Dear Senator Kirk W. Dillard,
Do your parents or grandparents live with the assurance of a pension? I believe that you would not steal that promise from them if they did. I also believe that you understand the importance of trust among individuals and the pension systems into which they have elected to participate. However, there are some ugly facts I do not understand.
I do not understand why the state of Illinois has underfunded its contributions to The Teachers’ Retirement System for decades and has used this money as if it were its own private savings account. I do not understand why our elected officials have not competently and responsibly managed the retirement systems to which they were entrusted but fund other special-interest and on-going programs and services with public employees' pension money instead. I do not understand how our past-and-present state officials have failed to generate enough revenue to meet the state’s fiscal obligations; nor do I understand how “pension borrowing” and “pension holidays” are fair to retiring teachers who believed they would have a promised and sound financial future.
Is it not true that “the level of [teacher] benefits is modest, comparable to national averages of public employee retirement systems…? The cost of benefits is not only in line with other states, it’s less than the private sector” (Anders Lindall, American Federation of State, County and Municipal Employees Council 31).
Furthermore, I do not understand how public officials running for Illinois office can make promises that they will not keep once they are elected. I do not understand how many of our public officials in both the Illinois House and Senate, and who have never taught in a school, can pass a bill for a Two-Tier Pension System without the input of Illinois educational leaders and the discussion of the inevitable and adverse effects it will have on Illinois students and teachers alike. “The $80 billion of debt the state owes for pension benefits already earned remains unchanged by this bill” (Steve Preckwinkle, The State Journal-Register, April 4, 2010). Moreover, I do not understand why the teachers’ pensions are being blamed for the state’s fiscal irresponsibility, incompetence, and corruption.
I taught in Illinois public schools for 35 years. Like all other teachers, I never missed a contribution to my state retirement plan. I never received any bonuses, and my school district never matched any contributions to my 403 (b) account. Because I also worked outside of education and earned the required 40 quarters, I will receive minimal Social Security payments. Nevertheless, teacher retirees will not receive their full Social Security earnings because of the Windfall Elimination Provision and the Government Pension Offset. (Incidentally, “Illinois taxpayers save more than $700 million per year by not paying Social Security payroll taxes for 78 percent of all active employees in the five state-managed plans, including all public school teachers” (Preckwinkle)).
I want to believe in a just system, in promises to keep, and in the integrity of our lawmakers. I want to believe that teacher retirees and the State of Illinois have “an enforceable contractual relationship” (Article XIII, Section 5, The Constitution of the State of Illinois); I want to believe that there will be no attempt to pass a “law impairing the obligations of contracts” (Article I, Section 16); I want to believe that Illinois cannot pass any law “impairing the obligations of contracts” (Article I, Section 10, The Constitution of the United States of America). I want to believe that the state of Illinois will make an ethical decision to create the needed revenue and meet its obligations without jeopardizing retirees and the futures of thousands of current teachers. I want to believe that the elected officials of Illinois will be competent, responsible, honorable, intrepid, and just.
Dear Senator Kirk W. Dillard,
First, thank you for your recent reply. The fact that your “father is a retired public school teacher” and that you “have voted ‘no’ to the Democrat's two raids on [the] pensions” is the right thing to do. Nonetheless, the Teachers Retirement System is owed $2,358 million for this fiscal year. Please see that this obligation is paid. If it is not paid by June, than it will be added to the $2,406 million that will be due next year for a total of $4,764 million. I was told by a TRS trustee that “the State has saved $14,842,226,632 by not paying what the actuaries calculated TRS should have received.” TRS has been the State’s credit card for decades! If by the end of the fiscal year on June 31 the State has not paid TRS, TRS will have to sell over $3 billion in assets in order to pay for pension benefits. Please vote yes to pay TRS what is owed.
Not borrowing the money this year will cost the state more in the long run. Borrowing $4.1 billion for the pension system is estimated to cost $1 billion over eight years, or $125 million per year. Not borrowing the money this year will increase the unfunded liability for TRS alone some $13 billion by 2035, or $541 million per year. That annual cost will be higher when the costs to the other state pension systems are added in. Moreover, rating agencies will take a dimmer view of those larger costs to the state over a longer period of time.
The State of Illinois does have a plan to pay off its debt. Each year, Republicans and Democrats have an opportunity to create a long-term financial plan for the state to close the budget deficit. Everyone concedes that such a plan has to include difficult choices. History has taught us that the hard part of developing a long-term plan is sticking to it in the face of economic and political pressure. The Illinois General Assembly approved a long-term, 49-year funding solution for the state’s pension systems in 1996 but has since failed to pay fully into the plan. Though recent pre-election polls show that Illinois citizens strongly oppose raising taxes and cutting state services to balance the budget, if you follow the polls, then legislators are doing exactly what the people want them to do – nothing. This isn’t an acceptable solution as you can see. It contributes to the state’s growing unfunded liability and revenue problems.