If you’re at a nice restaurant with a friend who tells you to get whatever you want and they’ll pick up the tab, the surf and turf can be mighty tempting.
But when you’re the one footing the bill, you might find yourself looking more closely at the sandwiches.
In Illinois, local government officials have ordered a lot of surf and turf over the years, with the state assuring them it would pick up the tab. Unfortunately, the state of Illinois’ credit card is now maxed out – and then some.
Pension spending consumes about 25 percent of the total state budget, and Illinois’ public pension systems have the greatest unfunded liability of any state in America. The rich benefits guaranteed workers, many who retired in their mid-50s, is growing far faster than we can raise taxes.
So maybe it’s time for local school districts and cities to start paying their own way – and looking a little closer at the sandwich menu.
The idea to make local government more responsible for its pension obligations isn’t a new one, and it’s far from the ultimate solution.
A better proposal would be to amend the state constitution to allow the state to set a ceiling on pension benefits that can be paid, and to decrease the annual increases granted pensioners from 3 percent a year to the rate of inflation, capped at 3 percent.
Such an amendment seems to have little hope of passing, however. Pensioners almost would certainly come out in droves against it, making the argument that the state was reneging on employment terms that were agreed upon in good faith.
That’s presuming that legislators even let it on the ballot.
In his budget address this week in Springfield, Gov. Bruce Rauner proposed shifting the burden for pension obligations from the state to local governments. With the exception of Chicago Public Schools, this liability shift would be phased in over four years.
It’s time for local government control to also mean local government responsibility.
There is justifiable fear that such a shift would lead to increased property taxes locally. But that presumes that local leaders will choose increased property taxes.
Rauner has said that increased funding would be provided to schools, but we doubt it would be enough for each school district to cover its pension liability.
There are other options for making up deficits, however. How employees, including union employees and managers, contribute to their retirement and health insurance benefits is a point of negotiation. So, too, is consolidating units of government to make things more efficient.
Illinois needs laws that make these kind of adjustments possible. Rights of teachers unions to strike also should be curtailed – most states already prohibit or severely limit teachers’ ability to halt classes with a strike.
It might not be the ultimate solution, but making local governments more responsible for the wage and benefit decisions they make could help alleviate our state’s pension woes in the long term.
The days of paying out rich salaries and counting on someone else to pay the pension tab should come to an end.