Wednesday, April 25, 2018

Call Your Legislators! (from the Illinois Retired Teachers Association)

As you probably know, 33 seats in the Illinois General Assembly will be open as current legislators have decided not to run. Some incumbents are meeting challengers from the opposite party.   Contact your local state senator, state representative, and any challengers they may have with the following questions:

1.    Do you support continued full state funding for the Teachers’ Retirement Insurance Program (TRIP)?

The state of Illinois pays less than ¼ of the cost of the premiums for the retiree health insurance program. There are four entities that contribute to the premiums: 

*State of Illinois ($110 million out of the $450 million for the cost of TRIP)
*Local school districts
*Current teachers
*Premiums paid by retirees

For years the state of Illinois has attempted to not only cut off funding for TRIP, but also change current state statute to take out the continuing appropriation for the funding of the program now and in the future. A continuing appropriation is a statute that ensures the funding of a program continues even though it is not listed in the state budget.

2.    Do you support allowing TRIP participants to opt in and out of the state insurance plan during each year’s benefit enrollment period?

Currently, TRS Annuitants are the only state of Illinois retirees who cannot opt back into their insurance program if they have opted out. All other state retirees have this ability (including judges and legislators).

3.    Do you support continued full funding for Teachers’ Retirement Service?

Fully funding means not taking additional pension holidays or putting “smoothing” in place to create additional pension balloon payments in the future.

4.    Do you oppose cost shifting the state’s pension payment obligation to local school districts?

[If Illinois policymakers pass a bill to shift its responsibility of paying the “normal costs” to local school districts, many school districts would not be able to afford to pay these costs, even if they are phased over the years. 

“A shift would create a new and large financial requirement for school districts, which would be difficult for many to meet. Moreover, Illinois ranks last in terms of state spending on K-12 education, and school districts are already relying heavily on local property taxes. Shifting the state’s normal cost obligation onto school districts would only mean that an even higher proportion of school districts’ revenue would come from property taxes.

“Furthermore, property tax bases would not be sufficient to absorb any shift in the employer normal cost for teacher pensions…  School districts are demographically and financially varied, and it would be difficult to impose a uniform normal cost shift on them… Illinois ranks last in terms of state spending on K-12 education, and school districts are already relying heavily on local property taxes… While shifting the state’s normal cost obligations onto school districts may provide some relief to the state’s budget, it will not mitigate these financial obligations and will instead push them onto school districts that, on average, already derive the majority of their revenue from local sources” (The Center for Tax and Budget Accountability, March 2012).

What would be other probable effects? In cash-strapped school districts, of which there are many, teachers would not receive increases in their salaries; many teachers would lose their jobs; student programs would be reduced or eliminated; class sizes would increase; it would be more difficult to recruit, as well as retain and attract, the best teaching candidates (which is already happening)… (Education Sector Policy Briefs).

The public school system in Illinois would be jeopardized; the public school teacher’s dignity and guaranteed retirement security would be imperiled, and their students’ right to be taught by the very best teachers available in Illinois would be at risk.

Approximately one-third of the total pension payment is the normal costs; the other two-thirds of the payment is the interest owed on the debt that the state created for not fully funding the pension system for several decades. To transfer the normal costs of the teachers’ retirement system to the school districts is to diminish the state’s role in providing income retirement security to its public employees, which has been the (Democratic-controlled) state’s intention all along —Glen Brown].

5.    Do you support expanding the number of days a retiree can substitute teach without affecting his/her pension?

Illinois is facing a statewide teacher shortage.  Retirees are a great resource to fill these open positions in struggling school districts.

6.    Do you oppose taxing retirement income?

[“Currently, seven states do not tax individual income – retirement or otherwise: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two other states – New Hampshire and Tennessee – impose income taxes only on dividends and interest (5 percent flat rate for both states).

“Five states that do not tax any teacher pensions are Alabama, Hawaii, Illinois, Mississippi, and Pennsylvania. 

“The states that impose state income taxes on teacher pensions fall into three groups: 

● Five states exempt 100% of their own state's teacher pensions from their taxes while taxing some or all income from out-of-state teacher pensions. These states are: Kansas, Louisiana, Massachusetts, Michigan and New York. Of these five, Massachusetts and Michigan exempt another state's pensions if the other state provides a reciprocal exemption.

