LaHood column: Illinois Senate 'finally' getting serious about pension reform

This week, the Illinois Senate finally seemed to get serious about the pension funding crisis. The perception of getting serious and the reality of being serious are two separate issues; however, a small step was taken.

Senate Bills 1 and 35 were acted on by our chamber, with mixed results. I joined with my colleagues on both sides of the aisle to support one proposal, but could not support the other.

I did not support SB 1 because it was mere "window dressing" by Senate President John Cullerton, D-Chicago. His proposal only affected the Teachers Retirement System and only active employees. To achieve true pension reform all five pension systems, all pensioners, all active employees and all benefits must be on the table as part of the negotiations. Both business and labor groups were opposing the Senate President's plan.

I did support SB 35 because so far it is one of the most, well-thought out plans we have seen to date. Any pension reform plan must strike a careful balance between meeting constitutional muster and ensuring that Illinois reforms the nation's worst level of pension funding at 39 percent. Maryland, as an example, has an AAA bond rating and will have 80 percent pension system funding by 2023.

Based on the lack of pension reform, our public institutions of higher learning recently took a hit on their bond ratings. On Tuesday Crain's Chicago Business reported that four universities had their credit rating lowered and the "outlook" was turned to negative for three others. This means that schools like Western, Illinois State and the University of Illinois will all have higher costs associated with selling any long-term bonds. The costs are then passed onto the families when their child enrolls at a college through higher tuition and fees. Additional costs are also shuffled to the state's taxpayers because these schools are state-supported.

Pension reform will not be easy, nor should it; this is the most complicated problem facing Illinois at this time. The pension payment for the upcoming Fiscal Year 2014 will be $6.8 billion from the General Revenue Fund. That $6.8 billion will only continue to rise, thus constraining our ability to appropriately fund education, public safety and maintain quality infrastructure.

I am optimistic that we will soon vote on a plan, which will be fair to the parties involved. Time is of the essence, because the public's appetite for continued political bickering is over! The longer we wait for a reform package to pass will only continue to drive the long-term costs higher.

We must seize the day and get Illinois moving forward again.

About the Author

Darin LaHood is an Illinois State Senator from Peoria, representing the 37th District, which includes Peoria and Galesburg.