By: Mark Glennon*

By defeating the Fair Tax proposal, Illinoisans made clear they want reform, not higher taxes. But what reform, specifically?

Priority No. 1 couldn’t be more clear. Pensions are Illinois’ biggest problem and they cannot be fixed without an amendment to the state constitution. Our courts have made that clear. The only alternative route to reform is bankruptcy, and there is no appetite for that.

An amendment would work, but the right wording is essential. We should replace the pension protection provision with this:

Nothing in this Constitution or in any law shall be construed to limit the power of the General Assembly to reduce or change pension benefits or other benefits of membership in any public pension or public retirement system, whether now or in the future, accrued or yet to be earned.

The point of wording that simple and comprehensive is to assure that all state law obstacles to reform are eliminated. It would then be up to the General Assembly and governor to pass fair, reasonable reforms for each state and local pension.

That would leave only federal law as a theoretical obstacle. Reform opponents sometimes say the federal constitutional rule against impairing contracts would doom the effort. That’s simply untrue. Under federal law, courts have long allowed contracts to be reformed to serve a higher public purpose during emergency circumstances like Illinois unquestionably now has.

But – and here’s what reform opponents overlook – only fair, reasonable reforms properly tailored to the emergency at hand are allowable under federal law. In other words, the law that opponents claim is an obstacle in fact provides the assurance of fairness that pensioners want.

The key is ensuring that the amendment language isn’t booby-trapped or loaded with complications that might raise some state law issue. State law issues must be wiped out entirely because our state courts have shown they will use anything they can to stop reform.

Wouldn’t this approach have to wait two years? An amendment to our constitution would require approval of three-fifths of both houses of the General Assembly then voter approval in 2022.

No. We can act now and begin the savings now. If Illinois is serious about reform the legislature could immediately begin adjusting its annual pension contributions to a reformed schedule. Bond rating agencies and Illinoisans considering flight would take significant comfort in that. The message would be clear: “We are fixing this.” And the bipartisan supermajority needed in the legislature would all but ensure that the amendment would happen.

At Wirepoints, we earlier released a 112-page report including all the details on how this approach to reform can work. It includes specific reform options scored by pension actuaries, tailored to protect smaller pensioners and conformed to the federal requirements of fairness and reasonableness. Those options would save more each year than the Fair Tax would supposedly have raised. Visit our Pension Solutions page to see the details.

Voters asked for reform. Have lawmakers heard them?

*Mark Glennon is founder of Wirepoints.

Read about the solution to Illinois’ retirement crisis: Solving Illinois’ Pension Problem

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susan
1 month ago

Why not try litigating to force local school district to fully report and fund accruing OPEB obligations?
Nothing wakes sleepy taxpayer/voters up like a big new tax bill they never realized they had to pay.

DixonSyder
1 month ago

State retirees get their retirement health care for free, spouses and children have extremely low premiums. City of Chicago eliminated retiree health care several years ago and all court challenges were defeated. Millions saved by doing that and making retirees pay for cadillac health benefits. Compounded COLA increases as well could be stopped with just a standard year to year raise to meet increased costs. It some pension systems the COLA Is based on 3% of the initial benefit and it never increases. Also some are 1.5% for a limited time. It would be a start.

Mr_Common_Sense
1 month ago

Before you do anything, raise a few million bucks to pay for State wide massive mailing.

In the massive mailing, detail on how obscene and ridiculous these multi-million dollar pensions are, and make sure you also detail that automatic 3% cola every year.

Grease the wheels first, then try to amend the Constitution.

Good luck.

James
1 month ago

That’s SOP for any constitutional amendment, don’t you think? Weren’t well inundated with commercials from all sorts of media when the “Fair Tax” amendment was coming up for a public vote just a month ago? Don’t worry, any such amendment will be advertised and debated ad nauseum before it actually comes to the public voting on it.

Helen Corsentino
1 month ago

Now is the time to fix Illinois for our children and grandchildren. Amend the Constitution so our state can recapture its beauty and glory as the home of Abraham Lincoln. Our citizens have a right to know that their leaders are honest and will protect their rights as legal citizens of this great state.

LessonLearned
1 month ago

The politicians pretend the state will find a way to pay the pensions and the unions pretend to believe them. In the meantime the math keeps getting worse and Wirepoints is ignored. Sigh.

Tony
1 month ago

Just how funny how they go after the mob , gangs and criminals but in realistic way they are no different. They rip off the people who they say that they represent what a farce . I didn’t want these so called career politicians in. It all should be term limits so if there sandbaggers at least we wouldn’t have to deal with them. I hope no one I know complains about who voted them in because they need to shut the hell up!!!!!!!!

