Mulvihill: ‘Cost-shift’ plan acid test for Southland Democrats
By Jerry Mulvihill Guest Commentary December 7, 2012 11:00PM
Illinois House Speaker Michael Madigan | Al Podgorski~Chicago Sun-Times
Updated: January 10, 2013 6:37AM
How tied to Illinois House Speaker Michael Madigan are Southland Democratic legislators? Residents throughout the area are about to find out.
Legislators have reconvened in Springfield to again attempt to fix the state’s spiraling budget deficit. Central to their focus will undoubtedly be a Madigan-led pension reform package.
Madigan (D-Chicago) has spelled out his recipe for pension reform often in the media, saying that it must include eliminating the “free lunch for local school districts.”
That refers to his proposed “cost-shift” plan, which would place responsibility for financing the Teachers’ Retirement System, the pension fund for suburban and downstate teachers, on school districts rather than the state.
By skirting what historically has been a duty of the state, Madigan, Senate President John Cullerton (D-Chicago) and Gov. Patrick Quinn will be forcing suburban taxpayers to pay for the Legislature’s failure for many years to properly fund TRS, the state’s largest pension fund.
The cost-shift plan was developed by some of Illinois’ top corporate leaders, including the Civic Committee of the Commercial Club of Chicago and its millionaire president, Ty Fahner. The plan is remarkably one-sided — proposing to fix the underfunding of TRS on the backs of middle-class Illinoisans.
Beyond cost shifting, some other proposed reforms will not only have a direct negative impact on thousands of teachers’ promised retirement benefits but also on the fiscal health of local schools. Among the other ideas are eliminating cost-of-living increases for retired workers, limiting access for retired teachers to health care and increasing the retirement age.
How will this affect taxpayers and their public schools? Simple. By allowing the state to default on its legal obligation to fund TRS, the plan would leave school districts with little option but to levy the maximum annual amount in tax revenue from property owners to meet this extra cost.
A recent visit and phone call to my legislators, state Sen. Ed Maloney (D-Chicago) and state Rep. Bill Cunningham (D-Chicago), revealed their lockstep position with Madigan (also state Democratic chairman) on the pension cost shift.
Despite the results of an October poll by the Chicago Tribune that indicated most voters surveyed statewide oppose the cost-shift plan, support for it is strong among Democratic lawmakers in the Southland.
It’s unfortunate that they favor solutions that are not based on the interests of local voters but rather on what’s advocated by Madigan and his friends among Illinois’ wealthy elite.
Missing from the Madigan/Fahner proposals are any of the more stable solutions for the state’s long-term budget sustainability suggested by organizations such as the Center for Tax and Budget Accountability. The CTBA’s framework, which has been virtually ignored by legislators for 20 years, suggests increasing Illinois’ tax revenue by a change in tax policy.
One of the center’s key findings is that the state’s dismal fiscal condition is the direct result of a tax system that fails to correspond with an “ability to pay principle.” In other words, Illinois’ tax code, most notably the income tax, is one of the most regressive in the country, according to the center.
Where do your legislators stand on these issues? It’s likely they feel they must go along with Madigan and Cullerton despite pressure from their constituents to not do so.
Southland Democrats in the House and Senate appear willing to sever the long-standing alliance between their party and working- and middle-class citizens.
Will Southland Democrats push in the final days of the current Legislature to abandon the cost-shift plan, limit corporate tax breaks and amend the Illinois Constitution to adopt a progressive income tax?
Or will they continue to pay homage to party leaders and follow their directives?
I think we know the answer.
Jerry Mulvihill, of Alsip, is a public school teacher, former school board member, public school activist and father of two students in Southland public schools.