Monday, May 30, 2011

An Open Letter to All Teachers in Illinois

Challenges remain before us. We must never become complacent in our belief that justice exists for those who simply “fight the good fight”; nor should we become indifferent to political power and what exorbitant wealth can buy: a “democracy on the auction block, subject to the highest bidder” (Bill Moyers).  

Although we can infer that legislators will often pass laws for their own advantage, most of us still adhere to the belief that the legislators’ duty to act justly stems from their duty to keep a promise (David Hume).  Perhaps we should recall that despite their pledges, the legislators’ criteria for justice are their consideration for what is most expedient for them—their re-election, which is concealed often by a counterfeit concern for the general welfare of their constituency and the state’s financial situation. 

Undoubtedly, our pension is not generally viewed as in the best interest of the welfare of any legislator’s electorate.  Our pension serves no purpose, except solely for our enviable, financial promise.  How should we argue then for the expediency of this right?  Is being just to a minority of citizens beneficial as a means for the majority’s attainment of happiness (Mortimer Adler)? Conversely, and with deference for utilitarian principles, how can we argue that it is morally right that a minority of people suffer so there is a net gain for the majority?  Should not “the minority [of individuals] possess their equal rights, which equal law must protect” (Thomas Jefferson)? 

There are no easy resolutions to these questions.  All of us claim certain beliefs as truths.  Nevertheless, what we must remember is that we, both retired and working teachers, cannot abdicate our right to representation in a decision-making process that affects only us, and although our entitled pension conferred to us by the State and U.S. Constitutions is not “an inalienable right,” for most of us, it is our final and only source of income. 

It is up to us to secure this privilege by opposing the wealthy influences of the Civic Committee of the Commercial Club of Chicago.  We must defend our dignity with stubborn resolve.  Our primary task is to enlist every teacher in a unification of will to protect our “alienable” rights and benefits that we deem fair and equitable because they are earned, incentive payments for our life’s labor (John Locke). This undertaking perhaps forestalls our pro-active and continual engagement with some of the bankrollers’ marionettes in the Illinois General Assembly.

Indeed, our fortitude and knowledge become our power, and this resilience and knowledge must become our action.  Our collective financial fate is challenged and will continue to be in the future.  We are intrinsically bound to one another in this regard.  As Martin Luther King eloquently stated, “We are caught in an inescapable network of mutuality, tied in a single garment of destiny.”   Let us follow King’s message of “direct action,” unify our efforts to confront a conflict of powerful interests, and “arouse the conscience of not only our colleagues but our communities” by proving that our earned right to a defined-benefit pension is not the problem but the solution that should endure as the template for the preservation of justice and dignity of all workers in Illinois.

A demanding call for engagement now intensifies for us. We cannot remain on the sidelines.  Apathy is not an option, even though “It is so much easier to look away… so much easier to avoid such rude interruptions to our work, our dreams, our hopes” (Elie Wiesel). Let us continue with concerted determination and indomitable courage and meet these challenges.  “What is required of us now is a new… responsibility…; that we have duties to ourselves [and to others]; that there is nothing so satisfying to the spirit, so defining of character, than giving our all to a difficult task” (Barack Obama). Truly, “We Are One,” but only if we demonstrate this refrain’s assumption by our willingness to organize and to act upon principles that we believe are so valuable that to do nothing would be an injustice.
 

Saturday, May 28, 2011

SB 512

“This legislation seeks not only to increase the membership contribution one time, it seeks to put the membership contribution on an escalating scale that is recalculated every three years… It is important to stress that once a member has ceased participation in Tier One, he or she cannot rejoin that tier. If a member fails to make a selection, the member shall participate in Tier-Two. These periodic member choices every three years will result in increasing migration from the Tier-One Plan because of the rising cost. If a large amount of members migrate to the Tier-Three Plan, then contributions will not flow into [Tier-One and Tier-Two plans] and possibly endanger the solvency of these funds” (IFT).

