State employee unions say the leading proposals to fix Illinois' public employee pension systems are all fatally flawed, so they proposed their own plan.
Workers point out any attempt to plug the $96 billion funding shortfall must respect the state Constitution, which says benefits "shall not be diminished."
The proposals backed by Governor Pat Quinn and other political leaders attempt to get around that in order to cut retirement benefits. But AFSCME Legislative Director Joanna Webb-Gauvin said those ideas will ultimately fail in the courts.
Republican Illinois State Senate candidate Randy Frese of Paloma said the state's pension problems are a sign of broken government, which he said was caused by a lack of leadership.
Frese said the pension reform program in Rhode Island could serve as a template for Illinois. He said Rhode Island raised the retirement age, froze the cost of living adjustment (COLA), and implemented a 401K style plan. Frese said the state did so long before it got into a financial hole as deep as the one in Illinois.
Conservative estimates indicate Illinois is $83 billion short of what it has promised state workers in retirement benefits. But Ralph Martire of the Center for Tax and Budget Accountability said said there is nothing inherently wrong with the state's pension plans.
He said the problem is that for 40 years the state “borrowed like a credit card” from pensions to pay for other services. But instead of acknowledging that, state leaders and lawmakers have played politics with the issue.
It's doubtful Illinois' pension crisis will be resolved soon.
Legislative leaders and the governor met Thursday, June 21 to discuss whether the state or local school districts should pay retirement costs for downstate and suburban teachers. The state picks up the tab now, but it doesn't pay for Chicago teachers' retirement benefits.
After the meeting, top lawmakers said they're going to spend five weeks studying school funding equality. Then they'll work on what to do about Illinois' hugely underfunded government pensions.