● Eleven states have no special tax provisions for teacher pensions and, for income tax purposes, treat them the same as other forms of income. These states are: California, Connecticut, Idaho, Indiana, Minnesota, Nebraska, New Mexico, North Dakota, Rhode Island, Vermont, and Virginia.

● The remaining 20 states either exempt a certain amount of teacher pension income from their tax or provide tax credits to reduce the tax. The information applies to the 2009 tax year unless otherwise noted”—Glen Brown].

7.    What is your position on protecting the pension and health insurance benefits promised to retirees when they were active teachers?

[The Pension Protection Clause makes it “clear that if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired… [The State of Illinois] may not rewrite the Pension Protection Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve... [P]ension benefits are insulated from diminishment or impairment by the General Assembly…” (Kanerva v. Weems, 2014 IL 115811, 38, 41, 48)—Glen Brown].

8.    Do you oppose changing the state constitution to amend/delete the pension protection clause?

The pension protection clause of the constitution is what guarantees that the state of Illinois cannot change the benefits you receive in your pension at any time.

[Public employees and retirees know that to possess a right to a promised deferred compensation, such as a defined-benefit pension, is to assert a legitimate claim with all Illinois legislators to protect that right, and that fulfilling a contract is a legal and moral obligation justified by trust among elected officials and their constituents. 

Public employees and retirees know the “Pension Protection Clause” is a binding legal commitment and requirement of justice, and that justice demands we keep our covenants with one another: for when legislators swear an oath to uphold the State and U.S. Constitutions, then citizens of Illinois have also acquired the right to expect that they will uphold that pledge. This is a matter of important legal and moral concern for all citizens of Illinois, for all legal claims are validated by a moral framework since the concept of justice is grounded in ethics and morality.

According to Eric M. Madiar, former Parliamentarian to Illinois Senate President John Cullerton in 2015, “…Public Act 98­0599 [the senate bill that attempted to diminish and impair Article XIII, Section 5 in December 2013] was not a response to an unknown or unforeseeable problem, but rather a response to ‘a crisis for which the General Assembly is largely responsible.’ The court further found that the Act was not the least restrictive means the State could have used to address the problem, but ‘an expedient to break a political stalemate.’

“In addition, the court indicated that the Act was tantamount to a taking of private property because the Act failed to distribute the burdens of pension funding evenly among Illinoisans let alone the State’s contract partners. The court explained that the U.S. Constitution ‘bar[s] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’   

“In short, whether under a Contract Clause or Takings theory, the same arguments that prevailed in the Pension Reform decision against Public Act 98­0599 would equally apply to the… proposed amendment. As a result, the proposal amendment does not offer a plausible path to unilaterally reduce the fiscal burden of State and local pension obligations…” (Read Amending Article XIII, Section 5 (The Pension Protection Clause) of the Illinois Constitution). 

Any attempt to attack the Pension Protection Clause is unethical, duplicitous, and illegal. Moreover, to amend the Pension Protection Clause would not reduce the state systems’ current $130+ billion unfunded liability that was largely created by the Illinois General Assemblies and Illinois governors; an amended Pension Protection Clause would not address the real fiscal issue caused by the state’s out-sized pension debt.

It would violate the State and U.S. Constitutions: Article 1, Section 16 of the Illinois Constitution: “No ex post facto law or law impairing the obligation of contracts… shall be passed”;  Article 1, Section 10 of the United States Constitution: “No State shall… pass any… ex post facto Law, or Law impairing the Obligation of Contracts…”

To also ignore the Fifth and Fourteenth Amendments of the U.S. Constitution and change laws that protect one group of people is to ignore due process and equal protection of the laws that guarantee contractual agreements. Read the Illinois Supreme Court ruling: docket number 118585, filed on May 8, 2015—Glen Brown].

9.    Do you support or oppose bonding to bail the state out of the pension debt?

It is not realistic for the state to bond its way out of this problem that it created by taking pension holidays and putting balloon payments in place in the past.

This is not an exhaustive list of questions but at least it is a starting point for a conversation with your representatives. Passing any information you get to the IRTA will be helpful for the IRTAPAC Committee during the endorsement process.  If you meet with a legislator, please provide a short summary of his/her responses to Marge Sucansky or Vic Corder. 

