On Wednesday, the Illinois Supreme Court will hear arguments challenging the state’s meager attempt at pension reform in 2013. No matter the outcome of this case, the fate of government employee pensions has been sealed for quite some time.
The pension promises made to government workers will be diminished and impaired. Maybe it will happen through Senate Bill 1, the state law at issue in this case. But more than likely, it’ll happen because the pension funds will simply run out of money.
That’s not what anyone wants to hear. And it certainly isn’t fair to government workers counting on pension checks for their retirement.
But today, Illinois’ pension systems have less than 41 cents on hand for every $1 in promised retirement benefits. To see how this plays out in real life, look at Detroit: For years, unions argued that Michigan’s constitution protected pensions, no matter what. Bankruptcy came anyway, and last week thousands of retired city workers saw the first round of cuts to their pension checks.
What’s hurting Illinois’ pension systems — and ultimately, government workers — is the unwillingness to admit the system is beyond repair.
Sure, politicians might say the $100 billion-plus pension crisis is Public Enemy No. 1, but their actions prove otherwise. Here’s how unserious they are about reform: Even if SB1, the 2013 “pension overhaul,” is upheld by the courts, Illinois taxpayers will still spend millions every year paying pensions to people for nongovernment work.
State law allows a number of private lobbying organizations to participate in the taxpayer-backed pension plans: the Illinois Association of School Boards, the Illinois Association of School Business Officials, the Illinois Association of Park Districts, Township Officials of Illinois, the United Counties Council of Illinois and the Illinois Municipal League, among others. Employees at select government unions, including the Illinois Education Association, are allowed to collect public pensions, too.
Let’s be clear: These are not government agencies. Their activities are not open to the public, and taxpayers don’t have a say in how much their employees are paid. Yet when their employees retire, it’s Illinois taxpayers who foot the bill.
It isn’t cheap, either.
Unlike pensions in the private sector, Illinois government pensions are based on an employee’s final, highest average salary — not how much he or she saved over the years. It’s common for employees to see huge spikes in their salaries in the years preceding retirement.
Larry Frang spent more than 40 years at the Illinois Municipal League. The league is one of the lobbying organizations currently agitating for a state tax increase.
In 2013, Frang’s salary was $235,739, according to documents obtained through the Freedom of Information Act. But in 2014, Frang’s final year on the job, his salary increased to $392,423. He’s eligible to begin collecting a pension this year, and when he does that single-year salary spike could yield as much as $30,000 in additional pension benefits every year — all on the taxpayers’ dime.
Cinda Klickna is head of the Illinois Education Association, the state’s largest teachers union. The IEA is another vocal proponent of raising your taxes to — you guessed it — send more money to the state’s pension funds.
Klickna’s last teaching job was in 2005, when her pensionable salary was $70,104. But it’s her IEA salary that her lifetime pension will be based on. In 2014, the union paid her $217,740, and she’s been paid more than $200,000 for the past three years.
Even when lawmakers attempt to stop pension abuse, they fall short.
In 2011, reporters at the Chicago Tribune and WGN-TV uncovered two government union lobbyists who snuck into the public pension system after spending just one day as substitute teachers. Steven Preckwinkle, political director for the Illinois Federation of Teachers, and fellow union lobbyist David Piccioli stood to collect millions of dollars in public pensions for that one day in the classroom.
In January 2012, legislation to end that type of pension abuse was enacted. Published news articles claimed the two lobbyists would be “kicked out” of the pension system, and that the law would prevent this kind of abuse from happening again.
Despite the so-called “crackdown” on this pension abuse in 2012, both men still are collecting public pensions. Preckwinkle collected $37,416 in 2014, according to public records, while Piccioli received $30,564.
“The outrage here is that something like this is legal,” said Adam Andrzejewski, a government watchdog and founder of For The Good of Illinois. “It was weak legislation. It was a step in the right direction, but it codified the existing, legalized corruption.”
To add to the outrage, less than two months ago Piccioli filed a lawsuit to collect every penny that the 2012 law, according to the lawsuit, “deprived” him of.
In coming weeks, many of these same individuals and organizations will flood the airwaves talking about how important it is to keep the pension system intact.
But ask yourself: Whom are they really looking out for?
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Diana Sroka Rickert is a writer with the Illinois Policy Institute. The opinions in this essay are her own.
