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Sunday, July 29, 2012
Pension Issues (a letter from Senator Linda Holmes and response from John Dillon)
Thank you for contacting me with your concerns regarding the ongoing pension debate in Springfield. This is a serious problem that has been growing for decades due to previous underfunding by governors from both parties and Republican and Democrat-controlled legislatures as well as the current pension structure in place, which was passed decades ago.
Although nothing has come before the Senate at this time, House Speaker Madigan has introduced a bill in his chamber that would divert money promised to local governments to be put towards the state's pension obligations. I have always been an advocate for local governments and, as far as I'm concerned, this proposal is a non-starter. Taking money away from local governments during a time when many are already facing deficits themselves is irresponsible. I fully support ensuring that the state's pension systems are sustained, but I do not support "robbing Peter to pay Paul," so to speak.
Another reason for our current pension crisis is that people are living longer. The earned benefits structure that was designed decades ago was not crafted in a way that's sustainable for our current retirees. Simply put, if we do not make some responsible, fair reforms, the system will not be around for current employees' retirements.
The state's pension contribution for this fiscal year was $5.7 billion and next year it's estimated to increase by more than $1 billion. The increasing costs put pressure on other vital aspects of the budget, like education, health care and economic development, which means less money can be put back into the classrooms or for efforts to bring businesses to our State. Further, if we do not take any action, our state's bond rating will be downgraded again - costing Illinois even more millions in interest payments.
While we clearly need to address our pension crisis and I will support measures to do so, I am firmly opposed to shifting costs to local governments or local school districts. A fair and equitable solution must be achieved by bringing all stakeholders to the table: teachers, firefighters, police officers, etc. I do not support reforms that are unfair to Illinois working families and I am committed to preserving the pension system for current and future employees.
Again, thank you for contacting me and if you have any other questions, please feel free to call my district office or visit my website at www.LindaHolmes42.com.
Dear Senator Holmes,
Thanks for your response email. I'm sorry that I cannot support cuts to middle-class working people as a means to balance the budget, especially the cuts that would be made to the public servants of Illinois who (like me) forsook social security and received a less-than-generous starting salary to teach, etc.
You write that you cannot endorse "robbing Peter to pay Paul." In fact, we who worked as public servants in the State of Illinois are truly Peter, and you would rob us of what we had been promised now because "people are living longer"? So to speak. Where is your honor and vow to follow the Constitution of the State of Illinois?
Senator, your action, attitude and decisions will cause pain for hundreds of thousands of middle-class workers in the State of Illinois. Your ability to rationalize cutting cost-of-living increases and/or healthcare will certainly work toward lowering that longer life span for the late life and medically-needy pensioners. Have you considered this?
You understandably remained concerned about the increasing percentage of the annual budget eaten up by the necessary payment to the unfunded liability brought to us by Thompson, Edgar, Ryan, Blago, etc. In actuality, the increasing costs of meeting the ill-designed ramp-up will never be met by merely cutting costs to those who gave their working years to public service. Do the math, Senator, and you will find that once you start with COLA's or increased contributions, it will never be enough to satisfy the terrible debt created by earlier political thieves - NOT the people who paid in, gave up social security, and delivered honestly to the State of Illinois.
In the greatest affront to those who would work to make Illinois educated, safe from fire or harm, ready for after-college employment, etc., you would tell new hires that they cannot have anything unless they sacrifice more for what those in the Illinois government had done to all of us beforehand. Are you serious? Do you really think that Illinois can continue to attract great or even good candidates in education or service positions for these important positions with this penalizing requirement?
Senator, real solutions would require restructuring the debt to an amortized schedule instead of the steadily and exponentially increasing debt payment. The foolishness of such a design as in 1995 cannot be met - let's all face it. You write the laws - change it! In fact, the General Assembly has always had the power to force itself to make the necessary payment for the public sector, but they failed to pass that law too.
In addition, a restructuring of the tax codes in Illinois to a graduated system rather than an antiquated flat tax would provide billions in additional revenue for the state.
The only real foes to these two ideas are the corporations, like Motorola or Sears who get big breaks and then dump on the state anyway....
The other foe is the GA itself, where no one has the courage to do what almost every other sensible state in the union has already done. We are now one of only six states that hold on to the medieval method of tax collecting: even New York came around this last year. Look to a graduated system of taxing people and services for the sake of the people, Senator.
In addition, your insistence on cutting will make more than just a ripple in the middle-class economy of which hundreds of thousands are/were teachers. The middle class struggles through this recession, Senator. Will you cut the incomes of hundreds of thousands of middle-class workers now? What impact will that have on the local/state economy? And the cuts will never be enough. Have you really thought about this?