The following commentary is from the Southland Star. It is written by my good friend and colleague, Jerry Mulvihill, a 5th grade teacher in my old school district. Jerry lives in Alsip, is a former school board member, public school and union activist and father of two students in Southland public schools. From what I hear, he also throws a good curve ball as pitcher on his amateur league baseball team.
Legislators have reconvened in Springfield to again attempt to fix the state’s spiraling budget deficit. Central to their focus will undoubtedly be a Madigan-led pension reform package.
Madigan (D-Chicago) has spelled out his recipe for pension reform often in the media, saying that it must include eliminating the “free lunch for local school districts.”
That refers to his proposed “cost-shift” plan, which would place responsibility for financing the Teachers’ Retirement System, the pension fund for suburban and downstate teachers, on school districts rather than the state.
By skirting what historically has been a duty of the state, Madigan, Senate President John Cullerton (D-Chicago) and Gov. Patrick Quinn will be forcing suburban taxpayers to pay for the Legislature’s failure for many years to properly fund TRS, the state’s largest pension fund.
The cost-shift plan was developed by some of Illinois’ top corporate leaders, including the Civic Committee of the Commercial Club of Chicago and its millionaire president, Ty Fahner. The plan is remarkably one-sided — proposing to fix the underfunding of TRS on the backs of middle-class Illinoisans.
Legislators have reconvened in Springfield to again attempt to fix the state’s spiraling budget deficit. Central to their focus will undoubtedly be a Madigan-led pension reform package.
Beyond cost shifting, some other proposed reforms will not only have a direct negative impact on thousands of teachers’ promised retirement benefits but also on the fiscal health of local schools. Among the other ideas are eliminating cost-of-living increases for retired workers, limiting access for retired teachers to health care and increasing the retirement age.
How will this affect taxpayers and their public schools? Simple. By allowing the state to default on its legal obligation to fund TRS, the plan would leave school districts with little option but to levy the maximum annual amount in tax revenue from property owners to meet this extra cost.
A recent visit and phone call to my legislators, state Sen. Ed Maloney (D-Chicago) and state Rep. Bill Cunningham (D-Chicago), revealed their lockstep position with Madigan (also state Democratic chairman) on the pension cost shift.
Despite the results of an October poll by the Chicago Tribune that indicated most voters surveyed statewide oppose the cost-shift plan, support for it is strong among Democratic lawmakers in the Southland.
It’s unfortunate that they favor solutions that are not based on the interests of local voters but rather on what’s advocated by Madigan and his friends among Illinois’ wealthy elite.
Missing from the Madigan/Fahner proposals are any of the more stable solutions for the state’s long-term budget sustainability suggested by organizations such as the Center for Tax and Budget Accountability. The CTBA’s framework, which has been virtually ignored by legislators for 20 years, suggests increasing Illinois’ tax revenue by a change in tax policy.
One of the center’s key findings is that the state’s dismal fiscal condition is the direct result of a tax system that fails to correspond with an “ability to pay principle.” In other words, Illinois’ tax code, most notably the income tax, is one of the most regressive in the country, according to the center.
Where do your legislators stand on these issues? It’s likely they feel they must go along with Madigan and Cullerton despite pressure from their constituents to not do so.
Southland Democrats in the House and Senate appear willing to sever the long-standing alliance between their party and working- and middle-class citizens.
Will Southland Democrats push in the final days of the current Legislature to abandon the cost-shift plan, limit corporate tax breaks and amend the Illinois Constitution to adopt a progressive income tax?
Or will they continue to pay homage to party leaders and follow their directives?
I think we know the answer.
Fred Klonsky 
I am confused about the outcry around the cost shift. Why should Chicago taxpayers pay for CPS pensions through property tax AND TRS pensions through the state income tax? Please explain why this is fair.
I am opposed to any reduction in pensions earned and promised and I believe state should replace the money plus earnings for the year it failed to fund pensions. It appears that the underfunding, the recent history of underfunded pension enhancements given by local districts and the downturn in the market all contributed to the mess we are in.
I do not support any pension cuts but do support a focus on refunding the penions. We need ideas to accomplish this. Can we come up with ideas to make this happen? What is the dollar figure needed?
Taken as a whole, the state’s tax system is a fiasco. We cannot address the issue of who meets the pension obligation without addressing the entire system of how schools AND pensions are funded. A cost shift without addressing the broader tax issue will have consequences that are equally unfair, if not more so.
Two things:
1. There must be a move to a progressive graduated income tax so that the poor, the working people of the state and the millionaires are no longer taxed at the same rate. Taxing poor people at the same rate as the rich is stupid. The poor have no money. The state cannot pay its bills so long as we have a flat income tax system.
2. Fairness requires that both funding schools and funding pensions should be a greater obligation of the state, funded through a graduated income tax, rather than dependent on local property taxes. The current system of funding schools through local property taxes means that the quality of a school is determined by where the student lives and is discriminatory. Funding pensions locally will mean that public employees will see their incomes decline, as local districts and municipalities will be unable to sustain both competitive salaries and pay the pension obligation. There is not enough money at the local level to do both. Teachers will leave the profession.
All this pension drama, worry and heartache for thousands, I believe is just another spin by the wealthy to keep the political conversation focused off the need for a graduated state income tax in Illinois. Job losses in the local economy would be huge if pension benefits are stalled. I am amazed how WTTW has been a primary venue for this rhetoric and “story”. The New York Times got it right, Illinois has a funding problem, not a pension problem!
Kader and I are the one-two punch in today’s SouthtownStar and he does a great job of addressing Ann’s (above) question. http://southtownstar.suntimes.com/news/kadner/13425809-452/suburban-tax-rates-double-those-in-chicago.html