Town Hall speakers warn of state pension shift to districts
State Sen. Daniel Biss opens a a public forum on "The Long Road to Pension Reform: What is Cost Shift and Why Does it Matter?" with Erika Lindley, Dick Ingram and Louis Kosiba held at Temple Beth Israel in Skokie. | Dan Luedert~Sun-Times Media
Forum on public pension reform
WHAT: open panel
WHERE: Temple Beth Israel, 1601 Dempster St., Skokie
WHY: all five state pension funds are $82 million in debt
Updated: September 24, 2012 6:09AM
With Illinois legislators returning Friday to Springfield for a special session on pension reform, Thursday night’s town hall meeting in Skokie was especially timely.
More than 150 people, mostly retirees on public pensions, filled Temple Beth Israel with State Rep. Dan Biss, D-17th, leading the panel forum.
The main topic on hand was the possibility of shifting the state’s share of employer pension costs to school districts outside Chicago and to community colleges and universities.
“We’re talking about a $600,000 to $700,000 million increase. How will school districts do this? Ask for tax higher levies? Legislators just laugh because politics is at play when you ask for higher property taxes,” said Erika Lindley, executive director of ED-RED, an advocacy group for suburban schools that monitors state legislation.
“We could give schools a long time to plan and budget for cost shifting, say 10 to 15 years, which would be three teacher contract cycles,” she said.
Lindley also cited a legislative proposal that would make schools pay for pensions at a rate of 1 percent per year the first five years, but later the proposal was changed to 0.5 percent to slow payment down even more.
In all, the state’s employer share of costs covers five pension systems, with Teachers’ Retirement System being half the total fund.
The total debt of all five is $82 million; the TRS share of this sum is $42 million.
Without flexibility on property taxes, Lindley suggested loosening up unfunded state mandates for schools.
“Make mandates more flexible so schools can be more nimble with money,” she said.
Dick Ingram, executive director of the Teachers’ Retirement System in Illinois, said using “real actuarial math” based on statistics and risk was the only way out of debt.
“Actuary math is not used in Illinois to guarantee funding,” he said, adding any pension changes must be constitutionally approved in Springfield so that future pensions will be filled for today’s young teachers.
Former teacher Sally Leeborg, who retired from Evanston School District 65 in 2002, believed a graduated tax structure as a measure of income placed higher taxes on affluent families’ ability to pay.
“Now, we all the pay the same percentage. I’ve seen the figures with a graduated tax system and it would bring a lot more revenues,” she said.
Biss said pension reform should not be approached as a “philosophical problem.”
“Our pension problem is deeper than any other state. We’re talking about a serious debt problem with everybody getting hurt,” he said.
“It’s important we don’t organize ourselves as sides. That’s my plea.”
Ingram came to Illinois in 2010 as head of the New Hampshire Retirement System.
“The state of Illinois has not been a worthy actor for a long time. The consequences of untrustworthiness must be brought out now,” he said.
For years, Biss emphatically told the audience that legislators did not tell the truth about pensions.
“ We lied, we lied and we lied about how much stuff costs. That’s the primary problem and how do you finance those lies? Borrowing money and school districts borrow, too.
“And you perpetuate those lies with voters by telling them we’re cutting waste, but the true problem is we spend more than we have,” Biss said.