Governor, Mayor, 'Engage Illinois'
Lessons from 'The Little State that Could': 'This is about math, not politics'
Friday, April 06, 2012
Gov. Pat Quinn and Mayor Rahm Emanuel appeared together Wednesday night at a Tribune forum deep inside Chicago's Field Museum. Looming over them onstage was a thousand-pound gorilla. No, not an escapee from a natural history exhibit upstairs. This beast, invisible yet the most powerful force in the room, is the pension crisis now menacing the state of Illinois, the city of Chicago and a shockingly long list of local governments statewide.
Quinn and Emanuel affirmed together what each of them has said separately: Rising pension costs threaten every spending priority, every program, every promising idea, that Illinois public officials propose. What's more, even as pension expenses consume enormous shares of incoming revenue, the pension funds still are strapped. Both men were abundantly aware of the startling news that the state's biggest pension fund, the Illinois Teachers' Retirement System, now warns that it may need to cut payouts promised to teachers, starting with thosealready retired.
This was the most promising discussion of this crisis we have yet heard.
The governor spoke of generous retirement benefits — retiree health care, compounded cost-of-living adjustments — that politicians have doled out to public workers. "Now," he said, "we have to deal with the fact that the money isn't there." He's waiting for a pension working group that will report to him this month before he details a rescue agenda.
The mayor described the dishonesty of a pension system fomented by pols who committed taxpayers to dole out more than they can afford to pensioners. If Chicago does nothing, he said, property taxes will have to rise by 150 percent — a prospect he rejected as unthinkable: "You won't recruit a business, you won't recruit a family to live here."
So, where do we go from here? How do Quinn and Emanuel deliver reforms?
Emanuel raised, and Quinn discussed, the best idea of the night: that Illinois consider pension changes that the similarly Democratic state of Rhode Island adopted in November.
Briefly: Politicians in that state — like Illinois, its pension obligations are among the nation's worst-funded — risked their political futures to stabilize a sinking system. They raised retirement ages to Social Security thresholds, tied cost-of-living adjustments to investment returnsand the funding level of the pension system, and replaced some guaranteed pension benefits with a 401(k)-style plan.
Emanuel and Quinn agreed this is the single most important agenda in Springfield. They promised to partner in pushing for a solution this year.
To achieve anything, they will have to be crusaders as forthright and resolute as Rhode Island's Democratic treasurer, Gina Raimondo. Sit down with her — we had the opportunity a few weeks back — and she'll soon offer the no-blame, no-histrionics mantra she voiced in hundreds of often hostile public meetings across her state: "This is about math, not politics." She based her campaign, "Engage Rhode Island," on educating citizens, and only then negotiating a legislative fix. Her foundational document, "Truth in Numbers," runs a mere 16 pages, unemotionally laying out the disaster facing retirees and taxpayers.
Raimondo's success makes her a rock star in, of all things, public finance. Her dictum is that no political deal is possible unless government leaders first explain the crisis in terms taxpayers can understand. She would arrive at community meetings with a sample of each locale's tax bills — today and, if nothing is done to reform pensions, in the near future. Emanuel said a website will deliver that information. That's good, but we can imagine him going ward to ward, translating Chicago's potential 150 percent increase into dollars, and asking Raimondo's question: "Are you ready to pay this?"
We hope Quinn, Emanuel and other leaders here now will "Engage Illinois." They are right that deniers in this state's politics have pretended the gorilla doesn't exist. In a December article titled "The Little State that Could," Time magazine explained how Raimondo's "Engage" campaign convinced other liberal Democrats that they needed to act:
The progressive case for tackling bankrupt public-sector pensions rests on the idea that government has obligations to the future as well as to the past. That may sound obvious, but it is a theory that crosses a major Democratic fault line. The stewards of past obligations — namely, the unions representing public-school teachers and other government employees — have been the backbone and sinew of the party for a generation. The unions are among the biggest donors, and their members pound the pavement at election time. They have no interest in giving up the fruits of their loyalty.
Eventually, though, the massive effort to educate all citizens — union workers included — gave Rhode Island public employees the sense of security that, for many Illinois public employees, risks being mere fiction. That state's Legislature passed pension reforms by votes of 57-15 in the House and 35-2 in the Senate. We yearn for the day when Illinois legislators deliver similarly lopsided margins.
One final takeaway: Page 7 of "Truth in Numbers" warned Rhode Islanders that if they didn't reform their retirement system, the portion of each taxpayer dollar required to support pensions would rise to a stunning 20 percent. Yet former Budget Director David Vaught has confirmed to us that Illinois likely will hit that same 20 percent mark in ... the fiscal year that starts July 1.
Governor Quinn, Mayor Emanuel: Engage Illinois. For our part, we will keep trying to help.