Robert Smolik
1 month ago

The terms Faur and Reasonable should be added before the words Pension Benefits

Thee Jabroni
1 month ago

Kinda funny,everyone gripes about whats going on in this crummy,corrupt state,yet everyone seems to run as fast as they can to vote for these democrats that keep running illinois into the ground-i dont get it!

Mike
1 month ago

Breaking Bad, Illinois government style.

Dysfunction is the norm.

Out of control.

Things keep getting nuttier and nuttier.

Tom Smithers
1 month ago

Mark – I’m familiar with Rhode Island and Arizona pension reforms but unfamiliar with how underfunded their pensions were and lack of services compared to where Illinois is currently. If the State were to claim a fiscal emergency is ours the same, worse, or better compared to these States; specifically Rhode Island when it successfully litigated to the Supreme Court? How bad were the local municipalities as well? Where any in receivership like Harvey or defaulting on their pension payments or other obligations due to the pensions. Arguably wouldn’t the plaintiff challenging reforms have scholars and state/municipal finance experts saying… Read more »

Daskoterzar
1 month ago

Pensions as well as retirement programs available to the tax payers should be subject to the performance of the investments made and the return. To make “Pension a Promise” is just stupid and we have the pandering Democrats and gutless pols to thank for this situation. Why the hell people continue to vote these people into office is beyond me. Has the population of Illinois’s public unions increased to a point that they actually control the elections? There are no guarantees in this world. Pensions should be structured like everyone else’s retirement plan. Save what you can into a 401K,… Read more »

Flash413
1 month ago
Reply to  Daskoterzar

The same people continue to hold office because of the public unions plus the people who know that voting for all of the” D’s” = free stuff. When you combine the two factions the numbers are overwhelming.

Last edited 1 month ago by Flash413
Ex Illini
1 month ago

Complex issue. Until there exists the political will to address it, combined with an Illinois Supreme Court that does not have a conflict of interest, there is no chance it gets addressed.

The commenters here have control of only one thing. Will they be here when the bill comes due?

Juicy Smollier
1 month ago
Reply to  Ex Illini

Another way to force the hand of these broke, leftist cities and states? Challenge the constitutionality of progressive tax schemes under equal protection. They are absolutely unconstitutional. The definition of PERCENT is literally fairness. It’s like God saying, “Oh sorry, a tithe for YOU isn’t really 10% … ” what a joke. The cause of all class warfare, past the leviathan and disgusting centralization of money and power in DC. The cartel.

JimBob
1 month ago

“Reliance damages are calculated by asking what it would take to restore the injured party to the economic position occupied before the party acted in REASONABLE RELIANCE on the promise. Reliance damages may be awarded after a breach of contract or by way of promissory estoppel.” I don’t understand how any public pensioner can be said to have “relied” on the pension promise given the lack of consensus on the meaning of the constitutional provision until a couple years ago and career job changes and legislative/administrative interpretations that have persisted over the years, including contribution “pick up” provisions that are… Read more »

Freddy
1 month ago

I know this is a very touchy subject from both sides but before we try to settle this by dueling at dawn there are some good articles at http://www.taxpolicycenter.org by Renu Zaretsky. Just search Michigan Pensions and the first one starts with “Are Public Pension” where she compares her townships Board of Trustees meeting about funding more into pensions and cutting services vs Aaron Burr / Alexander Hamilton duel. We in Illinois are not the only ones trying to fix this problem this is happening in many states. I think we should emphasize what CAN be done rather than what… Read more »

Governor of Alderaan
1 month ago
Reply to  Freddy

A union member awake at dawn? HAHAHAHAHAHA!

Freddy
1 month ago

Good One!

James
1 month ago
Reply to  Freddy

I’m all for it; the rest is bloviating.

Freddy
1 month ago
Reply to  James

Thank You. Have not heard or used bloviating in a while. Good word! I’ll try to be more concise but have yet to address medical costs (approx $73B) which are funded year to year.

susan
1 month ago
Reply to  Freddy

Can THIS be done?
While it is illegal to refuse professional service to any demographic based upon race or sexual/ religious preferences, could professional services be denied to a professional class deemed to be so predatory and sociopathic that their very existence threatens all of society?
If so, then medical professionals might explore denial of service attacks on those professionals of the Illinois Professional Political Industry. Teachers fall squarely into that class.

