Thursday, December 6, 2012

Representative Elaine Nekritz on HB 6258, Illinois We Are One Coalition's Response, and Richard Palzer’s Letter to Representative Nekritz

Representative Elaine Nekritz, who is spearheading the new push for reform, said the group [sponsors of HB 6258] reviewed several opinions on the constitutionality of the changes to the system. “I don’t think anyone can know in advance what the seven Supreme Court justices will do,” she said. “I think all of us would agree that without some changes, Illinois will be sent into fiscal oblivion, and we have to avoid that.”

In response, the Illinois We Are One Coalition made this statement: “We were not consulted in the development of this plan, but our preliminary review suggests that there are significant problems with HB 6258 that need to be worked through. The pension debt was caused by the state's failure to make actuarially adequate pension contributions, not by public employees, but like its predecessors, this proposal essentially balances the pension debt on the backs of teachers, police officers, nurses, caregivers and other public servants, both active and retired. It is also unclear at this juncture whether this proposal is constitutionally or actuarially sound. We intend to thoroughly analyze this proposal's elements and provide a more comprehensive response in the coming weeks.” 

 
Richard Palzer’s Letter Sent to Representative Nekritz on November 20th:
As a retired teacher, I remain quite concerned that the only proposals under discussion to address the pension problem center on reduction of rank-and-file employee and retiree benefits. Your position as House Democratic leader of pension reform and your website statements referring to the abuse of the retirement systems have prompted me to contact you.
Everyone agrees that decisions of past legislatures and governors--from underfunding (or not funding at all) and "diverting" funds for other purposes, to borrowing at higher interest rates to compensate for contributions that should have been made as scheduled--are the primary cause of the problem.
Add the costs incurred as a result of those who, as your statement reflects, gamed the systems to enhance their pensions, as exposed, for example, by the Chicago Tribune "Watchdog" investigative series and WGN TV's "Pension Games," and you have homed in on a second cause, the kind of "abusive loopholes" you have vowed to close.
Yet, employees and retirees, we who have not manipulated the system, remain the ones slated to bear the cost of the so-called "reform," hardly fair when you're targeting the wrong people; in fact, because retirement funds were used to finance other projects--which should have been paid for by incremental tax increases all along--current workers and retirees would wind up twice victimized.
I found it quite interesting--actually infuriating--when during an interview by host Phil Ponce on "Chicago Tonight" (April 25), guest Tyrone Fahner not only admitted that public-sector employees had not caused the problem, but that deliberately not making required payments would be considered criminal if it occurred in the private sector.
But, you may argue, despite who is to blame, the money isn't there--everyone agrees with that as well. However, there is an alternative solution that deserves consideration, one that addresses funding in ways that do not unfairly target rank-and-file employees and retirees. The underfunding problem is just that, one of revenue.
Please seriously consider the analysis and recommendations of the Center for Tax and Budget Accountability, which has concluded that Illinois has a funding problem that structural tax reform and restructuring the infamous back-loaded "ramp" repayment schedule can successfully address.
For quick reference, Ralph Martire, its executive director, wrote an editorial summarizing the Center's finding--the Daily Herald published his comments as a guest editorial in its July 3 issue. His June 19 presentation to the State University Annuitants Association in Springfield outlines in more detail the arguments for reforming the tax code and fixing the "ramp."
I have been continually frustrated that most people are not even aware that an alternative assessment and proposals exist, despite contacting my local legislators as well as other legislative leaders of both Parties and the Governor; absent such information, the public is not getting a full picture, and that's irresponsible.
Given Civic Committee Ty Fahner's recent ominous warning that even the draconian benefit-reduction measures he and his committee advances won't cover the extent of the debt, he is tacitly recognizing that Illinois does indeed have a revenue problem.
Reducing benefits--even if it were fair--is not the answer. It only makes sense to pursue a more productive, fiscally responsible path that can lead to financial stability.
I'm asking that you use your leadership position to move debate from benefit-reduction as the only game in town--it's not and shouldn't be.
Thank you for your consideration.

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