First, lay off all the state workers
The state's pension system isn't the only facet that's broken. Day-to-day operations across state government are completely dysfunctional.
This article was originally featured in the Chicago Tribune on May 11, 2015.
The Illinois Supreme Court’s decision to strike down an attempt at pension reform has many saying Illinois has no choice but to raise taxes.
The state’s pension system is underfunded by more than $100 billion, and beyond repair. When it comes to reforming the system, lawmakers’ hands are tied. On Friday the court ruled that the retirement benefits offered on current workers’ first day of employment can never be changed; only new hires can earn retirement benefits differently.
So if changes can’t be made, here is what Gov. Bruce Rauner should do: Lay off the entire state workforce, and close the pension system. Work with the General Assembly to open a different retirement plan for newly hired government workers, modeled after the nation’s most popular retirement vehicle: the 401(k). Then offer to rehire state workers under the new retirement plan.
It won’t be easy, and it won’t happen overnight.
State laws will need to be changed. Pension benefits earned to date will need to be paid.
The government unions will file lawsuits, and the legality of this strategy will be challenged. Understandably, some workers will turn down the new deal. Daily operations of state government will be disrupted — and potentially result in a government shutdown.
But even if all those things happen, the ultimate outcome will be better than what’s ahead if the state does nothing.
In fact, a government shutdown might be exactly what Illinois needs.
The state’s pension system isn’t the only facet that’s broken. Day-to-day operations across state government are completely dysfunctional. For example:
- At the Illinois Department of Corrections there are no punch clocks or electronic systems for tracking how many hours employees work. Corrections workers keep track of their own hours worked and then submit for payment — basically on the honor system. Last year taxpayers paid more than $70 million in overtime and comp time to corrections workers. A recent auditor general report found rampant overtime abuse in the agency — likely because hours worked are tracked manually.
The American Federation of State, County and Municipal Employees, the government union representing workers in the Department of Human Services, has filed numerous grievances complaining that the agency is understaffed. In one grievance, a union representative wrote, “Workers are popping more pills than ever just to get through the day.”
Several years ago, DHS began offering welfare recipients the opportunity to intern at department offices around the state. It seemed like a win-win: extra hands at the office while helping people in need. But in the same complaint about being understaffed, the union complained that these welfare recipients were taking away work opportunities from dues-paying AFSCME members.
- Illinois ranks last among the 50 states in a lot of things. But it even takes Illinois longer than any other state to count up how “last” it is because of its broken and disjointed accounting systems. Across Illinois state government, there are more than 260 accounting systems — many of which don’t communicate with one another or feed to one central state system. These disjointed systems mean it takes the state comptroller almost a full year to review the state’s finances across different agencies.
In 2011, the state attempted to calculate how much it costs to keep so many accounting systems. But even computing the cost of operating all these accounting systems was too difficult, so the best estimate the auditor general could come up with is $24 million to operate about half of the systems.
- In recent years, the state has attempted to save money by limiting the number of individual water bottles and water coolers bought for state offices. Many of these buildings have drinking fountains in the hall, so water coolers or individual bottles are unnecessary. But these savings never happened. Why? After AFSCME complained, an arbitrator sided with the union. The reason was appalling: It wasn’t because of health or safety concerns, or because there was anything wrong with the water from the fountains, or even a lack of water fountains. The arbitrator said that because the bottled water had been provided in the past, it could not be taken away. (Apparently bottled water, like pensions, cannot be diminished or impaired.)
In the next few weeks, politicians will use Friday’s court ruling as impetus to raise taxes. But putting more money into state government will just feed these problems, not fix them.
The best evidence that more taxes will not work is the past four years. Illinoisans were paying higher taxes and the state’s pension debt continued to grow. All of the dysfunction in day-to-day operations festered.
The suggestion to lay off the entire state government workforce and endure a government shutdown might seem jarring. But it’s really quite simple: If we cannot afford the retirement benefits offered and we’re not allowed to change them, then we cannot afford to keep these workers on the payroll. Doing nothing puts lavish retirements in front of everything else state government is supposed to do.
The only crazy proposal is thinking that more taxes — the approach politicians have taken for years — will somehow yield better results this time around.