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Wanted: Pols who'll challenge unions

January 26, 2010

The primary election is Feb. 2. Do you know who will take on the public employee unions and their pensions?

Because if we can't elect people who are committed to figuring out how Illinois will crawl out of an $80 billion-plus debt owed to public employee pension funds, the state surely will get flushed.

Illinois is circling the drain already, with its budget deficit running at more than $11 billion and growing each year thanks to spending for which there is no money.

For years, the state has swiped the money it needed to "balance" the budget from the irresistible billions sitting in the pension funds. Talk of state bankruptcy is no longer speculative.

That $80 billion is roughly enough to build 168 Millennium Parks, meet the CTA's capital needs 16 times over or rebuild O'Hare International Airport almost half a dozen times.

Fixing this ruinous state of affairs will require two missions impossible: End the pension fund raids by stopping the ballooning expenses of state operations, and bring the funds in line with the private sector.

The Tribune's political candidate questionnaire notes: "Health care for state employees and retirees costs Illinois $2 billion a year. Active employees pay less than 20 percent of premiums; retirees with fewer than 20 years of service pay less than 10 percent; those who worked more than 20 years pay nothing. Should state employees and retirees contribute more for the cost of their health care?" (Check out the candidates' answers at elections.chicagotribune.com/editorial/)

The questionnaire further says: "Illinois has an unfunded pension liability of $80 billion. Should the legislature reduce pension benefits for new state employees and/or require higher pension contributions from current employees?"

Public pensions aren't just crippling state government. Thanks to the legislature, local governments are crippled too. The legislature controls 18 public pension funds in Illinois, but it pays the benefit costs of just five. Local governments pay for the other 13, even though the legislature sets their benefits.

Said Wilmette Village Trustee Mike Basil on his pension reform Web site (pensionreformillinois.com), "When local government hires a new employee, for every dollar of salary paid to the employee, the local government has to spend more than (50 cents) to fund the employee's pension obligations that Springfield has dictated. Are there any private sector companies that pay more than one half of an employee's annual salary into a retirement savings plan?"

That cost, he adds, shows up in your property tax bill.

His solution: The legislature should give state and local governments "the option to provide newly hired employees with defined contribution, 401(k)-style retirement benefit plans, with the benefits determined by the unit of government responsible for paying the costs."

We aren't without other solutions.

The Illinois Policy Institute has proposed a Pension Funding and Fairness Act to limit the growth of state government spending and to require that all surplus revenues above the spending limit go into the pensions. The spending limit could be exceeded only by majority vote in a statewide referendum. The proposal follows Gov. Pat Quinn's pension reform plans, including greater employee contributions, an increased retirement age and a two-tier system for new workers. The institute calculates that these and other measures would fully fund the pensions, as required by law, by 2045.

Overly generous public pensions are to blame for much of the state's financial difficulty. The problem remains unsolved not for a lack of good ideas, but for lack of political will — and because politicians are playing footsies with the unions.

Many legislators are running in next week's primary without opposition, so it's easy for them to avoid taking a stand on pensions. A number of candidates didn't bother answering the candidate questionnaire, so we don't have any promises to hold them to.

But nine months remain until the general election, giving voters time to demand that candidates declare their independence of public employee unions. By doing so, they might demonstrate that public employees are in the taxpayers' service and not the other way around.

Dennis Byrne is a Chicago-area writer and consultant. He blogs at ChicagoNow.com