Tier-One members must choose among the following if SB 512 is passed:

·         Remain in Tier-One with a contribution rate of 13.77 percent, an increase of 4.37 percent of salary

·         Select the Tier-Two option with a contribution rate of 6 percent, a retirement age of 67, a reduced COLA and a reduced final average salary (IEA); all service frozen as of June 30, 2012

·         Select the Tier-Three option, a Defined-Contribution Plan (401k), with a contribution rate of 6 percent; all service frozen as of June 30, 2012

Tier-Two membership must choose between the following if SB 512 is passed:

·         Remain in Tier Two with a new contribution rate of 6 percent, a retirement age of 67, a reduced COLA and a reduced final average salary

·         Select the Tier-Three option, a Defined-Contribution Plan (401k), with a contribution rate of 6 percent; all service frozen as of June 30, 2012

New hires will have to choose within six months of the date of employment between the following if SB 512 is passed:

·         Elect to participate in Tier Two with a contribution rate of 6 percent, a retirement age of 67, a reduced COLA and a reduced final average salary

·         Elect to participate in Tier Three option, a Defined-Contribution Plan (401k), with a contribution rate of 6 percent; all service frozen as of June 30, 2012

Sources: The Illinois Federation of Teachers (IFT) and the Illinois Education Association (IEA)

Wednesday, May 25, 2011

Defined-Contribution Plan v. Defined-Benefit Plan


Ø  With a few exceptions, Defined-Contribution Plans were not initially created as retirement vehicles but rather as supplementary savings accounts

Ø  With a Defined-Contribution Plan (401k, 403b, 457), only your contributions are defined

Ø  A Defined-Contribution Plan shifts all the responsibilities and all the risk from the employer to the employee; thus, your benefit is not guaranteed

Ø  Your benefit is based upon investment earnings

Ø  A Defined-Contribution Plan does not have the “pooled investments, professional money managers, and shared administrative costs” that a Defined-Benefit Plan provides

Ø  Your benefit ends when your account is exhausted

Ø  There are no survivor or disability guarantees

Ø  This plan does allow for portable assets

Ø  Changeover costs to this plan would be significant

Ø  Investment fees are paid by member

Ø  On-going costs would be higher: in 2006, the expense ratio was 1.29%, 4.3x’s higher than a Defined-Benefit Plan; in 2004, the median cost was 1.4%, 4.7x’s higher than a Defined-Benefit Plan

Ø  The State of Illinois will not “save money.”  Most of the State’s obligation to TRS is for contributions not paid during the past several decades; therefore, the deferred cost of underfunding cannot be eliminated by switching to a Defined-Contribution Plan

Ø  Shifting to a Defined-Contribution Plan can raise annual costs by making it more difficult for Illinois to pay down existing liabilities. The plan will include fewer employees and fewer contributions going forward

Ø  Even with Defined-Con­tribution Plan option, States and localities are still left to deal with past underfunding

Ø  “There is a $6.6 trillion deficit between what 401k account holders should have and what they actually have.”



v  Defined-Pension Plans are more certain

v  You cannot outlive the benefit

v  You are not affected by Market volatility

v  Defined-Benefit Plan’s assets are held in trust and managed by professional investors

v  Survivor and disability benefits are part of this plan

v  This plan encourages a long-term career and stable workforce

v  Since most Illinois teachers have not paid into Social Security, it is perhaps their only retirement guarantee

v  This plan is the best choice for middle-class retirement

v  Teachers with a Defined-Benefit Plan are more likely to be self-sufficient and less likely to need public assistance

v  Because teachers understand the value of such a plan, they are willing to give up higher wages

v  TRS performance is well-diversified; it is in top ¼ of all public funds for the last 10 years

v  Since 1982, the average rate of return has been 9.83 percent

v  The costs for this plan are not excessive or expensive: 0.3% of total assets, and these costs are paid for by TRS.

Sources: The Teachers’ Retirement System, the Illinois Federation of Teachers, the National Institute on Retirement Security, Center for Retirement Research at Boston College, National Conference on Public Employee Retirement Systems, and Center on Budget and Policy Priorities       

Thursday, May 19, 2011

"What we have already achieved gives us hope -- the audacity to hope..."

"Most working and middle-class... Americans don't feel that they have been particularly privileged... They've worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game..."  from Barack Obama's Speech on Race, March 18, 2008

Wednesday, May 18, 2011

Antedated Court Cases: Challenging the Pension Clause, etc.

Article XIII, Section 5 of the Illinois Constitution states:  “Membership in any pension or retirement system of the state or any local government, or any agency or instrumentality of either, shall be an enforceable, contractual relationship, the benefits of which shall not be diminished or impaired.” (Helen Kinney and Henry Green were the delegates who jointly “sponsored the pension clause proposal as an amendment to the proposed Legislative Article” at the 1970 Illinois Constitution).

