WTTW’s Chicago Tonight held a very interesting panel Monday night on the chances of passing a constitutional amendment to solve the Illinois public pension crisis in the wake of the state Supreme Court’s recent ruling on pension reform efforts from Springfield.
The panel included state Rep. Tom Morrison (R-Palatine), University of Chicago law professor Julie Roin, and Illinois Federation of Teachers President Dan Montgomery. What each panelist said after every question asked spoke volumes.
Right off the bat, the only one who doesn’t acknowledge the gravity of this crisis in the union boss.
Carol Marin: “Is this a crisis?”
Morrison: “Yeah, absolutely.”
Montgomery: “Well, uh… no.”
So why isn’t it a crisis for the unions? It basically comes down to the only two options left for Illinois residents to take: radically raising taxes on everyone (as the unions advocate) to fund the $156.5 billion in debt liabilities from public pensions and retiree healthcare – or – passing a constitutional amendment (as reformists like Morrison advocate) that would change the language of the pension clause that the state’s Supreme Court has strictly interpreted to mean that state spending on pension benefits is untouchable (but feel free to get creative on funding those untouchable spending obligations).
Even if enough reformists could get elected to make the latter a reality, it’s becoming more and more accepted that modifying the language of the constitution’s pension clause would almost surely only apply to new hires (as Roin rightfully identifies and Morrison freely admits). In other words, all of the billions built up in the state’s massive unfunded pension liability thus far cannot be touched.
As Marin also pointed out, reformists currently lack the votes in Springfield to even think about passing any constitutional amendment. House Speaker Michael Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago) are miles away from even considering that possibility today. They’re also in no mood to be acting fiscally responsible with their spending priorities anytime soon after voting themselves a pay raise, lavish renovations for the state capitol, and millions of dollars in pork.
The debate on what to do about this crisis is ultimately a battle between free market supporters who trust citizens to have more control over their own retirement and healthcare vs. paternalistic statists who believe citizens cannot be trusted to control their own future. That’s why the latter group is against any effort to switch retirement systems for future hires to a 401(K)-style plan like we do in the private sector and push for radically raising taxes on private sector workers to fund public sector workers’ retirement instead (you have to admit, it’s a pretty sweet deal).
In a talking point that’s been widely used amongst the left, Montgomery also tries to point to a “union-negotiated compromise” in Cullerton’s pension reform proposal that ultimately failed to pass the state legislature. What they don’t bother telling you is that, under the most optimistic analyses of that bill, that solution would’ve only solved about 5% of the pension debt problem.
Marin also asks Morrison what he thinks of the corporate tax breaks Gov. Pat Quinn (D-Ill.) has given to essentially bribe companies like Sears, CME Group, and Navistar to not leave the state’s hazardous business climate and take their jobs with them, to which Morrison mentions how he’s consistently voted against all those exemptions, and rightfully so, as it’s a textbook case of crony capitalism where government is picking winners and losers.
The bottom line is the voters of Illinois are ultimately going to have to decide what happens next, whether they want to accept that responsibility or not. Perhaps the best question asked by Marin that night was: “There doesn’t appear to be a lot of constituent outrage, does there for this discussion?”
And Roin hit the nail on the head:
“Well, there’s not constituent outrage in large part because people don’t want to believe it because if they believe it, they’re going to have to pay higher taxes. Considerably higher taxes. And the voters of Illinois have been willing to put up with financial shenanigans from their legislatures for years. And they do it because they like the politicians who think if they can just put off the unpleasant news for a few years, they’ll be out of office, they won’t have to worry about it. I think that the voters of Illinois have also said well, if I don’t have to worry about it this year – maybe something ‘nice’ will happen next year and the problem will go away. But nothing ‘nice’ has happened, nothing ‘nice’ is likely to happen and we are coming to this point where the baby boom generation is starting to retire and they are going to be cash liabilities which have to be paid.”
Couldn’t have said it better. I saw it back in 2011. Despite telling voters he was going to do it for months going into the 2010 gubernatorial election, when Quinn followed through on his campaign promise to raise the state’s income tax 67% in 2011, countless voters were outraged and ticked off and wanted to “do something about it.” But over the next few months, that outrage subsided, the move was quickly forgotten, and most voters went back to their normal routines of not paying attention to what Springfield is doing.
In other words, it’s essentially a tax for not paying attention to what your leaders are passing or not motivated to participate in the electoral process when it counts.
You ultimately can’t force people to care, but by the time they finally see the tidal wave of taxes coming straight for them, it may be too late…