Riders, mount your steeds. Today let us talk about COLA.
Graphic: Chicago Reader
I was planning on doing a Monday post on the threats to Illinois teachers’ COLA, the cost of living increases that are a part of our TRS pension benefit.
How lucky then that my friend Glen Brown published Roger Sander’s piece on COLAs on his blog this morning too. Now you now have some important reading to do over your coffee.
Don’t expect to find this over on the IEA website. They have been amazingly silent on this.
As of this moment there are two big threats to our pension cost of living increases.
Constitutional Amendment 49 that will appear on the November ballot and SB 1673.
Last year the Chicago Reader’s Ben Joravsky called me the Paul Revere of SB 7.
I’m back on my horse. And we have added some more Paul Reveres too. Like Roger and Glen.
We have mounted our steeds. “The attacks on our pension are coming!”
What is SB 1673?
If passed, the bill would require teachers to choose between their present guaranteed 3% cost of living adjustment or their health insurance benefit. Retired teachers in Illinois rely on TRIP, a state retiree health insurance. If we choose to keep TRIP, our cost of living adjustment would be reduced. If we keep our 3% COLA, our TRS creditable earning would be capped and no future salary increases could be used in calculating our retirement benefit.
The view of the political leaders in the state is that by providing a choice, the law will pass constitutional muster. Our state constitution prohibits any act that would diminish or impair our pension benefits. But is this a constitutionally acceptable choice if both options diminish and impair our benefits?
Roger’s article on Glen Brown’s blog gives more details.
The other threat to our pension and COLA is House Joint Resolution Constitutional Amendment 49 (HJRCA49). I will now forever refer to this at Constitutional Amendment 49.
Democratic boss and Speaker Mike Madigan rammed this through the House last Spring and got a 113 to nothing vote to put it on the November ballot.
If you have one of those liberal Democratic state representatives (oh, like Robyn Gabel up on the north shore), ask them to explain their vote on this for you and me. Let me know what they say.
Constitutional Amendment 49 is a basic bait and switch. The uneducated voter will read that CA49 requires a super majority three-fifths vote of both houses of the General Assembly to enact a benefit increase and they will think, “Who the hell is asking for a benefit increase in a time like this?”
But is the 3% COLA a benefit increase?
The Center for Tax and Budget Accountability says that the language is vague enough that a COLA adjustment could be considered a benefit increase under this law.
At the root of all this is the faulty premise that the source of the pension problem in Illinois is employee benefits.
It is not.
The source of the problem is the failure of the state to meet its funding obligations for the past four decades. It is a failure of revenue. It is not a problem of benefits.
Some will say, “Too bad. That’s water under the bridge.”
But to the retired teacher, a senior with TRS as their only source of income, it is not water under the bridge. It is food on the table, a gas bill paid, a roof over their head and the ability to see their doctor.
And a promise made to them many years ago.