Pension reforms must seep down to local level

Wednesday, September 22, 2010

Western suburbs — Given the state of our economy, many people are asking, “How secure is my nest egg?”

Public employees are no different. Much of what they have socked away for retirement depends on prudent planning by government bureaucrats, and that can’t make them feel good.

Illinois has more than $76 billion in unfunded liabilities for the pensions of its workers. That’s enough to keep people awake at night worrying about their future.

Earlier this year, Gov. Pat Quinn signed a reform bill affecting new state employees. The measure mandates that retirees reach the age of 67 before they can draw full pension benefits, and it caps pensionable salaries at $106,800. This law does not affect those employed by the state before it was signed.

Meanwhile, municipal officials believe further changes must be made to the pension system. They’re concerned about how the state affects the funding of pensions for municipal employees. An advisory referendum will be on the ballot of many suburban towns in the November election.

The referendum asks if lawmakers should implement additional reform measures that would “relieve the extensive burden on local taxpayers.” The question on ballots in several communities focuses on reforming public-safety pensions, but the referendum doesn’t make any such distinction in other towns.

The state mandates how much municipalities must contribute to pensions, and those municipalities depend primarily on property taxes for the funding. At the same time, the state caps the amount that towns can levy. So, local officials believe they’re in a real bind.

State officials should implement pension measures that relieve the burden on local taxpayers. They’ve been kicking this can down the road for too long, and it’s time to fix the problems. Although these referendums are only advisory, passing the measure would send a strong message to those who got us into this mess.