The status quo politicians have run up more than $128 billion in unfunded pension liabilities. That liability may be double when considering local fire and police pensions. The IL Supreme Court’s decision to prohibit changes to existing pension promises makes reform more difficult and expensive, but it does not foreclose all opportunity.
This is not a partisan issue. We are all in this together. Dedicated teachers, law enforcement, first responders and other public employees are critical to our state’s prosperity. A compensation framework and retirement system that is competitive, dependable, and sustainable is in all of our best interests. It’s the failure of status quo politicians like Senator Julie Morrison and Mike Madigan to focus on this situation that puts Illinois at an existential crossroads.
I will consider any good faith pension reform proposal. However, I support the following steps to begin making measurable progress toward a sustainable system:
- All new employees must be moved to a 401(k) style defined contribution plan and should participate in and benefit from Social Security. We have to stop increasing the population of employees within an unsustainable system while also ensuring critical professions (teachers, police and fire) are attractive to future employees.
- Moral responsibility and the Supreme Court decision both support our keeping our promises to public workers and retirees depending on pension for their retirement. Funding these very generous promises recklessly made by status quo politicians will require renegotiation of existing debt and new borrowing.
- The ability to develop and pass a new structure for future employees allowing us to define and cap our existing long-term obligations freeing rating agencies to improve Illinois’ worst in the nation credit rating. This move is desperately needed to lower borrowing costs and renegotiate current debt at better rates.
- The state will then also be in a better position to think about alternative approaches to retire current obligations. For example, the term of the bonds could be stretched to match the long-term nature of the obligations, reducing the annual interest payment amount.
- The 653 local fire and police pensions must be managed by a central body. This will allow them to protect their respective shares while obtaining the benefits of economies of scale. My opponent identified this as something she supports but doesn’t have the courage to advance it because of union opposition* (we need leaders who are truly independent of special interests and willing to push back on them on behalf of the people and small businesses of our state). This proposal has been politicized and fear mongered. We can drive better returns for a combined effort. We can still provide the local control desired on issues of disability and workers compensation. Building trust here is critical. Solutions are required by both those who serve in uniform and our municipalities saddled with funding the currently ineffective system. My father was a Chicago policeman for 35 years and my mother has lived on a CPD widow’s pension for 14 years. I understand the importance of these benefits and believe we have a responsibility to be good stewards of a dependable system for current and future generations.