To let the courts decide is a reckless disregard of a senator’s and representative’s duty to uphold the State of Illinois and the United States Constitution. Besides the datum that a State cannot pass any law “impairing the obligations of contracts” (Article I, Section 10, the Constitution of the United States of America), Appellate and Supreme Court cases are costly lawsuits at the taxpayers’ expense.
1974       Peters v. City of Springfield… firemen filed suit
Pension rights are “earned.” There is no distinction between “earned” and “unearned” pension benefits… “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1975       People ex. Rel. Illinois Federation of Teachers v. Lindberg
                …can’t force the General Assembly to fund the pension at a specific percentage
                (See McNamee ’96 and Sklodowski ‘98).

1979       Kraus v. Board of Trustees… Police Pension Fund, Niles
                Law existing at the time of “vesting” is incorporated into employee’s agreement…
Pension benefits commence at the time employee contributions begin… General Assembly cannot modify benefits.  “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1982       Village of Sherman v. Village of Williamsville
                Record of proceeding of Constitutional Convention (21 July 1970)…
                Rights are fixed when an employee embarks upon employment.

1985       Felt v. Board of Trustees (Judges)
…can’t diminish terms of contract with pension system… Pension based upon salary of last day of service or last year. “The Clause protects pension benefit rights as an enforceable contractual relationship that is subject to modification through contract principles.”

1985       Taft v. Board of Trustees, Police, Village of Winthrop Harbor
                Employees have contractual rights regarding increases in pension benefits.

1987       Carr v. Board of Trustees… Police (Peoria)
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1987       Buddell v. Board of Trustees State University Retirement System (SURS)
                …can’t diminish terms of contract with pension system…
                Pension Code allows employees to purchase service credit for time in the military.
“The Clause protects pension benefit rights as an enforceable contractual
relationship that is subject to modification through contract principles.”

1988       DiFalco v. Board of Trustees… Fireman’s Pension of Wood Dale
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1991       Schroeder v. Morton Grove… Police
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1992       Hannigan v. Huffmeister
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1993       Barber v. Board of Trustees of Village of Barrington
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.

1996       McNamee v. State
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.
Asks questions whether “the Pension Clause mandates that the pension system be funded at a particular funding percentage or according to a funding schedule.”  The Pension Clause “creates an enforceable contractual relationship that protects only the right to receive benefits… a cause of action would exist if legislation diminished a person’s right to receive benefits or placed the pension system on the verge of default or imminent bankruptcy.”

1998       People ex. Rel. Sklodowski v. State
Vested Case Issue: an employee acquires a “vested” right when he or she enters the pension system.  (See Lindberg ‘75/McNamee ‘96) “Clause does not create a contractual basis for participants to expect a particular level of funding [unfortunately].”

1999       Doyle v. Holy Cross Hospital
Continued employment does not constitute supporting unilateral modification of an existing employment contract.

2001       Miller v. Retirement Board of Policemen (Chicago)
                …can’t diminish terms of contract with pension system…
“The Clause protects pension benefit rights as an enforceable contractual
relationship that is subject to modification through contract principles.”

2007       Ross v. May Co.
Continued employment does not constitute supporting unilateral modification of an existing employment contract.

2013     People... v. State...
 

Monday, May 16, 2011

Unfunded Liabilities & the TRS Pension

No matter what the Civic Committee of the Commercial Club of Chicago (Illinois Is Broke), the Civic Federation, National Taxpayers United of Illinois, and the legislators who are empowered by these groups say, as long as there are continued long-term, short-term, and diversified investments from TRS; a growing teacher workforce; vital membership contributions;  a guaranteed defined-benefit plan for all of its members; and the statutory State contributions to the pension plan, the pension fund’s assets do not have to match its liabilities. These obligations are long-term and will never necessitate a high liquidity of assets at any one time.
The TRS pension does not use a discount rate that is risk-free (such as Treasury bonds).  Its expected returns for its pension fund assets have averaged 9.83% since 1982 by investing in U.S. and international equities, bonds, fixed income, and real estate and by using a strategy that rebalances the investment portfolios according to the pension’s funding ratios and volatility of the market.  To use a discount rate that is far below the expected return on fund assets for actuarial valuations gives a distorted view of TRS’ finances.

