Senate passes bill restricting ‘golden parachutes’ for government officials
The Government Severance Pay Act would spare taxpayers the burden of providing excessive severance payouts to outgoing public officials.
Lawmakers in the Illinois Senate have brought a victory for taxpayers closer to reality.
The bill will proceed to the House of Representatives from where, pending the approval of state representatives, it will head to the governor’s desk for final approval.
SB 3604, filed April 10 by state Sen. Tom Cullerton, D-Villa Park, would limit government workers’ ability to collect extravagant severance packages, also known as “golden parachutes,” on their way out of office.
The bill would provide for specific conditions attached to severance payouts in government employment contracts, designed to limit taxpayer-subsidized rewards for resignations issued amid scandal or dereliction.
For one, the act would impose a fixed ceiling on severance pay for all government employees, capping payouts at the equivalent of 20 weeks of compensation. SB 3604 would also re-establish public-worker severance pay as a privilege, rather than an entitlement, mandating government worker contracts include a provision barring severance packages for employees terminated due to misconduct.
Lawmakers previously ventured to curtail golden parachute severance packages with the passage of Senate Bill 2159. The bill, filed by state Sen. Bill Cunningham, D-Chicago, required greater transparency in severance pay negotiations for public university officials, and further capped their payouts at one year’s compensation. Gov. Bruce Rauner signed SB 2159 into law July 2016.
And indeed, university officials have been among the most generously compensated in the face of career-ending scandal. The Better Government Association illustrated as much in a report released in October 2017, cataloguing a number of big severance payouts. University officials comprised seven of the nine Illinois officials listed in the report.
The College of DuPage Board of Trustees issued one of the largest severance packages for a government employee in Illinois history, according to the Chicago Tribune. During his tenure, President Robert Breuder hid more than $95 million in public expenditures, $243,300 of which was used to purchase liquor. The item was misleadingly labeled “instructional supplies” on ledger lines. In turn, trustees purchased Breuder’s early retirement for nearly $763,000 in severance pay.
More recently, the Northern Illinois University Board of Trustees furnished a disgraced former president with a golden parachute only modestly outmatched by Breuder’s. The NIU Board of Trustees voted unanimously in 2017 to grant a $600,000 severance package to former President Doug Baker, who had earlier resigned in the wake of a patronage scandal. A circuit court eventually ordered NIU to cease payouts to Baker, but not before the former president had already collected the lion’s share of his payout.
“Failed administrators and executives shouldn’t receive golden parachutes for wasting taxpayers’ time and money,” Cullerton said at the time of the board’s decision. “Our state universities and community colleges need to stop abusing state funds. These dollars should go toward educating our children, not lining the pockets of ineffective administrators.”
But it isn’t just in higher education where these payouts occur. In an effort stave off litigation, Metra awarded aggrieved former CEO Alex Clifford a $718,000 severance package in 2013.
Taxpayers in local school districts, too, are expected to pick up steep severance costs in the event of severe misconduct. Resigning in the wake of sexual harassment accusations, Floyd Williams Jr., superintendent of Des Plaines School District 62, reached a payout agreement with his employer in which he collected roughly $127,000, or his outstanding school year salary.
Most Illinoisans, meanwhile, have experienced a fiscal climate sharply different from that of golden parachute recipients. Indeed, the same environment that has delivered six-figure payouts and premature retirements to public officials, has pushed a top-heavy tax burden onto the backs of working Illinoisans. Between 2008-2015, Illinois homeowners saw property tax bills rise six times faster than household incomes. The disparity between those who collect extravagant severance pay and those who foot the bill points to a serious need for reform.
The bipartisan willingness to protect taxpayers demonstrated by the passage of SB 3604 should be welcomed as an encouraging shift in Springfield. Lawmakers should deliver the Government Severance Pay Act – but they shouldn’t stop there. Lawmakers across political parties have introduced spending cap amendments in both chambers in the General Assembly. These proposals, too, would keep the state’s expenditures within its means, and therefore protect taxpayers from perpetual tax hikes.
In the meantime, taxpayers should continue to call upon lawmakers to proceed down the path of fiscal responsibility ventured with the Senate’s passage of the Government Severance Pay Act.