ILLINOIS POLICY INSTITUTE PRESS RELEASE
MEDIA CONTACT: Diana Rickert
Diana@IllinoisPolicy.org or (312) 607-4977
Illinois Policy Institute statement on pension reform
SPRINGFIELD (June 1, 2012) – Illinois lawmakers failed to enact meaningful pension reform before the May 31 session deadline. Illinois Policy Institute CEO John Tillman released the following statement today regarding pension reform:
"Illinoisans shouldn’t be disappointed that last night’s pension proposal failed. The legislature was debating a weak bill, full of half-measures, in a rush to meet the session deadline. The proposed bill failed to offer any of the substantive reforms necessary to get Illinois back on track. The bill was a failure, and surely, the rating agencies would have told us so.
The good news is we have an opportunity to restart the debate and demand essential reforms from Springfield. The legislature can tackle Illinois’ problems head-on by transforming Illinois’ pension structure, reforming retiree health care, massively reducing its unfunded liabilities and demanding spending accountability.
These are the steps to get there:
- Reform retiree health care immediately. Don’t tie retiree health care reforms to any other action. Those benefits are not questioned constitutionally and can be reformed without threat of a serious legal challenge. The Institute has released a solution that reduces the state’s $54 billion unfunded obligation by nearly half, while making sure to protect those state retirees with limited means.
- Freeze pensionable salaries. This will immediately stunt the growth in pension liabilities and lay the foundation for fundamental pension reform.
- Introduce 401(k)s. With that leverage, the legislature can offer a viable and affordable 401(k) as “consideration” to all workers going forward. Without a defined contribution plan, there is no true reform. The defined benefit structure has fueled Illinois’ pension crisis and it must be eliminated from future reforms.
- Demand local pension accountability by moving yearly pension costs from the state to local school districts. Illinois must end the practice of having one unit of government dole out pension sweeteners and salary spikes, while another picks up the tab. That’s precisely the kind of governance that has bred failure in Illinois.
Illinois needs a better plan. Legislature must stop tinkering around the edges. Bold reform needs bold leadership."
Media contact Diana Rickert (312) 607-4977.