“Because for over fifty years the state either hasn’t paid what they owed or used TRS funds to build bridges, roads and, ironically, schools without raising taxes.”
I’m going to disagree with this as any politician in office now will tell you that we need roads and bridges and schools too, and your pension just costs too much to afford these important bits of infrastructure. This is a straw-man argument used to divide Illinois voters.
The state largely didn’t build bridges, roads or schools with this practice, but instead cut funding to these projects or privatized them or diverted their cost to local tax payers. Toll roads were extended so now we have more miles of tollways Illinois residents have to pay ever increasing fees to drive on. Bridges outside the toll roads were largely left to crumble or wait their turn for federal highway funds. Schools were also left to crumble or have renovations paid for by local tax payer funded referendums. If these referendum passed the cost was transferred to local tax payers, if not, too bad for the students.
What the state did by shirking its responsibility to fund pensions was to keep tax rates artificially low to support a regressive fixed-rate tax structure. A tax structure that is only a handful of states in the US still support. A tax structure that sees a family earning $40,000 pay the same tax rate as a millionaire making $4,000,000. A tax system that is outdated, favors the affluent, and creates a structural deficit in Illinois budget that has resulted underfunding for roads, bridge and schools for decades.
What the state did by shirking its responsibility to people like teachers, firefighters and police officers was also to subsidize corporate profit margins. Those in Springfield were able to divert pension funding to corporate giveaways to businesses making nearly $1 Billion in profits or business that threatened to cut a few hundred jobs at the expense of needed social services if they didn’t get their extorted tax breaks – who then cut jobs anyway. To pay for these subsidized profits, necessary and important public sector services were cut and the Illinois taxpayers who filled these jobs were laid off by the thousands.
Don’t make the mistake of thinking that pension funds were diverted because Springfield politicians wanted to do something the majority of Illinois residents needed and elected them to do. Springfield politicians diverted the money earned by pension recipients to keep their influential donors’ tax rates low and profit margins high and thereby advance their political careers.