Editorial: A Most Difficult Vote

THE OPINION PAGE

By Sen. Don Harmon

This week, I cast the most significant vote of my career. There’s no question it was also the most difficult.

In voting for the compromise legislation to address the state’s underfunding of public employee pension systems, my colleagues and I took a giant step toward putting Illinois on firmer fiscal footing. Approval of the pension reform legislation also allows us to move forward and address many other critical issues before us.

I appreciate the advice and feedback that I have received from many of you, whether or not you agree with what I believe was the best vote for Illinois.

I’ve been assuring friends, neighbors and constituents for many months now that the General Assembly would soon tackle pension reform in a meaningful way. Finally, we’ve done it. I’ve also warned all who would listen that whatever pension reform bill we passed would not totally satisfy anyone, and that it would anger stakeholders on both sides. On that point I trust we have not disappointed.

But the fact is that reform is critical to stabilizing our state’s fiscal condition and freeing up resources for core functions such as education, human services and public safety. Reform also will fulfill our promise to public workers that pensions will be there for them in retirement.

While I preferred the original Senate model supported by many public workers directly affected, the new compromise bill is clearly superior to our Senate proposal in one key measure. It is valued at about $160 billion—more than twice the value of the Senate proposal.

Moreover, the new proposal has elements of fairness I admire.

First, we listened to retirees and teachers who implored us to contribute more state dollars to the pension systems instead of just cutting benefits. Unlike the severe House model, the new proposal achieves almost half of the $160 billion through additional state contributions.

Second, we recognize that those already retired or preparing to retire soon have less flexibility to adapt to changing rules, and so more falls on younger workers who have time to plan. No employees over 45 will see changes in retirement ages. No current retirees will see a suspension in their cost of living adjustment (COLA).

Most of the savings on the benefit side come from a fundamental change in the COLA calculation. Today, employees receive an automatic compounded 3 percent increase in their pensions each year, regardless of inflation. Those retired for the last decade have done well, with COLAs far outpacing inflation. That’s just not a sustainable system.

The new COLA calculation attempts to be fair to public workers. It acknowledges that teachers and most public employees are not entitled to Social Security, and gives more to those who must live on their pension alone.

The new COLA is tied to inflation, salary and length of service. In that way, it rewards those who have worked a full career for a modest salary over the political insiders who work a brief time at a high salary. Both may have a $35,000 pension, but the career teacher will enjoy a far more generous COLA.

We’ve also ended several lingering abuses. We are capping the salary used to calculate pensions to discourage “salary spiking” at career end. We’ve ended the practice of using vacation and sick time to calculate pensions.

The legislation is fairer and more constitutionally sound than the House plan rejected in the Senate last spring. While I have lingering doubts about its constitutionality, I am convinced that whatever we do as legislators, the only path to lasting pension reform runs through the Illinois Supreme Court.

This is not the plan I would have advanced were it up to me alone. Whatever our individual misgivings on either side of the issue, however, we must move forward with genuine pension reform. That’s why I supported the reform measure approved this week.

It has been described as unfair by many and deemed inadequate by others. But it will get Illinois back on firmer financial footing while making room for other critical funding priorities and future initiatives.

Of equal importance, and of particular importance to me, it ensures that public workers counting on pensions will be paid one for as long as they live. VFP

Don Harmon is a Democratic member of the Illinois Senate. He’s been representing the 39th District–which includes all or portions of Maywood, Chicago’s Austin neighborhood, Oak Park, Addison, Franklin Park, Melrose Park, River Grove and Rosement, among other communities–since 2003.

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