgent to act on them this spring and feared for the state’s credit rating if that didn’t happen.
As regular readers should be aware, I’ve been warning about a shift in pension funding from the state to school districts for several months now. I believe that would mean stiff property tax increases for suburban residents. Schools get most of their money from the property tax.
Quinn, Senate President John Cullerton (D-Chicago) and House Speaker Michael Madigan (D-Chicago) have all talked about how unfair the teacher pension system is to Chicago.
Chicago funds its pension system for teachers while the state funds the system for downstate and suburban teachers. The state has about $80 billion in unfunded, long-term pension liability and about half of that is in the teacher pension fund.
The Democrats have said that any shift in pension funding would take place over a period of years and insist that somehow it would not raise property tax bills.
I don’t believe them.
The pension funding shift has been estimated at $800 million to $900 million a year. But Cross said it would probably be more than that.
He said the teachers’ retirement fund has changed its discount rate (the amount it expects to earn on bond investments) from 8.5 percent to 7.5 percent. That would mean an increase of $300 million to $400 million in the amount that school districts would have to kick in should the pension shift occur.
While school districts would not be responsible for the pension liability from the past, they would be responsible for fully funding teacher pensions in the future.
Cross and Radogno acknowledged that part of the overall problem with the pension shift is the way the state has underfunded public education for many years but said the state won’t be dealing with that problem now.
That’s a little disingenuous on the part of Radogno because she once cast a deciding vote that killed Gov. Jim Edgar’s plan to raise the state income tax to fund education.
But it’s difficult to blame any Republican when Madigan has overseen the House for 30 years as the state repeatedly failed to make pension payments that by law it was required to do.
I don’t know if anyone in Springfield really cares what taxpayers have to say, but if you want to keep your property tax bill down, you had better contact your legislators now.
As for Radogno and Cross, their opinions may not really matter in Springfield, but they at least ought to make the Republican position clear.
I sort of, kind of, really mean that.