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State Rep. Jeanne Ives (R-Wheaton), who is challenging Governor Rauner in the Republican primary, today announced how she’d like to tackle our pension crisis. It has three parts:

Pass a constitutional amendment to change the pension protection clause.

Require all new hires to enter a 401K-stlye self-managed plan.

Re-negotiate pension obligations with current workers and retirees. 

You’d think those steps would be obvious in light of the plain numbers on pensions, which have been clearly insurmountable for years. Not to Illinois candidates for governor.

What’s the proposal from Democratic candidates? Just pay them, each says, without offering a hint of a plan for how that could be done.

Rauner, too, has put pensions on the back burner even though they’re responsible for the bulk of our fiscal crisis. He piddled around earlier with “consideration-based” proposal championed by Sen. John Cullerton (D-Chicago) but didn’t get it done and it would have solved little.

Why on earth hasn’t he been pounding the table for these reforms and more?

They wouldn’t now get through the Democratic General Assembly. Yes, I get that, but this is a long-term battle the public must be made to understand. The governor has a unique position for setting the narrative but Rauner hasn’t used it. It’s an example why a Chicago Tribune editorial was right do say he just doesn’t “make the case.

And it’s hardly certain these steps would work or be sufficient. Amending the state constitution to allow cuts to unfunded liabilities would still be challenged in court under federal constitutional issues. Switching to a 401K-style system would work only for new hires and therefore wouldn’t cut pension debt. Re-negotiating could only be done through collective bargaining, binding current workers only.

But the scope of this disaster demands that any and all reforms be pursued — big and small, even if the chances of success aren’t good. We just don’t have the luxury of having any sure things at hand.

-Mark Glennon is founder and Executive Editor of Wirepoints. Opinions expressed are his own.

 

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Mr. Common Sense

What about taking more money out of the checks of Teacher/State employees for their pensions?

nixit

No can do. Increasing the employee pension contribution would be considered a “diminishment or impairment” unless something of value was given in return.

Andrew+Szakmary

Actually, the courts have made it crystal clear that these proposals will not work. Even if you managed to amend the Illinois Constitution, a tall order indeed, there is that pesky clause in the Bill of Rights part of the U.S. Constitution, which cannot ever be repealed, barring states from passing ex-post facto legislation and/or violating contracts. If you repeal the Illinois pension protection clause, you may be able to change terms for current employees going forward (although many legal scholars doubt even that), but there is absolutely no way, short of state bankruptcy, that you can change terms for… Read more »

jaherzrent

The Supreme Court U.S has “never held ..that the principles embodied in the Fifth Amendment’s Due Process Clause are coextensive with prohibitions existing against state impairments of preexisting contracts.” PBGC v. R. A. Gray & Co.,467 U.S. 717 (1984). Its “cases are clear that legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations.” Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976). Bankruptcy is still the best solution because it avoids the time and expense of arguing who is right and who is wrong about what governments can do to protect its citizens… Read more »

Jeannie is 100% correct…We need to change the constitution that has buried this State in debt.
I would also Cap pensions to $1,000,000 paid only for 10 years at $100,000 for only those that contributed to the pension fund.