Pensions and the Civic Committee

Illinois has a long history of fake reforms – legislative proposals that promise to solve the great policy challenges of the day when passed, but never actually accomplish these goals. There is perhaps no bigger fake reform than the 1995 pension ramp passed by the Republican-controlled General Assembly and signed into law by former Gov....

Illinois has a long history of fake reforms – legislative proposals that promise to solve the great policy challenges of the day when passed, but never actually accomplish these goals.

There is perhaps no bigger fake reform than the 1995 pension ramp passed by the Republican-controlled General Assembly and signed into law by former Gov. Jim Edgar, also a Republican. By back loading the pension payments, the scheme let the elected officials of that era, and Democrats in control ever since, off the hook for bad policy. Now, with those payments coming due, we have Gov. Pat Quinn talking about thebig squeeze as if this is a sudden surprise.

None of this should be a surprise. It was all predicted in the 1990s, of course, but because it was far off in the distant future, no one much cared. The delay and denial allowed Gov. Edgar and others to stand tall for having “solved” the problem. Gov. Edgar continues to live on his reputation of fiscal prudence despite the ramp he signed into law creating the crisis we now face.

Of course, there are other players involved with fake reform efforts. Former Gov. Rod Blagojevich and Quinn, along with their large Democrat majorities, have done even more fake reform, including the issuance of pension obligation bonds and Tier 2 reforms that fix nothing.

Compare this to the efforts of the Civic Committee of the Commercial Club of Chicago, which has been sounding the alarm on the pension crisis for a long time.

The Illinois Policy Institute has done and continues to do a great deal of research and outreach on pension reform, and we recognize the trailblazing work that Eden Martin and the Civic Committee accelerated in 2006 and continued ever since.

Suffice it to say, when the Civic Committee announced the looming crisis facing the state in 2006, people shrugged. They aren’t shrugging anymore.

This history is what makes the recent criticism of Tyrone Fahner (Martin’s replacement as of a few years ago) and the Civic Committee so interesting. Recent reactions by opinion writers, editorial page writers and political bloggers to the Civic Committee’s declaration that pensions are unfixable tells us all there is a lot more going on than meets the eye.

While we don’t always agree with the policy recommendations of the Civic Committee (nor they with us), we have always respected their deep concern for our state’s well-being. They are honest brokers with a point of view. Anyone engaged in public policy debates will sometimes choose the wrong tone or perhaps use framing that is just a bit off. But if any organization should get the benefit of the doubt, it is the Civic Committee.

Which begs the question: why the concerted effort to discredit them at this moment in time? Perhaps there are others forces at work.

At the Institute, we respect the Civic Committee’s work and their sincere efforts to help our great state find a path forward – a path that does not once again use a scheme of fake reform over the substantive reform Illinois actually needs.

And therein may lay the answer to the attacks on the Civic Committee. We’ll know better when Democrat leaders, slated to rule with supermajorities, return to Springfield next month and next year.

Until then, the Institute remains focused on reforms designed to promote security for both retirees and taxpayers. As the Institute has long advocated, those reforms must include the four policy prescriptions also outlined by the Civic Committee:

• Freezing the automatic cost-of-living adjustment
• Capping pensionable salary
• Increasing the normal retirement age
• Implementing local pension accountability

In addition, the state must shift to defined-contribution plans for all future work.

You will see more from our team in the coming months that builds off our previous work and advances a solution encompassing these four key policy prescriptions.

The current pension system may be broke and unfixable, but retirements for government workers can be protected with these changes.  And, just as important, these reforms will also protect the taxpayers who fund those retirements.