Governor of Alderaan
1 month ago
Reply to  Freddy

Illinois is worse off than nearly every other state when it comes to pension funding. That underfunded pensions are plaguing nearly all states/counties/municipalities and the feds proves that the entire concept of a pension is unsustainable. The private sector recognized this in the 1970s and moved employees to 401ks, but it’s not surprising that the dullards in government are 50 years behind the private sector and still haven’t embraced reality

Eugene from a payphone
1 month ago

The Federal government also made the transition from Civil Service retirement to Social Security plus Federal Employee Retirement defined contribution and brought increased stability to their expenses. Public employees should not be unionized.

Freddy
1 month ago
Reply to  Mark Glennon

Mark- I know it would not have much impact in the short term but it’s a start in the right direction. Just the fees if cut in half like Ca.is doing could save billions over the actuarial tables of 30 years or so. Do you know what CTU’s management fees are? TRS fees depending on the source range from $300M-$700M/yr with little returns even in a good stock market but who knows. Maybe IF Madigan steps down or not re-elected things could change? A statue is revealed after many smaller pieces are chipped away from a solid piece of granite… Read more »

susan
1 month ago
Reply to  Mark Glennon

The past few months have shown us how to fix problems: break windows and burn and assault. Then those who have been assaulted may be taxed in order to “prevent” future assaults. This might be translated into a more morally supportable ”denial of service’ self defense mechanism by exploited classes. Non-public-employed professionals (those without taxpayer guaranteed pensions and health insurance) might deny service to those predatory and sociopathic Political Class Elite who wield their political power in a destructive manner to exploit all non-political class taxpayers. To those who will cry that this is unfair or inhumane,: what else is… Read more »

NoHope4Illinois
1 month ago

Pritzker and Democrats all over are convinced a Federal Taxpayer Bailout of some sort will come from the presumptive President-elect Biden, allowing them to at least kick the can down the road a few more years.

Illinois is rotten and unfixable.

MikeInMadison
1 month ago

I would adjust the comment to reference Pensions Benefits which have been Funded, to try to differentiate between funded vs unfunded benefits.

Warren
1 month ago

Don’t punish the workers who always paid their share. Governments have continually failed to fund as the employees have. So now your answer is to screw us. No thanks

MikeInMadison
1 month ago
Reply to  Warren

the argument is that governments failed to fund because funding is a practical impossibility based on the promised benefit package. ie – this isn’t real….

Dale
1 month ago
Reply to  MikeInMadison

Mike: With all due respect, if you had witnessed the waste in government spending up close as I have, you would understand why we pensioners are upset. Many people say that the system was not sustainable, but yet state and local government regularly spent monies that could have been used to fund pensions on items that were truly wasteful and geared toward gaining political favors or re-election. We’ve all seen that in Illinois and now they want the pensioners to pay for it. The blame needs to be placed at the politicians’ feet where it belongs along with all the… Read more »

Riverbender
1 month ago
Reply to  Dale

One might point out that those future pensioners, as a group, have a lot to do with whom gets elected in Illinois so perhaps they should have helped to vote out the wasteful spenders instead of always supporting the same old political hacks.

Joey Zamboni
1 month ago
Reply to  Riverbender

Most of the unions representing the pensioners, financially support the (D) party, which rules with an iron fist here in IL…

Therein lies the problem…

The fox is in the hen house…

Governor of Alderaan
1 month ago
Reply to  Riverbender

Where was the union when the government supposedly wasn’t paying its share of pension contributions? The members paid their dues, wasn’t the union watching out for them? Why wasn’t the union demanding higher government contributions and higher taxes? Sounds like the unions really blew it!

James
1 month ago

That issue was brought up in the IL court system some 15 years ago where one such system (firemen pensions maybe) brought suit to force the government to “adequately” fund their pension system (presumably at actuarial levels, I’d guess). The court denied their claim since no retiree had yet missed being paid his pension in full and on time, essentially stating that the level of such funding was at the discretion of the government controlling it until such time as one of those conditions might apply. To my knowledge of it no such lawsuit has been filed in all these… Read more »

Juicy Smollier
1 month ago
Reply to  James

Nice try, but specious. The point at the end of the day is still, make deals with the devils, and you get what you get. Just pray you were born at the right time, right?

