In recent years, Illinois residents and businesses have seen historic increases in taxes. Illinois continues to be a structurally unfriendly environment for both families and businesses alike, and further tax burdens will simply drive jobs and people from our state. These most recent rate increases bring in over $6 billion a year in additional revenue, but despite this increase, our unfunded liabilities continue to grow and the number is quickly approaching $100 billion.
While that number is too large to put into context, its effects are dramatic. Increasingly, more taxpayer dollars are going to fund pension liabilities rather than essential infrastructure, education, research, or economic development. Last year alone, Illinois roughly spent more on pensions and debt repayment than on elementary and secondary education. As growing pension liabilities continue, vital services, education, infrastructure and human services will continue to face drastic cuts.
I believe State employees have worked hard and faithfully, and deserve a retirement plan that is dependable yet affordable for taxpayers. Change will not be easy; however, adjustments are needed to stabilize our pension system and ensure that the State can continue to offer retirement benefits to its employees, now and in the future.
We need to modify the existing plans to minimize the weight placed on those who are retired or close to retirement. To be beneficial, these changes will need to affect many areas including retirement age, total benefits, and contribution levels. Unfortunately, one major stumbling block in pension negotiations remains a provision in Illinois’ constitution that guarantees pension benefits will not be “diminished or repaired.”
This problem affects everyone and I believe the taxpayers should have the ability to provide their input in the state retirement system and should be able to make the changes needed to have a sustainable system.
In response, I have sponsored a constitutional amendment to the Illinois Constitution, HJRCA11. If approved by the voters of Illinois, this provision would repeal the stipulation in the Illinois constitution that prohibits changes to the unmaintainable pension systems. We all contribute to this benefit system and therefore deserve the opportunity to redefine the structure if necessary.
Currently in Illinois, a constitutional clause can be modified per article 14, section 2, by a vote of the legislature and then by a majority vote of the citizens of Illinois in the next general election. The soonest HJRCA 11 could be brought to the voters would be in 2014. This is the right of taxpayers.
Our state is facing nearly $100 billion in unfunded pension liabilities, more than $54 billion in unfunded retire health care benefits for government workers, and $15 billion in pension obligation bond debt. As citizens of Illinois, we all understand and share in the difficult situation our state is facing. Structural change is necessary to ensure that the state can offer retirement benefits to its employees that have contributed faithfully over decades.
It’s time we do something historic that doesn’t involve tax increases.