VIDEO: Panel discusses teacher pension cost shift and other issues

9 months, 3 weeks ago

The only agreement is that doing nothing isn't an option

Representatives of the Illinois Policy Institute, the Illinois Federation of Teachers and the Quincy School Board made up a panel that discussed who should pay the employers' share of teacher pension costs: local school districts or the state.

About 150 people attended the forum at John Wood Community College's Mary Ellen Orr Auditorium. Many retired teachers were in attendance.

The Illinois Policy Institute hosted the event on the heels of a poll they commissioned that showed nearly half of likely Illinois voters oppose asking school districts to pay the employer share of teachers' pension costs, while the other half of likely voters are split between indecision and favoring the proposal.

The debate was one of several being held across the state. Monday's event was moderated by Bryan Nichols, co-host of The Morning Meeting on WTAD-AM radio and state Rep. Jil Tracy. Debate participates include Collin Hitt of the Illinois Policy Institute; Nick Yelverton of the Illinois Federation of Teachers; and Quincy School Board member Scott Stone.

"The worst thing that could happen right now is to keep the status quo in place…is to change nothing because we're barreling towards disaster in Illinois,” Hitt said. “We can lift mandates and red tape. The state makes construction more expensive by state law. State makes transportation more expensive.”

While the panelists mostly pointed their fingers toward the Legislature about the pension problem, Tracy said that doesn’t help solve anything.

“Whoever we want to affix the blame to, we still have a problem,” she said. “I applaud the Illinois Policy Institute for wanting to come up with some out of the box solutions. I’m open to listening to everything and anything.”

Yelverton said the Legislature is clearly leaning toward shifting the pension burden back to the School Districts who will then in turn shift it to property taxpayers.

“There will be cuts in the classroom because property taxes are already capped,” he said. “There are real implications where there are tax caps. The cost shift needs to be done over a long period of time. Shifting $800 million to local school districts doesn’t solve the problem.”

“We’re just not going to impose this on the taxpayers…the state has created this problem,” Stone said. “If they put it within our operating funds, that means cutting costs and cutting teachers. District needs to make sure it manages the salaries of the retirees and stop passing that back onto the state. In the last three-to-four years they receive large salary increases to get a larger pensions. If the school is going to pay for that, they’ll look more careful about giving that out."

While Hitt said the state has record revenues, Yelverton said that money has not helped fill the pension hole.

“The tax increase was supposed to take care of education…it didn’t,” Yelverton said. “There are no concrete proposals on the board. The state is not meeting its obligation and we do not properly fund the schools. The devil’s in the details. You have to look at different districts differently. It can’t be a generic cost shift. It diverts focus away from real problem of pension debt. There is no way we can shift that to make it affordable for the state to make that payment.”

Hitt said TRS's cost of living adjustments and health care for retirees has to be on the table.

“All taxpayers in Illinois are worried about retirement,” Hitt said. “Pension funds are shielded from losses and we are also deficit funding those pensions. Taxpayers are on the hook for that.  We are having this discussion because the state is broke. If nothing is done, you’re not going to like the outcome. It’s going to be impossible to avoid bankruptcy without a tax increase. Going forward, we’re going to have to structure it differently There are compounded COLA’s (cost of living adjustments) in TRS as people get 3 percent and the average teacher pension is $60,000 annually. Money was never set aside for that."

“Teachers understand there are going to be changes, but the Constitution says benefits shall not be diminished,” Yelverton said. “We have to come up with a real funding plan to address the debt. There is no other conversation that matters. Promises were made legally and morally to retired teachers. They do not receive social security.”

Stone said he's tired of cutting as a member of the Quincy School Board and he sees a pension shift as leading to more cuts.

“I’m not expert on state finances, but I’m going to agree on the reforms that need to be looked at,” Stone said. “When we have no source of increased revenue, we have to cut. They are hard choices. There are tough choices in Springfield, but they have to be made. They have to decrease their spending to pay for their commitments and pension is a commitment. We’ve got enough problems, but just deferring problem down the road to a future board. We’ve got to be part of the discussion.”