AN ARCTIC COLD FRONT PREDICTED FOR HELL!

4/24/12



As loyal readers might suspect, I have been looking long and hard at Illinois Governor Pat Quinn’s (no relation) plan to reduce the Prairie State’s pension liability. Given that the plan was concocted by Governor Quinn (no relation), there has to be at least something in there I don’t like. I haven’t yet found anything yet. I’m sure we all will, before this thing is over, hear lots of largely gormless “Nixon to China” parallels, and there may be something to such analogies. Still, how can Governor Quinn (no relation) and I agree on anything, other than the obvious merits of the Catholic League, let alone something as monumental as this proposed legislation? The answer, I must admit, almost forlornly, is that I suppose we can; this is an outstanding proposal that merits the support of anybody who is concerned about the future of our state and especially of those who call themselves conservatives, whatever that means nowadays.



As you doubtless know, the Quinn (no relation) legislation, in very summary form, offers state workers, including teachers in suburban and downstate districts, a new pension plan, the features of which include



--increased contributions by the employees to their pensions,



--annual cost of living adjustments to pensions that are limited to the lesser of 3% or half the rate of inflation,



--a gradual phase-in of a retirement age of 67 years,



--as a means of encouraging public employees to stay on even before the above retirement age is phased in, a delay of cost of living adjustments to pension payments until the pensioner has been retired five years or has reached the age of 67, whichever comes first,



--making cost of living adjustments using simple, rather than compound interest This is a much larger item than it appears at first glance.),



--restricting earned pension years to those years in which the pensioner was on the public payroll. (This provision is designed (We’ll see how it works out in practice.) to forestall the shenanigans which permitted union leaders to count time served working for their union towards their public sector pensions.), and



--a requirement that pensions be funded according to numbers (i.e., mathematics and the actuarial tables) rather than to the whims of the legislator and their henchmen in the executive branch.



To get around the Illinois Constitution’s forbidding “retroactive” changes to pension provisions, the Quinn (no relation) plan allows employees to stay in their current pension plans. But if they do, any increases in their salaries after the choice to stay in the old plan will not result in increases in their pension payments. More importantly, if they opt to stay in the old plans, they will forgo their retiree health care benefits; retiree health benefits are not constitutionally protected. This was a clever, and gutsy, move on Quinn’s (no relation) part.



Taken together, these proposals, according to Quinn’s (no relation) people, will result in full funding of the Illinois public pensions by 2042 , as opposed to the current projection of 80% funding by 2045. More important, reining in pension costs will allow the state to spend money on things other than pensions in the future.



This Quinn (no relation) proposal has received, so far, broad support. Senate President John Cullerton has come out in support. I haven’t seen anything indicating how House Speaker Mike Madigan feels about it. Mr. Madigan may have said something, but I just haven’t seen it, or this could be just another case of the man who runs this state holding his cards very close to his proverbial vest; I’d bet on the latter. And the Republicans, to their credit, for the most part have come out in favor of at least the broad outlines of the proposal, which should come as a surprise only due to the identity of the proposal’s “author,” not due to its substance.



Except…



There are some Republicans who have already declared opposition to the bill. Why? Because there is a provision in the bill that hints, albeit obliquely, that the state will soon require suburban and downstate school districts to pick up the pension costs of their teachers. Currently, the city of Chicago bears the pension costs of teachers in the Chicago Public School system but the state picks up the costs for all other districts. Addressing this curious disparity seems fair, at least to this observer, but some Republicans don’t like this provision at all. Why? Because they presuppose that asking their school districts (Republicans in the Illinois state legislature come almost exclusively from suburban and downstate districts.) to pay their own pension costs seems somehow unfair to these champions of local government and personal responsibility. Not expecting the state to provide them with the free lunch they have come to expect might even result in a property tax increase, and the GOPers feel obligated to stand four square against any tax increase.



There is probably no one more opposed to tax increases than yours truly. But what may be required, in this instance, indeed may not be a tax increase but just some hard choices to be made at the local level, where the Republicans claim they would like as many government choices as possible to be made. Instead of raising taxes to cover the pension costs these districts would have to eventually cover as part of this legislation, perhaps the districts, at their discretion (emphasis mine to make sure those GOPers who are wailing about a possible tax increase as a result of this bill while proclaiming the efficacy of and their fealty to government at the most local level possible can see clearly their utter hypocrisy on this issue), will cut teacher salaries or other programs (Believe me, as a father of students in a fairly typical suburban district, there are PLENTY of programs in a typical suburban school that could easily be cut while having no, or even a positive, effect on the educational experience.) This would result in less government spending, smaller government, and local control of schools, all things the Republicans purport to champion. Should a district decide that it can find no cuts (They just aren’t looking hard enough—MQ) to compensate for the additional expenditure involved in picking up its own pension costs, then there would have to be a property, or other local, tax increase. But that would be the decision of the local school district, not the state.



Further, having the local school districts cover their own pension costs might cause them to be a bit more circumspect when it comes to pensions at the negotiating table. It is amazing how spending one’s own money can cause one to focus on what is being purchased or negotiated. This wonderful adjustment of incentives alone would go a long way toward solving our pension problems.



Again, to their credit, many Republicans, including, it appears, the Republican leadership, in this state are behind Governor Quinn’s (no relation) pension proposals. But that plenty of GOPers are against the proposal simply because it might result in a property tax increase, and only if local officials lack sufficient fortitude to stand up to the teachers’ unions, is testimony to the hypocrisy that is so prevalent among all politicians, but especially to those who wear the Republican brand. They are all for smaller government…until it is one of their oxen that is being gored.