Pension reform is nigh . . . unlikely

Monday, April 16, 2012

“I believe there will be a genuine effort,” Illinois State Chamber of Commerce chief Doug Whitley says. “You're hearing more and more pension managers saying that benefits are at risk. . . . I do think the unions will agree to something.”
Mr. Whitley's reference is to what happens on Tuesday. That is when, after many months of posturing and promises, Gov. Pat Quinn's bipartisan pension reform commission is due to release its findings on what to do about government retirement spending that is eating Illinois and its economy to death.
Like Dorothy's lion, I do want to believe that Mr. Whitley is right, that something real and meaningful is about to happen. I do, I Do, I DO believe.
Only, I don't. There surely are some good signs out there to cheer optimists. But we've all been here before and, even if something good does happen, it may not happen soon enough to forestall one of the bond rating agencies from kicking the state's credit to near-junk levels, as has been threatened.
By now, we all know the problem.
Though state lawmakers last year voted to cut benefits and raise premiums for newly hired state and local workers (newly hired non-sworn state and local workers, that is; well-connected police and fire unions fought off much change), the state did nothing to alter benefits for those already retired or on the payroll, even if they were hired the day before the new law took effect.
As a result, collective unfunded liability in the state's own employee pension funds is running something north of $85 billion. For Chicago and related governments such as Chicago Public Schools and the park district, it's $14.7 billion. And there are additional billions if you add in Cook County and some other local units.
The best news is that this crisis finally has caught everyone's attention in Springfield. When, for instance, the Teachers Retirement System says, as it did recently, that its ability to pay full benefits is at risk, people listen.
Ergo, Mr. Quinn formed his task force, with aides saying he's determined to push reform because he realizes priorities such as schools are being crowded out as pensions grab all the money. House Speaker Michael Madigan declares he wants to act, and last week he unveiled a proposed constitutional amendment to require any hike in pension benefits to be approved by a super majority. Even Senate President John Cullerton lately has said that benefits might be cut if unions agreed to do so at the bargaining table in exchange for something else.
But, if you'll recall, House GOP Leader Tom Cross and Mr. Madigan agreed well more than a year ago to run reform legislation that would apply to current workers. “I'm fully supportive of the bill,” the speaker said then. Yet, the measure never has been called for a vote amid mutual finger-pointing.
Similarly, one top Republican in the middle of all of this says the real problem is that Mr. Quinn isn't willing to spend political capital. And one top Democrat in the middle of all of this says the real problem is that Republicans would rather have a good political issue than solid reform.
So, I'm not expecting a heck of a lot April 17.
Oh, surely there will be some tut-tutting over how bad the problem is and how much we need to solve it now so the school kiddies can get educated and businesses can be persuaded to expand here rather than flee in disgust to Indiana. And they'll likely lay out some ways to balance the books, such as raising the retirement age, trimming health insurance for retirees and dumping the minimum annual 3 percent cost-of-living hike now built into state pensions.
But we already knew that. What we need now is a specific plan and politicians who are willing to sign on the dotted line in support.
Like I said above, I do, I do, I do believe—as soon as they actually do it. Prove me wrong, Springfield.