By: Mark Glennon*
We’ve been closely covering the confusion and potentially extensive use of “intercept” rights of Illinois’ police and firefighter pensions, as well as IMRF — the big statewide pension for municipal employees. That right allows a pension that doesn’t receive its required annual contribution to force the state comptroller to seize state money otherwise flowing to the sponsoring city or town and forward the money to the pension.
House Bill 4684, which passed both houses of the General Assembly, would grant a similar right to SURS, the State University Retirement System. For community colleges, county treasurers could also be forced to intercept county money.
The bill is on Governor Rauner’s desk and there’s no indication yet whether he will sign it.
The bill would be yet another case of Illinois pensions being, um, detritivorous. (My high school daughter offered that when I asked her for the right word — something about feeding on dead animal or plant matter.) Basically, the pensions are taking dibs on the bones — trying to ensure they get paid when it becomes clear not everybody will.
Why stop with SURS? That’s the obvious question. Won’t the rest of the state pensions try to get something similar?
The bill was sponsored by Rep. Robert Martwick (D-Chicago). You may remember him from earlier this year when he floated the idea of the state trying to float a $107 billion bond offering to pay off state pension debt. Financial experts immediately scoffed.
Interestingly, however, this bill for SURS passed both houses unanimously — no opposition from reformers or fiscal conservatives. As best as I’ve been able to determine, there are two explanations.
The first is the bill was intended to remedy a piddly contribution delinquency by Chicago State University — something like $13,000. Obviously, that’s no reason to pass such a broad measure.
The second is a growing sense of resignation among financial reformers. “Sure, just take the whole thing…Let the pensions take everything…Just blow it up.” I hear comments like that more and more frequently, as I did when asking around for an explanation of the vote.
Detrivitorous. Positively, indubitably detrivitorous.
*Mark Glennon is founder and executive editor of Wirepoints.
For further background on the intercept and Harvey’s plight, see these earlier articles: