The Illinois Policy Institute, one of our state’s most influential sources for disinformation on taxes, pensions and unions, has come out with their latest talking point about teacher and public pensions.
The IPI claims that 40 cents of every education dollar goes to pensions.
Don’t underestimate the power of an IPI lie. The IPI had a major role in defeating the fair tax amendment to the Illinois constitution last November by spreading lies that even my teacher colleagues believed.
In order to make the claim that 40 cents of every education dollar the IPI had to invent a new definition of the education budget.
The legislature doesn’t consider their pension obligations and education to be in the same category or budget line.
That is an IPI invention.
It would be like claiming that 40 cents of every education dollar in the state budget was spent on healthcare since roughly the same amount is budgeted to both healthcare and pensions.
That would be a lie too.
According to the actuaries hired by the Teacher Retirement System the budgeted payment by the state was insufficient to reduce the pension liability even by one cent.
$1.18 billion went for normal costs (the costs related to paying the actual benefit). It amounted to 20% of the pension budget. 80% ($4.6 billion) went to pay for the debt on the unfunded liability.
Decades of pension holidays, where the state paid nothing of their pension obligations, and shorted payments where the state paid an imaginary statutory number, has created a budget that is out of whack.