Officials Say Changes to Pension Systems and Leaner Government are the Answers
Not since the impeachment of Governor Rod Blagojevich has there been such bipartisan agreement in Illinois. While there may not be more money coming in the forms of revenue or the American Recovery and Reinvestment Act, the answer to budget crises at every level of state and local government may be to become more efficient, i.e. lean.
That was the consensus of the eight elected officials who answered questions during the fourth annual “Breakfast with Your Legislators” held Sept. 29 on the campus of Saint Xavier University of Chicago. After an hour of mingling with the capacity crowd that included local business leaders and members of the media, the eight participated in a panel discussion, fielded questions and presented their views.
State and Cook County officials agreed that the pension systems should be changed because they are cost inefficient as well as difficult to fund under the current formulas for contributions and eligibility.
“Our [state] pensions are supposed to be funded at ninety percent, and that number was just pulled out of a hat. A problem is that people are retiring early and going to work elsewhere. They’re living longer, and it’s more costly [to the pensions systems],” said state Rep. Monique Davis (D-Chicago). “One solution may be to require greater employee contributions. It would behoove us to make changes.”
Everyone agreed with state Sen. Edward Maloney (D-Chicago) that changes would affect only those who enter the system after new pension legislation is passed. A two-tiered system would feature current retirees, who entered the pension system under the current rules, and future retirees, who will enter after new rules are created.
“Anyone signed up for a deal, that’s the deal you should get,” Maloney said. “I think we have to look at new people entering the system. I think a two-tier system is going to get a second look. And I don’t think it will keep anyone from entering the teaching field. Pensions aren’t why people go into teaching.”
“It [the formula for those already in the pension system] isn’t going to change. That’s guaranteed by the Constitution,” said state Rep. Kevin Joyce (D-Worth), who is chairman of the House Appropriations-General Services Committee. Addressing the issue of underfunded state pensions, Joyce added, “The governor balanced the budget twice by taking pension contributions. Now it’s time for us to live up to our obligations.”
Cook County Commissioner John Daley (D-11th) agreed that changes to the pension system are necessary. He said, “The retirement age for government employees is antiquated. That law was written when people didn’t live as long.
The Cook County Board also has pension woes. Said Commissioner Elizabeth Gorman (R-17th), “Cook County owes $104 million in pension obligations it hasn’t fulfilled.” She added that pension laws have changed for new Cook County hires.
As for making Cook County government leaner, Commissioner Joan Murphy (D-6th) suggested a desk audit of every employee is essential to determine which jobs are necessary and which can be eliminated. Murphy is the chairwoman of the Cook County Board’s Construction Committee and its Finance-Labor Committee.
“Cook County [government] has 20,000 jobs, all under the office of the board president,” Murphy said. “A desk audit is essential, and it must be done by an independent (outside) auditor.”
Joyce agreed that government waste must be eliminated, and he drew a laugh when he said, “Once a program is created, it is virtually impossible to get rid of it.”
“Getting tax delinquent properties back to being tax producers is crucial,” said Blue Island Mayor Donald Peloquin. “We need local government or developers to get those properties back to where they produce tax revenue again. That and population density, where large numbers of people live and shop in an area, are essential. That’s what we have in Blue Island, where residences are in or near our commuter rail lines and our shopping district.”
The Chicago bid for the 2016 Sumer Olympic Games was rejected by the International Olympic Committee. Still, Peloquin said the Olympic spirit seemed to have brought governments on every level together.
“I haven’t seen this type of spirit of cooperation in the 24 years that I have served as mayor,” he said. “It is promoting fresh thinking about regional approaches and solutions. That’s not just for Chicago. It’s for the whole region.”
At the breakfast event, held just days before the Olympic host city announcement, Ald. Ginger Rugai (D-19th) expressed optimism about the jobs that would come to Chicago if it were selected to host the games, noting that the biggest employer in her 19th Ward is Saint Xavier University, the host of the event.
Maloney added that recent changes in the state capitol have invigorated state government as well.
“The mood and spirit of cooperation in Springfield is much better now than it was under the previous administration,” Maloney told the audience. “We will go back and get down to work.”
Peloquin said that construction projects would be major infusions to the area economy. He suggested that connecting interchanges would create jobs. “The only two interchanges in the country that aren’t connected are here [in the Southland]. Connecting I-57 to I-294 would create thousands of construction jobs.”
Everyone agreed that federal stimulus money would be a boon to the economy, but no one could explain exactly why the South Suburbs didn’t seem to get much of it. Murphy and Joyce tried.
“The state didn’t direct any of the [stimulus] money to CMAP [Chicago Metropolitan Agency for Planning]. That’s why none of the money went to the Southland,” Murphy told the audience.
Joyce said that while that previously was accurate, that funds were again going to CMAP. He added, “Some of the [federal] grants require matching funds, and that has been a problem. The application process also slowed things down, especially when bids were involved instead of an automatic award.” A $15 million road construction project is coming to the Southland, according to Joyce.
Chicago Metropolitan Agency for Planning provides funds for studies and determines which projects will receive funds. It is especially important to funding transportation planning and improvements. Without recent legislation sponsored by Murphy and passed by the Cook County Board, CMAP would have forfeited $11 million short term. That would have caused CMAP to lose out on receiving approximately $2 billion in stimulus funds.
Daley cautioned that stimulus money was not a long term solution, but more efficient budgets are.
“Even if we get stimulus money, it will run out eventually,” he said. “The keys are how you make it work and how you make it last.” Daley also said, “The Cook County Board president should hold the line on salary increases, and any budget that is presented should have an eight to 10 percent cut.”
Gorman agreed with Daley about stimulus funds. “We can’t depend on this type of money to balance our budget. We need to think outside of the box to get through these difficult times.”
Opinions differed regarding the benefits of raising taxes to balance budgets.
“I don’t think there is a need to raise the sales tax to balance the state budget. We need to get our own fiscal house in order before we talk about any increase in the sales tax,” said Joyce.
Murphy favors a tax increase for Cook County. She said, “No one wants to raise taxes, but sometimes you have to do it. We [Cook County Board] had not raised the sales tax in 16 years.” Murphy added that Cook County is the second largest county in America and has approximately 5.3 million people.
“Breakfast with the Legislators” was presented at Saint Xavier University by the Beverly Area Planning Association and the chambers of commerce of Blue Island, Evergreen Park, and Oak Lawn. The event was sponsored by AT&T. State Sen. Emil Jones III (D-Chicago) was scheduled to appear but did not attend.
For more information on how the state of Illinois is spending the funding from the American Recovery and Reinvestment Act, check out the state’s website.
Joe Gatrell can be reached at email@example.com.