Rockford Register Star

Our View: Illinois continues to fail to live up to pension obligations

What's wrong with Illinois?

Saturday, June 12, 2010

We don’t just have a legacy of corrupt state officials. While other states gradually reformed their pension systems over the past decade, our state has resorted to gimmicks. Mostly, we have practiced blithe ignorance of the trouble we were in.
The trickery and the ignorance were described well by Register Star reporter Sean F. Driscoll in a special report on pensions, a series that ends in today’s newspaper.
It is tough to pick the aha moment, but it might have been in the 1950s, just 10 years after Illinois created its pension system. Already, there were signs of underfunding.
Or it might have been in the 1970s, when lawmakers added language about pensions to the Illinois Constitution. Membership in any pension or retirement system, the constitutional provision states, is an “enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
Is there a better illustration of the ineptitude of Illinois government? Lawmakers, unwilling and unable to fully fund the state’s pension plans, instead resorted to empty promises.
Empty, sure enough, because four decades later, the state stands on the edge of bankruptcy. Illinois is $78 billion behind on pension payments and ranks dead last in the country in funding its pension obligations.
Laurence Msall, president of the nonpartisan government research organization The Civic Federation, says that one day — maybe during this decade — the state will simply run out of money to pay its retirees. Police and firefighters will be among the first to go empty-handed.
“Those are some of the worst-funded and precariously funded pensions in Illinois,” Msall said. “If anyone’s going to run out of money in their pension funds, those are going to be the ones that run out of money first.”
It’s important to remember, too, state workers earn about $20,000 on average from their pension, according to AFSCME Council 31. Reducing that benefit won’t help much with a $78 billion funding hole, as the Register Star’s Driscoll writes.
Still, when 90 percent of workers in the government sector get pensions, compared with less than a third of workers in medium-sized and large firms, it’s an unsustainable economic model.
This year, the Legislature finally passed reform, but it left out police and firefighters. There was talk of borrowing money to pay pension obligations; there was talk of skipping payments.
In other words, more of the same. That’s what’s wrong with Illinois.