Institute in Crain’s: Springfield’s latest pension fumble was a win for taxpayers

This was the running theme during Illinois' recent lame duck session: Pass anything.

Crain’s Chicago Business published the following opinion piece by the Institute’s CEO, John Tillman:

This was the running theme during Illinois’ recent lame duck session: Pass anything.

After a failed last-ditch effort by Gov. Pat Quinn, the 97th General Assembly ended earlier this month without a lame duck vote on a pension bill. Media and civic groups immediately lashed out against Illinois lawmakers, calling them cowards, ineffective, failures.

But we view this inaction as a win.

A bill co-authored by state Reps. Elaine Nekritz, D-Northbrook, and Daniel Biss, D-Skokie, contained window dressing that attracted a broad base of support, but we saw through to its many flaws:

• It would not actually fix the problem of unfunded debt.
• It would have left in place a broken defined benefit system.
• It would have created a pension payment “guarantee” by the state, and thus the taxpayers, for funding.

The guarantee was the most insidious item in the bill — it would have placed all future risk on the backs of Illinois taxpayers and removed all ability to negotiate with unions going forward.

Consider this: It has been nearly 20 years since Illinois passed substantial pension reform. This reform — which, at the time, was hailed as a success — failed within 10 years.

Had the Nekritz-Biss bill passed, it would have locked us into a failed pension system that would continue to drain resources from core government services.

In the meantime, the pressure for real reform grows. We’re looking forward to rolling out a plan for change in the near future. Here’s a snapshot:

• Freeze pensions at current levels and increase the retirement age.
• Eliminate future cost-of-living adjustments.
• Set up a defined contribution plan going forward modeled on the State Universities Retirement System’s self-managed plan.
• Implement local accountability for the defined contribution system going forward.

Sometimes big ideas die quietly in Springfield. That’s what happened during the lame duck session.