Governor of Alderaan
1 month ago
Reply to  James

Instead of whining you should be suing your union to claw back the dues you paid. Obviously the union was more interested in cozying up to Democrats than doing the job you hired and paid them to do

nixit
1 month ago
Reply to  Dale

Dale – While we can all agree govt is rarely prudent with expenditures, it’s unreasonable for employees to believe they’re entitled to every penny that was spent on everything but pensions. This whole argument that “if it wasn’t for pet project x, we could have funded the pensions” doesn’t really hold water because money is fungible. I could just as easily argue “if it wasn’t for employee compensation being so high, we could have increased funding for social services.” The truth is the overall compensation package is expensive, and current benefits today (salaries, healthcare, etc) are too expensive to support… Read more »

Juicy Smollier
1 month ago
Reply to  Dale

I love it when these guys, who makes deals with the devil, for generally really easy jobs and a lot of time off, act like we should hear their sob story when they are so surprised that the “government” (hacks) didn’t make good on their end of the bargain. Dale, you voted for them. And you know why. Time to start being an adult, be honest.

Governor of Alderaan
1 month ago
Reply to  MikeInMadison

There is no amount of government funding that can pay for these obscene, immoral, math-denying, greedy pensions

Juicy Smollier
1 month ago

Grand Moff Tarkin blew you up for saying that, how dare you Governor. Teachers shouldn’t get six figures for working 2/3 of the year, and then crazy pensions, AND health care, AND start at the age of 21-22 making all that loot? Yeah, they are poor … unreal the stuff these people think we buy. As if we were born yesterday or don’t have experience with real life, the private sector and its foibles.

nixit
1 month ago
Reply to  Warren

Define “punish”. What if the govt went back to 2009 and recalibrated everyone’s 2021 pension based on actual inflation rates over that time period? What if, going forward, the AAI/COLA calculation went back to 3% simple interest instead of compounded interest? If the top 20% of all pensions took a one-time 10% cut, their pensions would be back to where they were only 5 years ago, would that be OK? What if we stopped counting unused sick days as time served towards a pension and just paid them out at the rate at which they were earned? I would hardly… Read more »

Governor of Alderaan
1 month ago
Reply to  nixit

Punish (verb): what happens to taxpayers in Illinois when the greedy union parasites try to make them fund their outrageous, indefensible, immoral pensions

Riverbender
1 month ago
Reply to  Warren

What is your opinion regarding the teachers who are in school districts that picked up the employees share of pension contributions as a hidden raise,?
Just wondering.

Bill
1 month ago

“Nothing in this Constitution or in any law shall be construed to limit the power of the General Assembly to reduce or change pension benefits or other benefits of membership in any public pension or public retirement system, whether now or in the future, accrued or yet to be earned.”

Hmmm…

This conversation is definitely drifting in favor of government seizure of all retirement accounts and personal bank accounts.

Remember… Anything is possible when you disregard the Constitution (U.S. or Local).

Governor of Alderaan
1 month ago
Reply to  Bill

Agreed! The greed-crazed union parasites gladly support confiscation of private property to fund their immorally high, math-denying pension demands

James
1 month ago

I have no problem with amending the IL constitution going forward but think your proposal is more draconian than fair in that its including the ex post facto reduction of benefits already earned. Is that even legal? The rest of your proposal is harsh enough to apply to people who’ve met all the requirements for what’s been promised throughout their working careers, but the part where it all take effect retroactively strikes me as unwise at best in terms of financial commitments many have made in their personal lives and surely illegal because of it. That’s my take on it… Read more »

James
1 month ago
Reply to  Mark Glennon

Well, as far as I know I have read all such materials. But, that was some time ago and as your schedule spit them out at unpredictable time frames often far apart, I think. If you are miffed you needn’t repeat yourself. I’m not a lawyer, and my recollection is that you were. I’ll take your word for it, but I have to say it strikes me as unconstitutional to enact a law or amendment that treats any person or entity in a retroactive manner. If that’s legal, there’s no end to the harm it can do to people who… Read more »

James
1 month ago
Reply to  Mark Glennon

Again, I have done that as far as I know. I remember the lengthy version you wrote maybe a month or two ago where you layed out the whole case as you see it for enacting such an amendment as well as what it should say and include, although I’ve not seen any such specific wording from you until now. If that’s what you want me to reread, please tell me how to resurrect that lengthy article earlier, and I will do so. Meantime, please have the courtesy to lighten up on your harsh words to me here. Democracy allows… Read more »

James
1 month ago
Reply to  Mark Glennon

https://wirepoints.org/wp-content/uploads/2020/11/Solving-Illinois-Pension-Problem_Wirepoints_Special_Report_Sept2020.pdf”

