Opponents of a constitutional amendment making it harder to raise public pensions in Illinois say it does “absolutely nothing” to fix the fact that the state is more than $80 billion behind in its contributions.
Proponents say it could help keep the backlog from growing, by requiring any Illinois governing bodies to muster a three-fifths vote — rather than a simply majority — to increase benefits.
The more-than-700-word amendment has caused uncertainty among some employees enrolled in state-administered pension systems — from prison guards to downstate kindergarten teachers. They fear that a vaguely-worded passage might erode a clause already in the Illinois Constitution that says a government pension is a contact “the benefits of which shall not be diminished or impaired.”
“It’s so poorly written … you talk to two different lawyers about what this means, you’re going to get two different answers,” said Dan Montgomery, president of the Illinois Federation of Teachers, which is against the amendment. “It’s bad law — and bad public policy.”
Lawmakers apparently saw it otherwise. They put the proposal on the Nov. 6 ballot by a 113-0 vote of the House and 51-2 vote of the Senate. It requires approval of either three-fifths of those voting on the measure or a majority of those voting in the election. Because of the math of that, the ballot contains a warning that, “The failure to vote this ballot may be the equivalent of a negative vote.”
Passage would mean that a pension increase would need 36 votes instead of 30 in the Illinois Senate, and 71 instead of 60 in the House.
But pension increases of the past typically surpassed those 60 percent thresholds. For example, a 1997 bill that generated substantial controversy by putting county employees on a fast track to large pensions received 96 percent support in the Senate vote and 91 percent in the House. (The vote in 2011 to repeal it was unanimous.)
The public pension plans are the only retirement benefit for state employees and non-Chicago teachers, who by law cannot pay into or collect Social Security benefits.
While employee payments are enforced by payroll deductions, over the years lawmakers created a deficit by diverting some the state’s payments to other purposes. The shortfall was exacerbated by the poor economy. By next summer, Illinois’ unfunded pension liability is expected to reach $93 billion.
According to the Illinois Policy Institute, pension under-funding costs the state $18 million a day.
Legislators tried to tackle that problem in a day-long special session over the summer, but nothing materialized.
Gov. Pat Quinn is pushing to shift the cost of future teacher pensions to local school boards, which pay almost nothing now. The controversial concept is expected to get closer legislative consideration after the election. Under that plan, the state would keep responsibility for the backlog. Schools officials have said they might be forced to seek to increase property taxes to pay for it.
The pension backlog has caused serious concerns with the state’s creditworthiness. Moody’s Investors Service, a credit rating agency, calls the pension crisis a “credit negative” aggravated by inaction.
The amendment was sponsored by House Speaker Mike Madigan, D-Chicago, whose office did not respond to calls seeking comment for this story.
Kent Redfield, an emeritus professor of political science at the University of Illinois at Springfield, said it appears to be aimed at school boards that ramped up salaries of teachers and administrators at the end of their careers to give them increases in state-paid pensions.
“This is a classic shutting the barn door after the horses are gone,” Redfield said. “It would prevent things that have already happened — mostly with large majorities voting — and does nothing dealing with the current situation, the liability.
“It’s diverting attention from the fact that they haven’t come up with anything to handle the pension shortfall.”
Doug Whitley, president of the Illinois Chamber of Commerce, said the pension systems were taken for granted for years by the Legislature while benefits increased and the program expended without any concern for how the state’s share would be paid. Any move to begin controlling it, he said, should be welcome.
“You can make the argument that the horse is already out of the barn,” he said. “Our attitude is OK, fine. But that doesn’t mean you need to keep repeating the same problem over and over in the future.”
Passing the ballot amendment might not be a big deal in and of itself, Whitley said, but the move could be seen as symbolic of something much bigger.
“The bottom line is real plain and simple: If you believe it’s been too easy to pass pension legislation in the past and as a result of having an easier path to take, the state of Illinois has put itself into a terrible unfunded pension liability hole, the only logical thing to do is to say, ‘Yeah, I’m ready for a change because what we were doing in the past wasn’t working.’”
But state Rep. Dwight Kay, R-Edwardsville, said last week that he against the amendment because it seems to be more for show than effect. “It’s just a smoke screen,” he said. “This doesn’t represent meaningful change.”
Steve Joiner, staff representative for the American Federation of State, County and Municipal Employees in Madison County, which also opposes the vote, said it has seen a larger-than-usual number of retirements among “good employees who don’t want to retire” but figure their pensions are safer if they leave before the vote.
Marlon A. Walker covers Illinois general news for stltoday.com and The St. Louis Post-Dispatch. Follow him on Twitter at @marlonawalker