Illinois’s pension program is in dire straits. Kansas should watch, listen and learn. KANSAS is in much the same situation as Illinois. Today, Kansas is $9.8 billion — also with a “b” — short of what it needs to pay in benefits to current and retired state employees. But rather than bite the bullet, legislators approved taking out a $1 billion loan through the issuance of bonds to shore up the program. The immediate boon to KPERS is expected to be $64 million for 2016 and 2017, though of course long-term, we’ll be saddled with paying back the loan, plus hundreds of thousands in interest, and delaying the solvency of KPERS.
In a unanimous decision, Illinois Supreme Court justices ruled Friday that efforts to reconfigure the state’s pension program violate the state constitution.
Yes, the state may be unable to afford what it has guaranteed state employees, but that is the fault of legislators, the justices ruled. So fix it.
That is not what Gov. Bruce Rauner wanted to hear. In fact, he’s so angry he’s now suggesting the Illinois Constitution be rewritten and is asking for a referendum to do so.
Gov. Rauner, the first Republican governor elected in Illinois in more than 10 years, inherited the mess from a Democratic-controlled legislature that allowed an untenable pension program to go deeper and deeper in debt. For too long legislators have been unwilling to pay the piper and now the program is underfinanced by almost $100 billion. That’s with a “b.” Another casualty of the mismanagement is the state’s credit is hanging by a thread.
Instead of finding ways to legitimately fund the program, such as raising taxes, legislators prefer changing the benefits due police, firefighters, teachers, and other public service workers.
No can do, the justices ruled. You can change what future employees may receive, but not what you have promised former and current employees.
“Crisis is not an excuse to abandon the rule of law. It is a summons to defend it,” wrote Justice Lloyd Karmeier in the 38-page decision.
Not too long ago, Kansas was on track to fully fund its pension program by 2033. Today, that date is pushed back to 2043 — and that’s if everything goes according “to plan,” meaning investments made on the $1 billion will exceed loan repayments.
Those in the banking industry say that’s a big “if.” Taking out a loan to pay debts is not a model of fiscal responsibility.
By evidence of Illinois, we know there’s no “out” to funding the state’s commitment to its employees. Nor should there be. So why is it we keep looking for every way but the right way?
— Susan Lynn
Illinois attempt to reform pension plan a lesson for Kansas
