Illinois Policy Institute:
John Tillman, CEO of Illinois Policy Institute said, "It's universally accepted that this bill does not represent a "solution" to Illinois' pension crisis. Many politicians who voted for this bill have said as much, and have defended their vote by saying, "This is not a solution; it is a first step."
"A "first step" necessarily means there is a second step. Now the real reform begins; now we start working toward the next step.
"For examples of what that next step is, look around the country. There is something in common with states enacting pension reform and turning their fiscal houses back in order: Michigan, Alaska, Rhode Island. They're all moving away from pensions and to the defined contribution model.
"If Illinois is going to turn around, it will have to do the same. In February 2013, we proposed a landmark bill that would pay government workers everything they've earned so far in the pension system, and start a 401(k) system for all benefits going forward. It would immediately cut the unfunded liability in half, by $46 billion, and would save the state more than $221 billion over the next 30 years. The benefits would be so generous that it also would not require the state to participate in Social Security.
"The bill that passed today may get the governor's signature, but it does not mean the pension crisis is solved. We will continue working diligently to enact real pension reform to get Illinois back on the path to prosperity.
Illinois Manufacturers' Association:
Greg Baise, president and CEO of the Illinois Manufacturers’ Association, issued the following statement following the passage of comprehensive pension reform in both the Illinois House of Representatives and Illinois Senate:
“Manufacturers and businesses across the state needed a sign from Springfield that they are serious about turning the economic ship around in Illinois. This is a step in the right direction. The IMA applauds House Speaker Mike Madigan, House Minority Leader Jim Durkin, Senate President John Cullerton, Senate Republican Leader Christine Radogno and members of the legislature who supported this measure demonstrating the type of leadership that is long overdue.”
Civic Committee of the Commercial Club:
Faced with the most pressing pension crisis in the nation, Illinois lawmakers returned to Springfield Tuesday to pass landmark legislation: a compromise bill to reform the state’s public employee pension systems.
“This bill isn’t perfect and it wasn’t without compromise, but it was undoubtedly the right thing to do for the state and its citizens,” said Ty Fahner, President of the Civic Committee. “Today, legislators put the people over politics and put the state on a viable path forward.”
SB1 is projected to reduce Illinois’ almost $100 billion unfunded pension liability by more than $21 billion and 30-year state contributions by $160 billion – funds that can be reinvested into state programs and used to pay down the state’s backlog of unpaid bills.
“This bill is for the betterment of Illinois taxpayers, as well as public employees and retirees,” said Ed Liddy, Chairman of the Civic Committee of the Commercial Club of Chicago. “With these reforms, Illinois has taken significant steps to secure the retirements of Illinois’ public employees while freeing funds for education, human services and other critical state programs.”
The legislation’s most notable elements include:
- - reducing annual cost-of-living-adjustments,
- - phasing-in increases in retirement ages,
- - instituting a pensionable salary cap,
- - reducing employees’ contributions by one percentage point, and
- - instituting a new funding schedule for the systems to be fully funded by 2044.
In 1995, Illinois dedicated just four percent of revenue to pension funding. Today, more than 20 percent of state operating funds go towards pension payments. Without reform, these payments would continue to grow and consume a greater and greater share of state revenues.
The Civic Committee released its first Facing Facts report, detailing Illinois’ path towards financial implosion and the urgent need for pension reform, back in 2006. In the seven years since, the state’s financial situation has significantly deteriorated.
“It’s about time,” said Jim Farrell, Chairman of the Civic Committee’s State Finance Task Force. “This is an important step in bringing our state back to an economically viable and competitive Illinois.”
In spite of the passage in 2010 of pension reforms for new employees, Illinois has racked up billions in unpaid bills, lays claim to the lowest credit rating in the country and boasts the nation’s second-highest unemployment rate. This despite a 67 percent income tax hike in 2011, deep cuts to nearly every discretionary program and significant cuts in the size of the state workforce.
“For far too long the pension crisis has tied our hands. While there is still much to be done to address the state’s fiscal woes, this bill will allow us to focus on investing in our communities and opening doors of opportunity for Illinois residents,” said Rick Waddell, chairman of the Commercial Club of Chicago.
SEIU - Illinois/Indiana -
The Illinois Senate’s decision to award hefty tax breaks to ADM is another glaring illustration of a state that has its priorities grossly out of whack.
At a time when Illinois is a chronic deadbeat and critical resources such as education, public safety and healthcare remain woefully under-funded, our elected representatives today voted to sink the state further into red ink by absolving some of its richest corporations from paying their fair share in taxes.
Lawmakers will have a hard time explaining why they just gave a gold-plated gift to cash-rich corporations when small business are hampered by lackluster holiday spending forecasts and average families are wondering how they will afford presents for their loved ones. And now those embattled working families will assume an even greater tax burden to compensate for the share that ADM and others have been exempted from paying.
Even before today, a staggering two-thirds of Illinois corporations paid no income tax. Ironically, giants like ADM and Office Depot actually cited this as a reason they should get a free ride, too. In fact, it’s the foremost reason why we need to put the brakes on more giveaways for those who need them the least.
Today’s vote underscores the urgent need to reform Illinois’ tax policy to restore accountability and fairness for everyone. That process starts by adopting legislation pending in Springfield to permit a fair tax system, where those earning incomes pay higher rates and those with lower incomes pay lower rates.
Lawmakers should stop giving handouts to rich corporations and start alleviating the economic pinch on average Illinois workers. The next vote they take should be in favor of a fair tax system in Illinois.