Don't run from a fight

Sunday, April 18, 2010

"Cost reductions in future decades are a step in the right direction.

"But Illinois faces fiscal implosion — right now. Our state's pension system is unsustainable — right now."

— R. Eden Martin, Civic Committee,Commercial Club of Chicago

To hear Gov. Pat Quinn boast last week, you'd think a bill he signed into law solves Illinois' worst-in-the-nation pension funding fiasco. Sorry. By offering less generous benefits to future public employees, this bill should prevent some problems many years from now. It doesn't, though, solve — or even relieve — the current crisis: The state still has unfunded pension and retiree health obligations of some $130 billion, and its current annual pension costs don't decline. Legislators need to cut those current costs before their session ends.

We say this while applauding lawmakers and Quinn for the bill the governor signed. It took some courage to buck public employees unions, which are feigning oblivion to the fact that Illinois can't pay its bills — let alone cover retirement benefits more lavish than what most private sector workers could fantasize. We do, though, wish we'd been in the room when somebody cut a deal to exclude future police officers and firefighters from the new scheme. We also wish it didn't include a carve-out that only worsens the unfunded obligations of Chicago Public Schools.

As we wrote when legislators passed this bill in March, a logician would say it's necessary but not sufficient. A hungry logician would say it's not even half a loaf. It's a nice, firm crust — cut way too thin.

Quinn says the law eventually will save $220 billion, although by then today's taxpayers will be flapping wings and strumming harps. And, even though current pension costs don't fall in the short run, Quinn's budgeteers view the far-off savings as a reason to shave pension funding by $400 million a year. Same old Illinois: Any excuse to delay.

Quinn and Senate President John Cullerton have been dismissing suggestions that they trim current pension costs by reducing pension earnings going forward for today's employees. Both Democratic leaders say they've been told doing so would be unconstitutional. How convenient for the pols, for the unions — for everyone, that is, except taxpayers.

Chicago law firm Sidley Austin, citing Illinois case law and a 1979 Illinois attorney general's opinion, has concluded that the state can reduce pension benefits that employees will earn in future years. Former federal Judge Abner Mikva and former state appellate Judge Gino DiVito counter that Sidley is wrong, that employees are entitled to retire with the pension scheme that was in place on the day they were hired.

What we can conclude from all this is that … lawyers often don't agree. We resolve these issues by going to court. For taxpayers, the stakes are enormous — potentially the difference between state government's return to solvency and rising pension costs that choke spending on education, health and other priorities.

Gov. Quinn, Senate President Cullerton and House Speaker Michael Madigan: You can fight to protect Illinois from fiscal collapse by passing legislation to downsize current employees' future pension earnings. That could save billions of dollars a year. Or you can surrender without a peep, protecting the pension accruals of legislators, judges and other current employees.

We hope you won't run from a fight because some legal minds say you'll lose it. Other legal minds say you'll win. Governor, we realize that you in particular get spooked when someone even whispers "lawsuit." That terror kept you from firing two members of the University of Illinois board of trustees after last year's admissions scandal.

Gentlemen, Illinois taxpayers provide the attorney general's office with 338 lawyers. Give a gutsy handful of them a chance to defend legislation that reduces those billions of current pension costs. As is, our makers of laws instead are making sure no court gets to consider which side of this debate is dead right — and which one is dead wrong.