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Evergreen Park and the pension cost shift.

October 1, 2012

Can I absolutely prove that the proposals by some politicians, mostly Democrats, to shift the pension obligation from the state to local districts has provoked at least one strike and threatens to provoke others?

No. But I’ve been at this game long enough to have a strong feeling about it.

A reminder about the pension obligation.

Things get a little screwy here. So pay attention. And if I mess up the explanation, I always have my friend Glen Brown to straighten me out.

The state constitution requires that teachers and other state employees who pay into and are members of one of the state’s pension systems must receive those pensions and the benefits.  In the words of the constitution, those benefits cannot be “diminished or impaired.”

But the constitution does not require that the state pay for it.

You are now probably asking yourself, “What the hell?” And I understand. But this little loop hole has led Governor Quinn, State Representative Elaine Nekritz and other Democrats to propose shifting the cost of the pension obligation to local districts. I mean they already owe us $85 billion. So they probably figure it is now somebody else’s turn.

The state’s Republicans think taxing anything is a sin. They think government is a sin. They think public schools are a sin. Which is probably why they want us praying in them all the time.

And they are also terrified of suburban taxpayers who already are overburdened by local property taxes. Those local property taxes go mainly to public schools. Republicans are against the shift. So are a few Democrats for the same reason.

Off topic for a second. I also think local residential property owners are overtaxed. You may recall a few years ago House Bill 174 was being debated in Springfield. It would have lowered local property taxes in exchange for a small increase in the state income tax. This would have moved us to a more equitable funding of schools.

If the state combines that with a graduated income tax instead of the existing punitive flat tax (Punitive on the poorest of our citizens.  A gift to the richest.) much of our funding problems would be solved.

Okay, back to the cost shift.

The problem is that just having the pension cost shift proposal sitting out there is enough to give local school boards the excuse to hoard their money. It doesn’t even have to pass the General Assembly.

Not that some local school board members like Park Ridge’s Anthony Borrelli need an excuse. He thinks public schools should run on vapor. Even though Park Ridge is running a 40% budget surplus.

And the recent strike in Lake Forest was about salary and benefits even though the district is running a budget surplus.

And tomorrow teachers in Evergreen Park, a southwest suburb of Chicago, may walk out over salary and benefits, even though the district is running a budget surplus.

See a trend here?

5 Comments leave one →
  1. October 1, 2012 2:47 pm

    1975 People ex. Rel. Illinois Federation of Teachers v. Lindberg
    …can’t force the Illinois General Assembly to fund the pension systems at a specific percentage

    1996 McNamee v. State
    Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system. The case asks questions whether “the Pension Clause [Article XIII, Section 5] mandates that the pension systems be funded at a particular funding percentage or according to a funding schedule.” The Pension Clause “creates an enforceable contractual relationship that protects only the right to receive benefits… a cause of action would exist if legislation diminished a person’s right to receive benefits or placed the pension system on the verge of default or imminent bankruptcy”

    1998 People ex. Rel. Sklodowski v. State
    Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system. “Clause does not create a contractual basis for participants to expect a particular level of funding [You got to be kidding?]!”

    Yes, we are guaranteed benefits but not the funding of those benefits!?

    From “Antedated Court Cases: Challenging the Pension Clause, etc.”:

    http://teacherpoetmusicianglenbrown.blogspot.com/2011/05/antedated-court-cases-challenging.html

    • Fred Klonsky permalink*
      October 1, 2012 2:58 pm

      I knew I could count on you, Glen.

  2. October 1, 2012 6:44 pm

    Ditto.

  3. Edie Wade permalink
    October 1, 2012 7:17 pm

    So if the pension costs are shifted to the local districts, what mechanism or law will prevent them from also not funding the system? Why can’t they do like the state and ignore their obligations?

  4. October 2, 2012 1:19 pm

    Dear Edie,

    Disclaimer: This is from an English teacher’s perspective and not from a lawyer’s analysis:

    “The State shall provide for an efficient system of high quality public educational institutions and services… The State has the primary responsibility for financing the system of public education” (Article X, Section 1 of the Illinois Constitution).

    If we interpret “financing the ‘system of public education’” to also mean financing the teachers’ pension system, because “The State shall provide for an efficient ‘system’ of high quality public educational institutions and services” and efficiency and “high quality” services should entail a teacher’s pension, then we have an argument to bring forth to the courts.

    It will depend upon the courts’ interpretations and what exorbitant money and power can influence, nevertheless.

    Most likely, school districts will not become deadbeats like Illinois policymakers. School districts will freeze teachers’ salaries indefinitely, increase class sizes, cut programs, and eliminate teacher positions, etc. in order to make those pension payments, however. You can also believe that property taxes will increase as well.

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