Sunday, May 15, 2011

Legal, Social, and Economic Justice

HOUSE RESOLUTION 0468                                       
 LRB096 13063 AJO 27628 r


“WHEREAS, During these turbulent and difficult economic times, it is more important than ever that the concept of social justice, the view that every member of our society is deserving of equal economic, political, and social rights and opportunities, be given the highest priority by elected State officials; and

WHEREAS, Assuring social justice is a key element of the
Illinois Constitution as shown by the Preamble which states, in part, that "We, the People of the State of Illinois ... in order to provide for the health, safety and welfare of the people; maintain a representative and orderly government; eliminate poverty and inequality; assure legal, social and economic justice; provide opportunity for the fullest development of the individual; ... - do ordain and establish this Constitution for the State of Illinois…

WHEREAS, Recognizing that when justice is achieved in every aspect of society, rather than merely in the administration of law, individuals and groups will be afforded fair treatment and an impartial share of the benefits of society…

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-SIXTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that the House, as a body, will endeavor to give a high priority to social justice and allow that important principle to direct our choices in matters both large and small and guide our decisions in matters temporary or permanent; and be it further

RESOLVED, That suitable copies of this resolution be delivered to each member of the House so that it may serve as a tangible reminder of the commitment each member has to this noble priority.”



“Legal, Social, and Economic Justice”

Article XIII, Section 5 of the Constitution of the State of Illinois: “Membership in any pension or retirement system of the state or any local government, or any agency or instrumentality of either, shall be an enforceable, contractual relationship, the benefits of which shall not be diminished or impaired”
“The Pension Clause serves as a bar against any unilateral legislative or governmental action to reduce or eliminate the pension benefit rights in place when an employee [becomes] a member of the pension system” (Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate, 21, “Is Welching On Public Pension Promises An Option For Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution.” The Great Pension Debate: A detailed analysis of the Illinois Constitution’s pension clause.  04 March 2011).  
The conclusion of the Illinois Appellate court case, Kraus v. Board of Trustees of the Police Pension Fund of the Village of Niles, 1979: pension benefits begin at the time an employee begins his or her contributions to the pension; pension benefit rights are contractual, and the General Assembly cannot modify those rights and benefits (28-32).
The conclusion of the Illinois Supreme Court case, Felt v. Board of Trustees of the Judges Retirement System, 1985: “the Clause safeguards the pension benefit rights contained in the Pension Code when a public employee begins contributing to the pension system whether or not the employee is eligible to retire” (36).
SECTION 16, EX POST FACTO LAWS AND IMPAIRING CONTRACTS
No ex post facto law, or law impairing the obligation of contracts or making an irrevocable grant of special privileges or immunities, shall be passed (Article I, The Constitution of the State of Illinois).

SECTION 10 (Article I, The Constitution of the United States of America)
No State shall… pass any Law impairing the Obligation of Contracts…

Saturday, May 14, 2011

The public pensions' funding gap: three questions/ three solutions

I read an interesting article recently by Jack Rasmus, entitled, “The Truth Behind the Public Pensions’ Funding Gap.”  Rasmus is also the author of Epic Recession: Prelude to Global Depression.  He claims that the pension funding gap is the result of several causes that include the recession and resulting unemployment; escalating healthcare costs; pension “contribution holidays” since the mid-1990s; “the employment of fraudulent actuarial assumptions about rates of returns”; an anticipation of hiring more public employees that did not happen; the Pension Protection Act which “allowed pension funds to make loans to hedge funds and private equity firms,” which also allowed speculation in subprime mortgages, foreign exchange, financial derivatives, and  interest rate swapping.  In summary, banks, pension-funds’ managers, pension-payment holidays, and legislators who allowed it to happen have caused the financial catastrophe.
Given this marauding and predatory state of affairs, Rasmus’ asks three questions: “Why not make those who created the pension funding gap pay—the hedge funds, banks, insurance companies, other financial institutions that were responsible for the massive investment losses, the pension fund managers who negligently risked workers’ pensions and the politicians who let them?”
Moreover, why not make “the Federal Reserve provide direct loans to the pension funds at the same cost of 0.25% that the Fed has provided loans to other financial institutions the past two years? After all, pension funds are also financial institutions, and Fed loans won’t add a cent to the federal or state budget deficits as an added plus.”
Finally, Rasmus states this supposition: “[The] Federal Reserve provided $9 trillion to banks during the recent crisis [CEO bonuses were also paid out of OUR money], of which $1 trillion was loaned to foreign non-US banks!  If the Fed can loan $1 trillion to foreign bankers and their wealthy bondholders and investors, why can’t it do so to protect the retirement of millions of U.S. workers in the public sector—who are the victims, not the criminals responsible for the public pensions crisis?”



Wednesday, May 11, 2011

TRS: One Tier + Two Other Optional "Tears" = Disaster

Tier-One Pension System, a Defined-Benefit Plan

The TRS: Investments – 50%, Membership Contributions – 25%, State – 25% (These are approximations).

