Quinn eyes bad pension legislation for special session

by Ben VanMetre Political leadership in Illinois punted on pension reform during the recent spring legislative session — a move that resulted in back-to-back credit rating downgrades. The General Assembly’s inaction and the resulting credit blows caused Gov. Pat Quinn to call lawmakers back to session. The purpose of the June 19 special session is...

by Ben VanMetre

Political leadership in Illinois punted on pension reform during the recent spring legislative session — a move that resulted in back-to-back credit rating downgrades.

The General Assembly’s inaction and the resulting credit blows caused Gov. Pat Quinn to call lawmakers back to session. The purpose of the June 19 special session is to pass some sort of meaningful pension reform.

Reforming the nation’s worst-funded pension system is no small task. In addition to dealing with the unmanageable defined benefit system, lawmakers will be faced with the results of previous pension “fixes” that made the system worse – pension holidays, borrowing and tax hikes.

Quinn has already set the stage for what to expect in the special session –repeating failed reforms of the past and hoping for something better this time around. He indicated in a recent statement that he will approve another pension holiday for Chicago Public Schools if lawmakers give him some kind pension reform during the upcoming session.

Many Illinois politicians use pension holidays to avoid real pension reform. Former Gov. Rod Blagojevich and the 94th General Assembly, for example, signed into law a pension holiday that allowed Illinois to underpay the pension system by a cumulative $2.31 billion from 2006 to 2007.

The problem is pension holidays perpetuate Illinois’ state and local pension crises. Skipping payments not only fails to address the problem, but actually makes things worse.

It’s disheartening that Quinn is seriously considering a policy that would hurt Chicago’s pension system. This is not the type of reform needed to solve Illinois’ pension crisis. The only way forward is to give government workers the freedom to manage their own retirements through 401(k)-style retirement plans.