Dear Elaine Nekritz:
It is easy to construct victims with a dubious call for “sacrifice.” Of course, by “sacrifice,” you and Dick Ingram, Civic Committee members and their ilk, and many other Illinois legislators mean only public employees. Surely, you can see that to victimize teachers again and again is reprehensible.
We are told that to fix the Teachers’ Retirement System teachers need to compromise through “consideration” and make additional sacrifices. We know you are aware that the “sacrifice” you call for entails changing the public employees’ constitutionally-guaranteed pension by way of a bill that mitigates earned benefits and deprives legally-guaranteed rights.
Is it a “Shared Sacrifice” when a governor rolls back the billionaire’s and millionaire’s taxes and then lacerates the state’s school budget while also attempting to diminish a public employee’s pension? Is it a “Shared Sacrifice” when, for most teachers, their pension plan is their only retirement subsidy because they cannot receive Social Security benefits? Is it a “Shared Sacrifice” whenlegislators and their lawyers want to change an existing contract, one that is not made compulsory on them, to one that forces teachers to accept an “impairment and diminishment” of their constitutionally-guaranteed pension and retirement rights?
You asked last night, “Why wouldn’t We do that (sacrifice)?” “We” means that only teachers bear the burden. The question makes a false presumption and demands a simple answer to a complex problem. It’s an attempt to divert everyone’s focus from real solutions for the state’s revenue and debt problems.
It’s obvious that you, many members of the Illinois General Assembly, and members of the Civic Committee of the Commercial Club of Chicago, et al. do not know the meaning of the word, “sacrifice.” Sacrificing teachers (and other public employees) doesn’t address the revenue and pension debt problems in Illinois, but these legal and moral solutions do:
· The current “Pension Ramp” does not work for the five public pension systems. The “Ramp” entails larger payments today as a result of the 1995 funding law – Public Act 88-0593 – to pay the pensions systems what the state owes. The pension debt needs to be amortized for a longer frame of time (a flat payment) “just like a home loan that is amortized.” Though the initial payment will be greater in the beginning, over the long term it will become a reduced cost and a smaller percentage of the overall Illinois budget as it is paid off throughout the years;
· Raise revenue to pay the state’s debts. With a constitutional amendment, “given an appropriately designed graduated-rate structure, Illinois could cut the overall state income tax burden for 94 percent of all taxpayers—on average providing a tax cut to every taxpayer with less than $150,000 in base income annually, raise at least $2.4 billion more in revenue, and keep the effective individual income tax rate for millionaires well below five percent… Illinois taxpayers with the bottom 94 percent of base income collectively would receive an annual tax cut of $1.06 billion… [T]he combined effect of this policy would be a stimulus to the economy from tax cuts and additional state spending (assuming that the additional revenue is used to fund current public services that would otherwise not be funded) that would create at least 36,000 private sector jobs in communities across Illinois…” (Executive Director Ralph Martire, Center for Tax and Budget Accountability, CTBA);
· “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 Constitution of the State of Illinois). There needs to be a required annual payment from the state to the pension systems;
· Tax services. Broaden the sales tax base to include selected consumer services. Illinois is one of five states with sales taxes on fewer than 20 services (The Center on Budget and Policy Priorities)
· Eliminate the tax loophole for “Tax Increment Financing Districts”;
· Eliminate “Edge Tax Credits” and other tax loopholes for large corporations in Illinois;
· Increase taxation on the wealthy: Illinois is in the top 10 of regressive state tax systems where the wealthiest taxpayers do not pay as much of their incomes in taxes as the poorest and middle-income wage earners (The Institute on Taxation and Economic Policy);
· Implement a more timely system of payments (cash management practices are greatly affected by budgetary practices in relation to deferred liabilities which place additional pressures particularly in the first and second quarters of the year to pay those expenses; timing of tax payments also affects the state’s cash flow and should be adjusted accordingly);
· Shifting the state’s “normal costs” for the public pension systems to school districts will have negative consequences. “Property tax bases would not be sufficient to absorb any shift in the employer normal cost for teacher pensions… School districts are demographically and financially varied, and it would be difficult to impose a uniform normal cost shift on them… Illinois ranks last in terms of state spending on K-12 education, and school districts are already relying heavily on local property taxes… While shifting the state’s normal cost obligations onto school districts may provide some relief to the state’s budget, it will not mitigate these financial obligations and will instead push them onto school districts that, on average, already derive the majority of their revenue from local sources” (CTBA). The state should continue to pay the normal costs for the five “public pensions.”
· Examine and improve the efficiency of the state’s government. This includes establishing term limits for Illinois legislators.