Gov. JB Pritzker hasn’t been shy about his progressive agenda since launching his first gubernatorial campaign in April 2017, earning plenty of devotees and detractors.
But for all the hot-button topics, successes and failures, it’s possible no single issue will have a more significant bearing on the way Pritzker leaves his mark on Illinois than how he manages public pensions.
A comprehensive summary is implausible, especially when some sources trace the pension crisis back more than a century.
Got free time? Visit tinyurl.com/Pension1916 to download the 328-page report of the 1916 Illinois Pension Laws Commission. Come for the reference to “His Excellency, Governor Edward F. Dunne” and stay for quotes like this:
“The general condition of pension systems operating under the laws of Illinois may be correctly described as one of insolvency. That is to say, viewed from the standpoint of sound finance and of having the necessary reserves to carry out the payment of pensions as provided in the laws, there are immense deficiencies in the existing funds. In short, the financial provisions are entirely inadequate for paying the stipulated pensions when due.”
Sound familiar?
As Capitol News Illinois detailed last week, the present concern – that is, beyond the obvious – is whether the Tier II system lawmakers created in 2010 squares with federal law. The idea was sound: given the ironclad state constitutional protections for promised benefits, the General Assembly created a less generous retirement plan for state employees hired after Jan. 1, 2011.
Promising less reduces the state’s overall obligation. Eventually, everyone under Tier I will stop collecting (the actuarial tables remain undefeated) and if the government can get its finances straight, perhaps a restored balance is plausible.
However, there’s the pesky federal legislation called “Safe Harbor” laws that stipulate any replacement for Social Security can’t be any worse than what that system promises. (Whether Social Security is solvent is a topic for Capitol Hill analysts.) The issue evokes Chris Rock’s comments on the minimum wage law: if your boss could pay you less, they would.
Pritzker, famously not an idiot, acknowledged Tier II won’t survive if it violates Safe Harbor. But given all his (fairly earned) preening on his administration’s paying down of a massive bill backlog and improved credit ratings, the most he can politically promise is the state must “be exceedingly careful” about any financial steps.
The state cannot risk letting a federal judge write the solution. Pritzker can’t ignore the voting power of public unions. Going back to Tier 1 is a nonstarter, especially given widespread staffing shortages.
Whether Pritzker can thread these needles will decide if his tenure is legitimately transformative. It won’t win national attention, but Illinois needs a solution.
• Scott T. Holland writes about state government issues for Shaw Media. Follow him on X, the platform formerly known as Twitter, @sth749. He can be reached at sholland@shawmedia.com.
