11/7/2012
Diane Cohen
General Counsel
Liberty Justice Center
Voters across Illinois said no to Constitutional Amendment 49, the Illinois Legislature's sole remedy for the state’s pension crisis. The sad fact is that Amendment 49 wouldn’t have done anything to fix the state’s pension crisis. It would not even have addressed the system’s $200 billion-plus debt. Nor would it have authorized future cuts in benefits. Instead, it would have done nothing, especially since history shows that a supermajority voting requirement would have made virtually no difference in preventing the pension benefit increases and sweeteners the General Assembly has approved during the recent decade, because such measures have passed by overwhelming margins in both houses of the Legislature, far surpassing the supermajority mark.
It is likely that the amendment didn't pass for varying reasons. Opponents of Amendment 49 claim it would have limited the bargaining power of government unions and prevent the will of a simple majority from raising pension and retirement benefits in the course of labor negotiations. The Chicago Teachers Union, for example, claims the amendment would “strip union members of many collective bargaining rights." Other voters may have simply refused to vote because the amendment itself was confusing. But the Illinois Policy Institute opposed Amendment 49 because it was a do-nothing amendment. First, it was ludicrous to suggest, as unions have, that state or local leaders should even have the power to ante up tax payer money that isn't even there. Moreover, that leads us to the fact that if our elected leaders were really intent on amending the constitution in the name of pension reform, they should have referred an amendment that prohibited any increases unless and until the state’s pension systems are fully funded (using risk-free discount rates).
Nonetheless, we need not amend the constitution to advance real pension reform. We must demand real reform that includes changing our retirement plans to defined contribution plans for public employees. The only sustainable solutions are plans centered on those similar to the 401(k) plans used in the private sector. Additionally, cost-of-living increases for all retirees must be frozen and the retirement age raised for future retirees.
Other reforms, such as retiree health care and local pension accountability, must also be on the table. Pursuant to Illinois law, the governor can take action on this now, but is thus far failing to do so.
Amendment 49 is the face of do-nothing reform. We must now tell our elected representatives that we will not stand for fake reform by demanding real reform now. |
