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Pension Reform Awaits State Senate Candidates

Morrison and Friedman explain the role they see solving one of state’s major problems.

The only certainty about the failure of the Illinois General Assembly to pass pension reform legislation when its current session ended Thursday is there will be a new senator from either Deerfield or Highland Park ready to make a difference in January.

, a Republican, and , a Democrat, are the two candidates competing to succeed retiring state Sen. Susan Garrett (D-Lake Forest).

The winner of the Nov. 6 general election between Morrison and Friedman will be required to deal with state’s $83 billion unfunded public employee pension liability. The legislature debated a number of proposals but failed to pass any of them.

Unless a special session is called and legislation is passed then, the problem will await Friedman or Morrison in January. The issue is not new. The burden has been growing for more than 40 years, according to .

They both have ideas about what to do, agreeing on some and disagreeing on others. Neither is willing to further drain Illinois taxpayers to retire obligations which have been growing for a generation.

“Ultimately, I will support any solution that results in a properly funded retiree benefits system so long as it does not further burden Illinois families and businesses,” Friedman said.

Morrison will not increase revenue to pay for the unfunded benefits as well. “No new taxes to fix the pension mess,” she said.

When the negotiations between Democratic Gov. Patrick Quinn and the leadership of both parties in the General Assembly broke down, one of the major issues was an idea supported House Speaker Michael Madigan shifting some of the burden to local government. Quinn and House Minority Tom Cross (R-Oswego) opposed it.

Both Candidates Oppose Shifting Proposal

Both Friedman and Morrison are against taking the liability away from the state but for different reasons. Friedman sees the idea as one that will increase property taxes while Morrison believes it will hurt education.

“Shifting the pension burden to local governments would destroy public education,” Morrison said. “I cannot support a position that solves a Springfield created problem by erasing local education.”

Friedman sees the connection between education and shifting the load to local government because he thinks the bulk of the requirement will fall on school districts which are primarily funded by property taxes.

“It is a property tax increase,” Friedman said of the shifting proposal. “Under no circumstances will I vote for something that will result in increasing property taxes.”

What Impact Can a Newcomer Have?

Though one of them will be a rookie legislator in January, they both believe they can have an impact with their vote. Morrison sees her first obligation to her district and will vote accordingly possibly setting her apart from others in her caucus.

“If any piece of legislation, be it social issues, education or campaign finance reform is bad for the 29th District, then you can count on my vote against it,” Morrison said. “All legislation is a race to 30 votes.  If there is an idea or proposed legislation that is good for my district then I will definitely support it.  If it is bad, then they can count me as a no.”

In Friedman’s case he not only knows his vote matters but he hopes to be a member of the Senate majority pending the outcome of the election. “I can vote,” he said when directly asked about a newcomer’s impact.

“Advocating for common sense pension reform is important,” Friedman said. “I’m looking forward to four years of being a part of a Republican majority in the State Senate.”

Daniel Krudop June 06, 2012 at 02:25 PM
From the Illinois Constitution: ARTICLE XIII, GENERAL PROVISIONS, 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. Until this is removed from our constitution, there can be no effective pension reform. I haven't heard a single legislator or candidate propose this. The employee unions will protect their benefits, even if it requires 100% of all taxes raised to pay them. Of course they suggest that all we need to do is increase taxes of millionaires and businesses to cover the shortage. Indeed, the shortage is only approaching 15% of Illinois' GDP. Even with Quinn's tax increase, the state will be $8.3 billion short on June 30 if nothing is done. The majority of that money, roughly $5.5 billion, will come in the form of unpaid bills from companies that provide everything from meals for the elderly to toilet paper for prisoners. Another $1.2 billion is composed of Medicaid payments the state will push off until the next budget year, while the remaining $1.6 billion is owed to companies for tax returns and health insurance bills for state workers. Therefore, all we need is about a 20-25% tax on our GDP and the problems will all be solved without affecting employee benefits.
Jim Philip June 06, 2012 at 11:46 PM
Let’s be clear the current pension problem has little to nothing to do with benefits it is instead caused by decades of governors and lawmakers from both political parties who have chosen to spend available revenues on other state programs rather than sock enough away to pay for the pension benefits workers were earning. The dollars not put into the retirement kitty in turn did not earn any return on investment or compound over the years, so the gap has grown ever increasingly larger. The partial pension payment holidays (SB 27) taken in FY 2006 and FY 2007 is only one example of how dramatically not contributing the required state contributions can lead to increasing the state’s unfunded liability in this case by $7.1 billion in only three years. During that period, no retirement benefits were increased but because interest on the unfunded liability compounds at between 8.0% and 8.5%, any payment shortfall, such as the pension holiday, quickly increases the unfunded liability. “The deadly combination of nearly 30 years of systematic state underfunding of its employer contributions to the pension systems, followed by the cataclysmic decline in asset values caused by the national meltdown in financial markets over the last year, has combined to create an all-time high in the state’s unfunded pension liability,”
Jim Philip June 06, 2012 at 11:47 PM
continued: To know how to fix the problem we must first know what caused the problem. The problem has been caused by drastic underfunding of all state pensions except one, IMRF which, wait for it, has a mandatory funding provision. The answer lies in 1. Re-setting the actuarial clock to 100% funded in 40 years using sound actuarial assumptions of level payments. 2. Mandatory funding like the IMRF pension fund enjoys. 3. Negotiate with labor to participate in some reduction in benefits and or increases in employee contributions. The road will be rough for all but it is obtainable if all parties will look at what the problem is and then how to fix it.
Shelly Jaffe June 07, 2012 at 08:17 PM
This comment could only come from a politician with no convictions. “If any piece of legislation, be it social issues, education or campaign finance reform is bad for the 29th District, then you can count on my vote against it,” All legislation is a race to 30 votes. If there is an idea or proposed legislation that is good for my district then I will definitely support it. If it is bad, then they can count me as a no.” Really Mrs. Morrison, Really?
William schur July 15, 2012 at 11:48 PM
How about lowering the state income tax, Julie? How about endIng pension abuse? How about re-claiming Illinois state government from the political hacks? How about electing an independent candidate who fought for his country as a Navsl Aviator and cares for our children as a pediatrician? Vote for Arie Friedman. Reject Julie and her Democrat party bosses. It's a new day for state government. Vote for freedom. Vote for Arie. William G. Schur Highland Psrk
William schur July 16, 2012 at 12:22 AM
Sorry for the typo. It's "Naval Aviator." Anchors aweigh, Arie. We've set our course for victory and are under way. To paraphrase John Paul Jones, we have just begun to fight. William G. Schur Highland Park

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