We have to work on cost side of pension crisis
As we begin the new year with a new governor, it is imperative that we finally address Illinois' pension crisis, not simply throwing more money at the problem but also addressing the cost side of the issue. To illustrate the success, or lack thereof, of throwing more money at the problem, one just needs to look at the Teachers' Retirement System, accounting for the bulk of the $130 billion unfunded pension debt owed by the state.
According to TRS, for the period 1981 to 1999, taxpayers contributed approximately 100 percent of what the employees themselves contributed, leaving the pension fund at a level of 68 percent funded. Over the next decade, taxpayers ramped up their contributions to 190 percent of what the employees contributed only to see the pension fund decline to 48 percent funded. Since 2010, the taxpayers again increased the amount they contributed to 340 percent of what the employees contributed, only to see the pension fund continue plummeting to be now just 40 percent funded. Overall, since 1981, taxpayers contributed over 215 percent of what the employees themselves contributed.
On the expense side, thanks to a pension clause added in 1970 to the Illinois Constitution, legislators' hands are tied from ever "diminishing" pension benefits. This amendment is the root cause of the pension crisis by locking in all the benefit increases awarded by legislators over past decades while at the same time preventing any attempt to lower the cost to the taxpayers. This is a recipe for disaster.
All our legislators need to do to right this wrong is stand up to the union lobby to place a constitutional question regarding pensions on the next statewide ballot. In the meantime, pension costs will increasingly crowd out vital education and social services funding in Illinois.