Cost shifting, fear stall pension bill
SouthtownStar editorial June 6, 2012 7:08PM
Updated: July 8, 2012 6:54PM
We didn’t think the Legislature would approve pension reform, the political equivalent of nitroglycerin, during its spring session, and we were right. But we take no satisfaction from that because the need to reduce the cost of the state’s five pension systems remains critical to the financial health of Illinois, now and in the future.
There was much political posturing by both parties in both chambers, and the normal sleight of hand by House Speaker Michael Madigan (D-Chicago), but in the end divisions were too deep, and the fear of political backlash too great, for compromise.
Gov. Pat Quinn says an agreement is very close. We hope he’s right but doubt anything substantive will occur until after the Nov. 6 election. The political ramifications of passing a reform package, especially for Democrats dependent on union support, are too uncertain when all 177 legislative seats are up for election, many from newly drawn districts.
What’s encouraging is that a framework for reform appears in place — requiring state employees, including teachers, to get lower cost-of-living raises in retirement in exchange for still having access to the state’s free health care coverage. They can stick with compounded 3 percent raises but won’t get the state medical plan.
The main obstacle is Madigan’s insistence that the state shift, over several years, its teacher pension costs to local school districts. He says that’s fair because teachers really aren’t state employees, and the districts need to face the financial consequences of their teacher contracts’ effect on pension costs.
But that’s out of the question for Republicans and downstate and suburban Democrats, who correctly argue that school districts, many already struggling financially, could not assume such costs without big property tax increases. That’s the last thing overburdened homeowners need.
Will Madigan concede on his cost-shifting plan? Will Democrats cave and go along with it? We’ll see, but likely not until voters have spoken.