As Springfield lawmakers grapple for a pension fix by May 31, state workers anxiously anticipate expected changes.

Like sands through the hourglass, so are the days leading up to a solution to Illinois’ pension liability. And this is one soap opera saga to which onlookers—particularly state workers—would just as soon see an end.

Amidst pension debates during the final few weeks of session in May, state workers began to wonder to what extent potential changes to Illinois’ pension system, namely changes requiring workers to pay more toward retirement, cutting cost of living adjustments (COLAs) and raising the retirement age, would affect their ability to retire, travel and afford health care.

Playing Dominos

Illinois’ pension liability, approaching $100 billion, has become an albatross for the state as well as families, costing taxpayers an outrageous $17 million per day. Continuing to kick the can down the road could lead to a liability as high as $400 billion by 2045.

The pension deficit has been a problem that has mounted slowly but steadily due to failed payments into the five state employee retirement systems, including legislators, judges, downstate schoolteachers, state employees and university employees. Lack of increased employee contributions into the pension system over time and poor investment returns on public pension system assets have also contributed to the liability.

Consequently, the pension problem has created a statewide domino effect of difficulties, bleeding into other areas of the state budget, most notably education, which Governor Pat Quinn, in his $62.4 billion budget address, announced would see cuts of about $400 million. Education is an easy target for cuts, making up about 27 percent of the state budget.

But local community colleges and universities are already feeling the pinch due to a lack of state dollars. Heartland Community College and Illinois State University are both witnessing drops in student enrollment, largely due to cutbacks in state funding; especially MAP grants, which have forced state universities and community colleges to raise tuition. Moreover, an educated workforce is the backbone of a strong economy, an economy that in Illinois is currently seeing 9.3 percent unemployment and close to 1 million people across the state looking for work.

Finding the Best Solution

The pension problem, combined with a $9 billion backlog in unpaid bills, has lawmakers scrambling for a solution before the legislature adjourns May 31. Several bills have been presented but one has yet to reach Quinn’s desk without criticism from teachers unions, Democrats, Republicans or the governor himself. Among the most discussed legislative proposals include a bill introduced early last year by Senate President John Cullerton. The legislation gives state workers a choice between keeping their current retiree health care benefits and accepting a lower COLA or retaining the annual 3 percent COLA and losing access to retiree health care. Competing with this proposal is legislation introduced by House Speaker Mike Madigan that increases employee contributions to pensions by 2 percent. The bill also changes the retirement age to 67 and decreases annual COLAs.

Another controversial proposal includes a cost shift aimed at moving the costs of pensions from the state to schools, colleges and universities. The proposal has received strong resistance from Republicans who claim such a move would only serve to raise tuition and property taxes.

In response to the proposals, anger and worry has set in among state workers and retirees who believe they are being required to clean up a mess they did not create. Still others believe that everyone must sacrifice for the good of the state. For now, the outcome of the uncertainty regarding which plan lawmakers will approve has caused some state workers, including teachers, to retire early in order to retain as many benefits as possible before any new plan takes effect.