·         TRS Diversified Investments:  U.S. & international equities, bonds, fixed income, real estate…  (Since 1982, an average return of 9.8%)
·         Membership contributions:  9.4% of salary (teachers have contributed 100% since 1940; approximately $900 million contributed this year to the pension system);
·         School District contributions:  .58%
·         State Contributions:  Illinois has not fully funded the pension system since 1953.

This year the State contributed $2.2 billion; however, approximately 2/3 of that total was for debt service (past interest due).  During the last fiscal year, TRS paid out $3.9 billion in benefits but collected $6.8 billion in revenue.

Our Total liabilities: approximately $84 billion; unfunded liabilities: approximately $40 billion


Tier-Two Pension System: Began January 2011
SB 1946 passed on March 24, 2010 in approximately 10 hours (There was no public policy for this legislature); it was signed into law on April 14, 2010.

--Minimum eligibility to draw a retirement benefit: age 67 with 10 years of service (age 67 will probably be reduced to 62 (pending HB 3075);
--Salary cap is at $106,800, which will be increased at a rate of less than 3% or ½ of the annual increase in the CPI (Consumer Price Index).  It is not compounded;
--Survivor benefit increased to 66.7%;


Special note: teachers do not receive Social Security; the State of Illinois saves billions of dollars by not having to pay into Social Security.

Note These Federal Laws:
GPO (Government Pension Offset)
--Reduces spousal survivor benefit.

WEP (Windfall Elimination Provision)
--Reduces any earned Social Security in other jobs because of the state pension benefit.

Current Legislative Proposals:
SB 105/ HB 149 did not get out of committee, though this legislation will most likely emerge in another bill (SB 512):

--Keep the current TRS benefit package, either Tier I or Tier II, but in return the annual payroll contribution by teachers in both tiers would increase, originally proposed at 28% of salary (probably will be 12-14% according to Representative and sponsor Tom Cross);
--Tier I teachers could elect to convert their benefit package to the Tier II structure: a teacher would not be eligible for full retirement benefits until age 67 (or 62?);
--It is estimated that Tier II benefits will be 30 percent less than benefits for a Tier I teacher if final average salary and creditable service time for both are equal.  New Teachers in the Tier II system will not make as much as Social Security recipients.  Their income will be worth 4 – 4.5% and not the 9.4% that they will have contributed during their career (IEA).  Teachers should consider this fact before choosing a Tier II option, if it comes to pass.


Tier-Three Pension Plan:

--A 401(k)-style Defined-Contribution benefit plan:
--Teachers would pay 6% of their salaries under this plan. If school districts decide to participate in this option, they would match teacher contributions;
--A Defined-Contribution Plan is not a guaranteed pension plan;
--Benefits are based on investment earnings; there are no survivor or disability benefits; investment fees are paid by member.


Another Sample Letter:

Dear Senator/Representative:

Please vote against any pension reform that will ultimately “diminish or impair” our constitutional rights and benefits. The proposed changes for current teachers will weaken our pension system.  As you are aware, teachers have consistently paid 9.4% of their salary into the pension system, even though the State of Illinois has often failed to fully fund the State’s pensions and honor its financial obligations for the last 58 years.  Our pension is all that we have for retirement. We do not receive Social Security like you do or have a private-sector pension.  Thank you,

Sincerely,

Name
Street Address
City, IL Zip
Phone #

Monday, May 9, 2011

A Response to a Legislator's Echoing Pension Reform

Pension reform could alleviate cuts by Darlene Senger
As we approach the end-of-session crunch, many tough decisions will be necessary to balance the state’s budget and bring spending under control; regardless of how much effort is put into prioritizing our spending, many cuts will still be necessary.
However, please consider this: The majority of these cuts would not be necessary had years of poor decisions not been made in regard to our state’s pension system. We currently have $85 billion in unfunded liabilities, and that number is increasing exponentially. So while revenue is indeed up this year, thanks in large part to a 67 percent tax increase passed against the strenuous objection of most Republicans, cuts will still be necessary to vital state services because our state’s pension payments and debt services are growing so quickly.
This year alone, $4 billion of the state’s estimated $33 billion will be going to the pension system. It ranks third in expenditures, behind only health care and education.
This number will only double over the next decade, putting us in a position where it is likely that upward of 40 percent of our state’s revenue will be heading to retirees by the year 2045. The system is insolvent.
Without overhauling the state’s unsustainable pension system, less and less of our revenue will be going toward day to day functions. If we act now, more and more of our hard-earned tax dollars can go to education, the infrastructure that we depend on and the other vital services that our state provides.

