By BRETT ROWLAND
For Rantoul Press
Illinois has the worst credit rating in the nation due in large part to its massive unfunded pension liabilities, but even modest reforms to the state’s biggest problem are no match for election-year politics.
Two Republican lawmakers already are pushing to repeal a lower cap on end-of-career pension spiking included in the state budget in May. Sen. Dale Fowler, R-Harrisburg, and Sen. Neil Anderson, R-Andalusia, are sponsors of Senate Bill 3622, which is also supported by the Illinois Education Association. The bill would reverse a recent change meant to penalize taxing bodies for pension spiking.
The budget for fiscal 2019 mandated statewide pension funds like the Teachers Retirement System to bill a local employer, such as a local school district, for boosting salaries by more than 3 percent a year in employees’ final years before retirement. The bill sponsored by Anderson and Fowler would push that cap back up to 6 percent, where it was set by a 2005 law before the budget passed this spring.
Both Fowler and Anderson voted for the budget back in May. The budget passed with bipartisan support. A news release on Anderson’s website notes that the budget includes reforms "capping end-of-career salary increases that cause pension spiking."
Fowler said he reversed course in an effort to ease the state’s teacher shortage.
Fowler and Anderson are clearly kowtowing to the teachers union before the November election. Anderson, who vowed not to take a legislative pension and stop reckless spending if elected, faces a challenge from labor activist Gregg Johnson in November. Fowler faces Democrat Steve Webb in District 59.
The 3 percent cap was expected to save the state $21 million a year. That’s not a lot in a $38.5 billion spending plan, but the budget, which politicians from the governor on down hailed as balanced, was precarious from the start.
The practice of giving out large end-of-career raises to public employees just before retirement to boost taxpayer-funded pension payouts has contributed to the state’s growing pension crisis. Past attempts to limit the practice, including the 2005 law, have produced meager results.
A recent INN investigation found that school districts have sent more than $50 million directly to TRS to cover the cost of pension spiking since the 2005 law was passed, including $23.8 million since fiscal 2014.
Continuing the practice of spiking pensions will simply make the state’s pension problems worse. The math is simple, as state Rep. Mark Batinick has pointed out.
When spiking happens, Batinick said, "the pension is based on that much higher amount and there hasn’t been enough contributed along the way to the make up for that."
And while there’s plenty of blame for the state’s pension mess to go around, doing things that make Illinois’ pension problem even more unsustainable is shortsighted at best. Even in an election year.