Six years ago the Illinois Supreme Court ruled our teacher pensions could not be diminished or impaired. The Republicans weren’t listening and they’re back at it.

WBEZ is reporting:

(House Republican Leader Jim) Durkin, who had only been elected House GOP leader a few months before the pension vote, now wants a do-over. But he blames the majority party for burying their heads in the sand.

“Right now I don’t get a sense of urgency out of the Democrats to say that we’re going to stop this insane, insane appropriation to our pension systems without at least reining in the cost,” Durkin said. 

Durkin says he wants to at least try to pass the other option lawmakers could have gone with in 2013: a negotiated pension reform dubbed the “consideration model” in which organized labor would agree to certain cuts in pension benefits. Then Senate President John Cullerton championed the approach, but ultimately lost out to Madigan’s proposal.

McConchie agrees, noting the extreme political unlikelihood that Illinois’ constitution would be amended to weaken or remove the pension protection clause — an idea floated by groups like the libertarian-leaning Illinois Policy Institute. McConchie says attempting a negotiated settlement would at least help guarantee both the state’s pension systems and smaller municipal pension systems don’t implode for future generations of public employee retirees like teachers.

“We need to have reforms that actually get our pension systems onto the track that they can fulfill the promises that were made to the people who essentially have put all their eggs in that basket,” McConchie said. “These people do not qualify for Social Security…And if counted on this pension, we need to do what we can to guarantee them that their pension will be there long-term.”

Harmon, however, poured cold water on the idea of ever attempting to reduce pension benefits again, saying it’s futile. Harmon believes that not even changing the state’s constitution would erase the state’s legacy pension debt — meaning the pension liability accrued up until the moment the constitution was amended. He also believes the consideration model would be found unconstitutional based on the 2015 decision, which he read to mean the pension protection clause is ironclad.

“Those benefits are protected, not only by the pension clause, but also by the contracts clause of the state constitution and the United States Constitution,” Harmon said. “So there are a lot of people who would like to wish away the Constitution when it’s inconvenient, but the short answer is on the legacy debt, we’re going to have to pay it.”

The Democrat says not enough attention has been paid to a pension change made a decade ago that created a second tier of state employees hired after Jan. 1, 2011, who are entitled to much less rich pension benefits “so low, in fact, that [the federal] Social Security [Administration] may ding us in forces to raise some of those benefits,” Harmon said. Over time, he said, those changes will make a significant difference to the state’s pension debt.

“It’s a problem that took a century to get into this deeply,” Harmon said. “It’s gonna take decades to get out.”

Welch is honest when he says he doesn’t know how to solve Illinois’ pension woes. He said he felt the weight of his vote for the 2013 overhaul as a “labor guy” but knows “something has to be done to address our pension [debt].”

Changing the state’s constitution isn’t palatable to Welch, but he didn’t close the door on trying to negotiate with labor again. Finding a solution, Welch said, would require “everyone around the table.”

In February, Welch floated trying again for a graduated income tax but guaranteeing the revenues would go toward paying down the state’s pension debt. 

“Certainly I think that we need to drive more revenue into our budget,” Welch said. “I’d like to figure out ideas on where the revenue could come from.

A word about the “consideration model” and the unions “having a seat at the table” to bargain it.

Because our current retirement benefit is contractual as well as a constitutionally guaranteed, in order to change the contract, something must be offered of equal or greater benefit.

Want to reduce our yearly 3.5% compounded COLA? The state must give us something as good.

But that brings us to whether the leaders of the teachers’ unions (IFT, IEA, CTU) can bargain consideration on behalf of those of us who are no longer members.

I agree with legal experts who say they cannot.

Prior to the court’s ruling in 2015, the state’s entire public union leadership supported State Senate President John Cullerton in trying to pass a “consideration model” of pension cuts.

Because House Speaker Madigan had his own ideas about pension theft, Cullerton’s plan, supported by the union leaders, bargaining consideration didn’t go anywhere.

It isn’t going anywhere now, either.

The current Senate President Don Harmon is mostly right about this.

“Those benefits are protected, not only by the pension clause, but also by the contracts clause of the state constitution and the United States Constitution,” Harmon said. “So there are a lot of people who would like to wish away the Constitution when it’s inconvenient, but the short answer is on the legacy debt, we’re going to have to pay it.”

What Harmon is referring to, what he calls “the legacy debt” is the $140 billion plus pension liability that exists because even now the legislature fails to pay their share of the actuarial costs of our pensions.

I have no sense that they feel they “have to pay it.”

They can continue to pay the yearly normal cost, what each current retiree receives, and wait for us to die out.

Problem solved.

But Tier 2 is not so easily fixed.

When the first of the Tier 2 teachers retire and their pension isn’t there, the stuff will definitely hit the fan.

5 thoughts on “Six years ago the Illinois Supreme Court ruled our teacher pensions could not be diminished or impaired. The Republicans weren’t listening and they’re back at it.

  1. “They can continue to pay the yearly normal cost, what each current retiree receives, and wait for us to die out.
    Problem solved.”
    You guys are the best. Having had two very serious brushes with what could have been deadly situations, my personal awareness of mortality and vulnerability is always present. Today, I am better and healthier than I have any right to expect.
    The fact that the WBEZ report is about continued attempts at attacking our pensions is proof of the corruption we call government. Politicos of both parties do not think of us as fellow human beings. Fortunately, we won in the Illinois Supreme Court. Luckily?
    You guys did all the heavy lifting and thousands of our colleagues will never know how much they are beholden to you. Being a hands on kind of a person, I still wish that I could have been of more help to you during that arduous process. Being over a thousand miles away from you has its drawbacks.
    It’s nice being able to look forward and past these political snarls. I too believe this is going nowhere.
    It’s like the 90+ year old drivers in Florida. They don’t do reverse.
    And neither do I.

  2. Couple of thought’s here:

    All pension benefit in Illinois over $50k per person needed to be taxed and put in a fund solely for the purpose of of retiring pensions debt- this needs to taken out directly and no one can touch it.

    Pension benefit in total need to be looked at by person as may of these folks have several pension plans including Social Security and 401k distributions.

    Illinois should collect from anyone they are paying – including out of state.

    Too many people have played kick the can here for decades – it is time for everyone to start to to pay. This idea keeps the folks with lesser benefits whole and the taxes the for the high income/benefit people fairly.

    Illinois needs to realized the debt is massive and these this old favorable treatment of skipping taxes on retirement needs to change.

  3. Dear Canon649,
    Congratulations. You have a perfect name.
    You shoot off your mouth about things you know nothing about – such as arithmetic.

  4. With all the talk/analysis the results are the continued expansion of the debt.

    My thoughts are a Start – not the entire solution – but it it doable now.

    Nothing wrong with my math

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