By State Rep. Jeanne Ives -
“Hi. My name is Mike and I’m a spend-a-holic, with an addiction to power.” To which the other gathered spend-a-holics and / or power-addicts compassionately replied, “Hi, Mike.”
This was the scene that played out in the Illinois State House on Thursday afternoon, as House Speaker Mike Madigan deigned to step onto the House floor and argue for a bill that would reform pensions.
While it was not the bill that my colleague, Rep. Tom Morrison, and I put forth, which would bring the real reform needed in Illinois, it was a first step. And in Illinois, we needed that first step.
The most powerful man in Illinois came forth to admit he was powerless over the economic crisis that his decisions, as well as those of his enablers in the legislature and unions, have caused – and that this crisis has become unmanageable. This admission represents a meaningful turning point in Illinois’ fight for real reform.
As I questioned him about how the pension crisis originated, he acknowledged, on the record, the role of his party and the fact that this bill is just the first step to further reforms.
Admitting there is a problem - which is that the system, put in place by Madigan and his colleagues ten years ago, was wrong for Illinois - in no way makes amends to the many state employees hurt by the failure of that system, it is only a first step. Further, while the bill does make an effort to preserve generous benefits for retirees and those who have paid into the system, it does not go far enough.Others in the group, such as Reps. Cross, Nekritz and Acevedo rose to share their own stories about how the out-of-control spending, lies and broken promises had hurt them and many of the people they serve; and to state how angry they were to find themselves in this situation.
It is not a secret that I do not think that Senate Bill 1 is an adequate solution to our pension crisis. However, pension reform is needed now. The solution proposed by Speaker Madigan is a small step towards reform- not the giant leap needed. There are multiple pressures facing our state that require us to reform these pension systems immediately.
- First, Illinois is headed towards insolvency under the current benefit/contribution structure.
- Second, businesses, credit agencies and taxpayers will not shore up the economy by investing in Illinois if we fail to reform our pensions – more likely, under swelling economic burdens, they will flee the state. Ultimately, the markets will give us feedback as to whether or not Illinois has done enough in the area of pension reform.
- Finally, our budget pressures are severe, and pension payments increasingly crowd out other spending on education, infrastructure, public safety and social services. In fact, it is projected we will spend as much on pensions (including debt service) at the state level than on General State Aid for K-12 education.
I believe that we need to move to a defined contribution system. It is the only moral solution that delivers a secure retirement for government employees and liberates taxpayers from funding a failed system. I maintain that defined benefit plans are a thing of the past — except in government. Today, nearly 85 percent of all private sector workers participate in defined contribution plans such as 401(k)’s, because defined benefit plans have proven too expensive and unpredictable for employers to maintain.
Furthermore, I stand firm in my conviction that only real solution is to take control over state retirement plans away from politicians, and put them in the hands of retirees. A defined contribution plan does this. For these reasons, define contribution pension reform is the strategy I will continue to champion in the State Legislature.
In looking at the situation from every angle, I voted for SB 1 because it was a first step that was both significant and necessary in moving toward the real reform Illinois so desperately needs. Mr. Madigan has demonstrated that he is prepared to accept the things he cannot change and change the things he can. Acknowledging there is a problem is the first step. Now, we need to begin working the next steps in this program toward real, redemptive reform.