Dear Representative Senger:
The teachers’ pension is sustainable.
The size of unfunded liabilities that you refer to in your recent letter in the Daily Herald “does not give a full view” of the State’s pension fund. Unfunded liabilities are amortized over 40 years in Illinois; using a “riskless rate” to calculate fund liabilities does not reflect the amount that the State and local governments need to deposit in their pension funds (Center on Budget and Policy Priorities).

Moreover, as markets and economy improve, so do the assets in the pension funds.  “Since June 30, 2009, a date in which many recent studies on the financial condition of State pension trusts are based, investment returns have rebounded sharply – nearly 25% higher since then” (National Association of State Retirement Administrators, NASRA).  

It is also important to note that “State and local government pensions are not paid from general operating revenues but, rather, from trusts to which retirees and their employers contributed” (NASRA).

Legislators who claim that the pension system is “unsustainable” most likely use outdated information, “particularly at the low-point of the market recovery [June 2009]” (NASRA).

If we look at the Teachers’ Retirement System (TRS), for instance, the numbers to focus on are the amounts TRS pays out in pensions and benefits in a year. During the last fiscal year, TRS paid out $3.9 billion in benefits, but collected $6.8 billion in revenue, more than enough to meet current obligations (Illinois Education Association, IEA).   Furthermore, the total value of TRS assets continues to improve. At the end of FY 2009, the TRS fund held $28.5 billion. At the end of FY 2010, the TRS fund held $31.3 billion. It currently holds $37.3 billion. That’s a 23.6 percent increase in less than two years (IEA).  While the media fret about the unfunded liability, the total amount is never due all at once.

What could be done about the State’s budget crisis:
You and other legislators need to "generate enough revenue growth to both maintain service levels from one year to the next and cover the state’s actuarially-required employer contribution to its five pension systems."  How can you and other legislators do this?
1.    Restructure the current debt to a lower interest rate;
2.    Expand the sales tax to include services;
3.    Tax corporations -- “state and local governments gave nearly $70 billion to corporations,” and most of these corporations are not creating jobs or putting money back into the States’ economy;
4.    Tax high-income people, including retirees who make more than $100,000;
5.    Create a progressive income tax in Illinois;
6.    Cut wasteful spending;
7.    Stop giving money to special-interest groups and tax breaks to those who supported your and other legislators’ election;
8.    Enact structural-spending reforms that do not "diminish or impair" the public employees’ constitutional rights to a pension (Article XIII, Section 5 of the Constitution of the State of Illinois);
9.    Do not attempt to pass a “law impairing the obligations of contracts” (Article I, Section 16, of the Constitution of the State of Illinois);
10.  Do not pass any law “impairing the obligations of contracts” (Article I, Section 10, of the Constitution of the United States of America);

11.  Hire an "impartial and independent" legislative analyst not paid for by the Civic Committee of the Commercial Club of Chicago;
12.  Bankruptcy is not an option, Senator Mark Kirk.

Why should you and other legislators consider these suggestions:
To let the courts decide is a reckless disregard of your duty to uphold the State of Illinois and the United States Constitution. There will be costly lawsuits at the taxpayers’ expense. Moreover, it’s reprehensible to set public and private employees in opposition by claiming that the funding of public pensions will take money away from education and other programs. It’s scheming to shift the burden of responsibility of the State to local taxpayers; it’s conspiratorial to allow Big Businesses to drive legislation in their favor.
If you believe changing the current teachers’ pension system is the answer to the problem that legislators have created, then all of you are ultimately going to destroy the pension system (perhaps this is your and other legislators’ unstated objective).
What could be the effects if bills such as Senate Bill 105 proposed by Senator Chris Lauzen, et al and HB 149 proposed by Representative Tom Cross, and others are passed this May or in the future?  Presumably, many young teachers will not continue to work in Illinois and roll over their pensions when the opportunity arises.   Furthermore, the “best and brightest” college candidates will either not become teachers, or these young aspirants will find teaching positions in other states, where the education of children and their teachers are valued.  Thus, current teachers and retirees with a Tier-One pension plan will lose an essential financial resource needed for pension sustainability.
What other consequences are there for creating the worst teachers’ pension plan in the country? Students across Illinois will be deprived of receiving an excellent education from the best teachers available, and they will all become the unintended victims of this injustice and charade.
Glen Brown