Illinois has a multifaceted budget problem. Pension maintenance and management debacles are one of the primary causes of our current budget deficit problems. Our pension funds have been underfunded and our pension management and investments have not been performing which has created a continuing and growing pension deficit.
When one cannot pay bills and manage their expenses, the individual or entity can limit spending, find additional revenue, and/or revise any savings and investment strategy to make better use of existing funds. Otherwise, the person or entity will likely become insolvent, which leads to bankruptcy. PENSION FUNDING and PENSION REFORM must take place soon lest Illinois face the realistic possibility of declaring bankruptcy.
STEPS TO PENSION REFORM:
- Consolidation of pension management departments by a competitive process based on costs of operations and performance which shall be revisited periodically would be a good start to spending more responsibly.
- We need to Cooperate, Collaborate, and Coordinate with all governmental entities to cut spending and maintain adequate services.
- With improved life expectancy, pensions terms must be readdressed to be both fair and manageable going forward.
The bottom line is this: Raising existing taxes or additional taxes will not address our budget problem. The overall psychology of Springfield regarding fiscal policy and appropriated funds must change.
Your current pensions, though, are safe. The only way to alter benefits due to those with vested pensions or those actively paying into a plan is if they actually agree to a change. Our Illinois Constitution of 1970 provides in Article XIII, Section 5, “Pension and Retirement Rights: Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” Furthermore, the United States Constitution also provides protections against a state undercutting an existing contract.
With this in mind, the critical fear anyone with a pension should have is the prospect of an Illinois state bankruptcy. Such a development would not be unheard of, with recent examples of Puerto Rico and Detroit coming to mind, and various other municipal examples throughout the country. While a court battle would loom over interpretation and application of Illinois Constitution’s protections in conjunction with the bankruptcy laws, it goes without saying that bankruptcy would not be ideal for Illinois pensioners.
We owe it to ourselves to finally face this issue head-on. Use your voice and Vote Zulkey on March 20, 2018 to show that you demand honesty, transparency, and action on Springfield’s budgetary woes. After all, the real looming threat to Illinois pensioners’ is the status quo in Springfield.