Teacher pension funding unfair to Chicago?
Gov. Pat Quinn and Mayor Rahm Emanuel say it’s unfair for Chicago property owners to pay, not only city teacher pensions, but also pay teacher retirement benefits of suburban and downstate educators.
Rising pension costs and underfunded pensions, the result of decades of unrealistic politicians’ promises, coupled with underfunding – this year funding only 60% of the TRS – threaten to reduce state and city budgets for almost every other expenditure.
Some suggested solutions to reform teacher pensions, as Christie has done in New Jersey, would stop cost of living adjustments for future retirees, raise the age of retirement, or as requested by Emanual and Quinn, transfer the current state payment for teacher’s pensions – to the school districts.
Quinn said he doesn’t think it’s fair that only the city of Chicago directly pays its teacher retirement costs. Local school districts are the employers, he said, and “they should have a stake in the retirement of their own employees.”
RSD205 already pays the entire teacher’s retirement contribution and would now be forced to also pay the state’s portion of the TRS.
The state, which has failed in its responsibilities to fully fund the pension costs, despite the recent 67% increase in state income taxes, will now shift an additional $700 million in taxes to local property owners.
However, Illinois Senate Majority leader, John Cullerton, stated in Chuck Sweeney’s recent column,
“In 36 states and the city of Chicago, the school district pays the employer portion of the pension contribution. In Illinois outside of Chicago, the state pays the employer portion. There’s a small amount school districts pay,” Cullerton said.
“So we are saying to school districts, you’re not responsible for the underfunding we’ve accumulated over the years, but going forward, when you negotiate a contract like you did in Rockford, you should be responsible for the amount of money you would have to put into a pension fund when you hire a teacher so you have some money in the system when they retire.”
Cullerton said this change should be phased in, “and it does not need to result in higher property taxes.”
Who is Cullerton trying to kid? Cedric Lewis, Chief Financial Officer for the Rockford School District, stated it would cost local property taxpayers $36 million a year to fund its pension obligations. Believe me, it would eventually result in an increase in local property taxes.
However, let’s be fair to Chicago, considering that it is Chicago politicians who have controlled the state for decades and are primarily responsible for our current financial crisis.