IRTA will begin organizing for the November general election in late March, so your input will be appreciated.   Endorsement is non-partisan and based only on the legislator’s beliefs regarding issues that are important to retired educators.

Your district numbers are on your voter registration card.  If you have any questions regarding your district or people running for the house or the senate in that district, feel free to contact us at the contact information below. 

Vic Corder—state legislative committee 773-857-2161
Marjorie Sucansky—WLSU legislative committee 630-985-2620

You can also go to

Click on the drop down menu
Click on “Contact a Legislator”
Click on: “Find a Legislator”
Using your zip or other information you can find a legislator.

The legislative committee of IRTA is recommending a grass roots lobbying effort on the part of members. Our PAC currently contains $171,799 which can be used by members who attend fund raisers for candidates. If you would like to attend a coffee or fund raiser, please notify Julie or Vince who will contact IRTA and get the check for you to present to the candidate. Obviously, IRTA cannot compete monetarily with the big donors to candidates, so offering your time, stuffing envelopes, making calls, letting the candidate know you are from IRTA and have concerns about your pensions and health benefits… can make up for money donations.

After the election, it will be our job to educate the new “guys and gals” about our issues as most legislators don’t understand the pension situation. 

Marge Sucansky
Legislative Committee

1 comment:

  1. Tell your legislators to revamp the flawed Pension Ramp: “Starting in 1995, yet another funding plan was implemented by the General Assembly. This one called for the legislature to contribute sufficient funds each year to ensure that its contributions, along with the contributions by or on behalf of members and other income, would meet the cost of maintaining and administering the respective retirement systems on a 90% funded basis in accordance with actuarial recommendations by the end of the 2045 fiscal year. 40 ILCS 5/2-124, 14-131, 15-155, 16-158, 18-131 (West 2012). That plan, however, contained inherent shortcomings which were aggravated by a phased-in 'ramp period' and decisions by the legislature to lower its contributions in 2006 and 2007. As a result, the plan failed to control the State’s growing pension burden. To the contrary, the SEC recently pointed out:

    “‘The Statutory Funding Plan’s contribution schedule increased the unfunded liability, underfunded the State’s pension obligations, and deferred pension funding. The resulting underfunding of the pension systems (Structural Underfunding) enabled the State to shift the burden associated with its pension costs to the future and, as a result, created significant financial stress and risks for the State.’ SEC order, at 3. That the funding plan would operate in this way did not catch the State off guard. In entering a cease-and-desist order against the State in connection with misrepresentations made by the State with respect to bonds sold to help cover pension expenses, the SEC noted that the State understood the adverse implications of its strategy for the State-funded pension systems and for the financial health of the State. Id. at 10. According to the SEC, the amount of the increase in the State’s unfunded liability over the period between 1996 and 2010 was $57 billion. Id. at 4.5 The SEC order found that ‘[t]he State’s insufficient contributions under the Statutory Funding Plan were the primary driver of this increase, outweighing other causal factors, such as market performance and changes in benefits.’” (Emphasis added.) Id. at 4 (In re PENSION REFORM LITIGATION (Doris Heaton et al., Appellees, v. Pat Quinn, Governor, State of Illinois, et al., Appellants) Opinion filed May 8, 2015, JUSTICE KARMEIER delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Burke, and Theis concurred in the judgment and opinion).

    The current “Pension Ramp” does not work for the five public pension systems. The “Ramp” entails larger payments today as a result of the 1995 funding law – Public Act 88-0593 – to pay the pensions systems what the state owes. There needs to be a required annual payment from the state to the pension systems. The debt needs to be amortized for a longer frame of time (a flat payment) just like a home loan that is amortized; though the initial payment will be difficult in the beginning, over the long term it will become a reduced cost and a smaller percentage of the overall Illinois budget as it is paid off throughout the years.

    “Decades of mismanagement and failure to match contributions are the predominant reasons that the state’s pension systems are suffering to the degree that they are today. Years of pension holidays, continually borrowing against the systems without a plan for repayment and a severe economic recession, which caused investments to plummet, further exacerbated the problem” (Senate President John Cullerton). Thus, there needs to be a required “actuarially-sound” annual payment from the state to the pension systems! Indeed, the State of Illinois has a revenue problem and its policymakers have stolen money for decades from public employees' pensions to hide this fact.