Okay, if this is the relevant “damn materials” its likely you are right that I didn’t literally read all 200+ pages! Instead, I likely skimmed until reaching the heart of it, then read that thoroughly. Now, are going to fault me for that? if so, I think you’d have to likewise fault a very embarrassingly large percentage of your entire readership here who probably did likewise.

nixit
1 month ago
Reply to  James

“met all the requirements for what’s been promised throughout their working careers”

Many years ago, and for multiple years, retiring teachers in my school district received 2 final raises of 20%, or what amounted to a 44% pension spike. How does two outrageous pension altering raises at the end of a career equate to “what’s been promised throughout their working careers”? Was this communicated to the day they were hired?

James
1 month ago
Reply to  nixit

It was all legal. That’s not to say it was good public relations or even wise in the larger matter of state finances. Laws need to be obeyed only in the exact way they are worded and not in any wishful way others may choose to interpret them.

nixit
1 month ago
Reply to  James

You said: “what’s been promised throughout their working careers”

Were two consecutive and drastically pension altering 20% raises in the final two years of their working careers promised at date of hire? This is your claim, not mine. If they can provide that proof in writing, then I agree it should be honored.

I never said it wasn’t legal. Morally and ethically ambiguous? Without a doubt.

James
1 month ago
Reply to  nixit

Your assertion that any such end-of-career salary bump must have been expressed in writing is YOUR requirement here rather than one expressly required in IL law. In short, its your wished-for laws in IL and nothing more. I don’t know which school district you have in mind, but if they indeed gave two consecutive annual 20% salary bumps at the end of a career, then that’s the most egregious such situation I’ve ever encountered is truly worthy of your scorn. But, that’s assuming its true, something I doubt. I tend to think its something promulgated by the political rumor mills,… Read more »

Joey Zamboni
1 month ago
Reply to  James

I believe this was a common practice in some places.

I’m pretty sure a state law was enacted to put an end to this unlawful bump in salary for pension purposes…

James
1 month ago
Reply to  Joey Zamboni

“I believe” doesn’t really count, my friend. Others believe the world is flat, too.

johngalt
1 month ago
Reply to  James

Apparently some people “believe” that pensions can still be paid as promised if they only wish for it hard enough and keep pointing to the Constitution. Not sure how that method makes the money appear though.

James
1 month ago
Reply to  johngalt

irrelevant

Deep in the Heart
1 month ago
Reply to  James

Teachers referred to this taxpayer largess as “20 and 20.” I know of recipients in the far southwest suburbs around 2008; I don’t know how many years it was in practice.

Last edited 1 month ago by Deep in the Heart
James
1 month ago

I’m unfamiliar with that term. Explique vous?

Deep in the Heart
1 month ago
Reply to  James

A teacher explained “20 and 20” to me in this manner. . in each of a teacher’s last two years there were given a twenty percent raise. The rationale was, that would encourage them to retire and go onto pension and therefore be replaced by a beginning teacher at a much lower salary thus saving the district money in the long run.

James
1 month ago

Okay, I get that concept easily enough. Were you the one who mentioned this two consecutive years’ worth of 20% pay raises yesterday for career-ending employees? If so, its a bit more believable with a second example given now. I thought–and maybe still do–that it was the rumor mill “gone wild” on this topic. You know how rumors spread and become ever more expansive with the passage of time. Maybe its true; I simply don’t know. All I can say this is the most egregious situation I’ve every heard of for this concept at all and is distressing in what… Read more »

Juicy Smollier
1 month ago
Reply to  James

The odd thing is that you say this, but then in other places you want us to trust you (or how sincere you are in approaching the topic), or feel sorry for you. Choose a side, my man.

Aaron
1 month ago
Reply to  James

It was all legal? This was all done in part by passing an unconstitutional unbalanced budget for the last 20 years. When Rauner tried to fix it, the democraps responded with Rauner derangement syndrome. Observing the pension part of the constitution at the expense of another. . .how is that legal? Wake up Illinois. Nebraska is hiring.

Last edited 1 month ago by Aaron
Juicy Smollier
1 month ago
Reply to  Aaron

Bingo. James won’t be responding to this. Why? It wasn’t ever legal.

James
1 month ago
Reply to  Juicy Smollier

You seem to be essentially conflating some unnamed ideas here—illegal, popular and sensible come to mind—implying that legal things have to be both popular and sensible. They don’t. Things which become laws can be both dumb and unpopular. The IL public employee pension laws may fit into all of those categories.