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Chris Lauzen Will Suggest State Pension Compromise Friday

Letter to the Editor: With a call from Gov. Pat Quinn, the General Assembly will hold a special session Friday to determine the next step in pension reform.

  • Editor's Note: The following letter to the editor was submitted by 25th District state Sen. Chris Lauzen, who is but is the Republican candidate for , running against Democrat and former St. Charles Mayor .

 


On Friday (Aug. 17, 2012), Gov. Quinn has called a Special Session of the General Assembly that will cost Illinois taxpayers an extra $40,000 and will be as good for us as a  at the State Fair.

I hope that the Pension Crisis will be resolved, and I will reintroduce a practical compromise—with some improvements—that I have sponsored for the past three years. However, you and I both recognize that it is more likely that the public employee union alliance with the Quinn-Madigan-Cullerton triumvirate will continue to protect the insolvent but lucrative-for-them "status quo."

The longer this problem remains unsolved, the more these special interests benefit ... but the worse other priorities like education, social services and public safety suffer. And, the more severe the ultimate solution will need to be.

According to the nonpartisan analysts at the Illinois State Commission on Government Finance and Accountability (COGFA), approximately 40 percent of our Pension Unfunded Liability is due to an accumulated nonpayment of annual pension contributions, 40 percent is due to changes in actuarial realities regarding pension benefits, and 20 percent to underperformance of investments in pension plan assets.

Until this past Spring, the largest plan, the Teachers' Retirement Systems (TRS), continued to send misinformation to its members, i.e. "... there is (basically) no problem with the pensions that full annual contributions to the plans can't fix." Despite teachers, or their school systems, making all the mandatory employee contributions for the entire history of the plan, this statement by TRS has been an unconscionable prevarication. Longer lifetimes (a good thing), higher salaries, a period of 20-20-20-percent end-of-career raises, early retirement incentives and other "pension assumption busters" have unbalanced the plan.

Over the last eight to 10 years, the amount of state funds going to pensions has tripled, now exceeds the appropriation for providing education itself, and has consumed the revenue generated by the 67 percent income tax increase passed by Quinn and the Ruling Majority during the "lame-duck" session 18 months ago.

For the past three years, I have sponsored commonsense compromise legislation that has been called "Cap, Age, COLA."

First, we must cap the abuses of huge pension benefits to any retiring public employee. It is an easy consensus that my taxpaying constituents refuse to pay more than $120,000 (!) for anyone who doesn't come to work in retirement.

Secondly, we must ask all public employees if they will please work until age 62, which is the early retirement age for Social Security, rather than 55 years old.

Finally, one-half of the benefits portion of the unfunded liability is due to a 3 percent compounded cost-of-living annual increase. Between the 20 years from retirement age 55 to 75 years old, every $50,000 pension grows to $100,000 (and those $125,000 pensions grow to $250,000)! At least one-third of this increase needs to be cut in order to save billions more.

When I present these proposals to individuals and groups of public employees, I get reluctant approval ... but voluntary approval.

I voted "No" on an 11th-hour pension proposal in May 2012, because it cynically used remaining hospitalization benefits as the lever to gain the pension concession and there was no annual funding guarantee.

Seventeen years ago, Steve Rauschenberger, Peter Fitzgerald, Pat O'Malley, Dave Syverson and I passed legislation that put in place a funding mechanism called a "Continuing Appropriation" where the state debt was paid as the first priority, then this pension obligation was paid, and only after those two were paid did the rest of the bills get paid. We mistakenly and naively thought that this legal promise would be honored. Unfortunately, when Blagojevich-Quinn-Jones-Cullerton-Madigan went to raid the pension funding in 2005, they blew through our "continuing appropriation" safeguard like it was tissue paper.
Now, in exchange for concessions on "Cap-Age-COLA," we need to put onto the ballot a constitutional amendment that guarantees payment of these obligations.

Promise less, but keep the promise.

I am amazed that leadership in both political parties ignore a solution that enjoys substantial grassroots support. I can't help thinking that Illinois citizens and taxpayers deserve so much better than the "low theater" that we will witness on Friday. I hope that this is not another example or more evidence of the adage, "We get the (quality of) government that we elect."

But, as Henry V said at Harfleur, "Once again into the breach ... ," this time with $40,000 more of your money.


State Sen. Chris Lauzen
25th District

Jon Zahm August 16, 2012 at 03:33 PM
Absolutely outstanding analysis and proposal. If Springfield listened to Chris in 1993 we would not be in this crisis now.
Kevin ONeil August 18, 2012 at 01:11 PM
$40,000 is a mere pittance if something positive NOW comes of it.
Chicagobluesgirl August 19, 2012 at 09:07 PM
What do Madigan, Quinn, Brady and the rest have to gain by ignoring this plan and going with their own more destructive plan? Something smells fishy. Senator Lauzen's plan is brilliant and has been rejected simply because his name is on it. I have heard this verbatim from those that can affect these changes. See Chicago Machine Politics, Pensions and the Illinois Legislature for more details: http://chicagobluesgirl.com/2012/08/14/chicago-machine-politics-pensions-and-the-illinois-legislature/

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