What Does Pension Reform Have in Common with the Fair Tax Proposal? Nothing Really.

 UNDERSTANDING THAT A PENSION REFORM AMENDMENT WON’T WORK TO DO ANYTHING.

 

 

In Sunday’s, October 10, issue of the Tribune Editorial pages and conspicuously placed under the section “YOUR VOICE,” Illinois Policy Institute president Matt Paprocki led off with another argument against the Fair Tax Proposal.

 

The Tribune turns to the IPI, which describes it as a non-partisan research organization, although on-line it is characterized as a libertarian group with strong ties to Bruce Rauner, bankrolling the Mark Janus anti-union case for the ex-governor all the way to the Supreme Court. Mr. Janus is now a senior fellow at the IPI.

 

So, here they are again on my Sunday edition batting clean-up in the Trib’s ongoing effort to stop the Fair Tax Amendment.

 

One deflection that both the IPI and the newspaper engage in over and over is this: “We can say ‘no’ to this newest tax scheme and rescue Illinois by implementing practical structural reforms that would actually fix the problems” (Paprocki). “Instead of taxing…,we could implement pension reform through a constitutional amendment…”

 

With the Tribune and IPI it’s pretty much always the same old falsehood: No matter how many attempts are made to correct the systemic fiscal shortages in Illinois, the culprit will always be the “pension problem” and the unacceptable cost of living rates for retired union members. Please note:

 

THE ELIMINATION OF PUBLIC PENSION BENEFITS HAS ALREADY BEEN ACCOMPLISHED BY THE ILLINOIS GENERAL ASSEMBLY THROUGH THE CREATION OF THREE CATEGORIES OF EMPLOYEES AND CURTAILMENT OF THEIR FUTURE EARNED BENEFITS.

 

Unlike the Tribune or the Illinois Policy Institute, on May 8, 2015, the members of both political parties in Springfield understood the unanimous decision of the Illinois Supreme Court very clearly. And well they should have:

 

“The concerns of the delegates who drafted article XIII, section 5, and the citizens who ratified it have proven to be well founded. Even with the protections of that provision, the General Assembly has repeatedly attempted to find ways to circumvent its clear and unambiguous prohibition against the diminishment or impairment of the benefits of membership in public retirement systems. Public Act 98-599 is merely the latest assault in this ongoing political battle against public pension rights (¶84, p25, Pension Reform Litigation, 2015 IL 118585).

 

The cost of living benefits provided to all Tier One public pension retirement systems in Illinois are thus safeguarded.  On the other hand, heavy-handed, changes will affect the earnings of hires after January of 2011.   Those hires are categorized as Tier Two.   

 

Tier Two annual annuity increases are NOT compounded.  They are simple increases of a maximum of 3% or ½ of the Consumer Price Index, whichever is less. Tier Two members are eligible for the annuity increase at age 67.

 

Tier Three (to be implemented) annuitants will be given an option to join Tier Two, and the annual increases are the same regardless.

 

Note: Inside each of these plans, revised descriptions of benefits become complicated, conditional, and decidedly less in every aspect. For all of us, retired or readers of the Chicago Tribune, let it be understood that for 9 years now, public sector union workers have been brought in under Tier Two.  

 

THE COST OF LIVING ISSUE IS DEAD TWICE.  ONCE IN THE ILLINOIS SUPREME COURT AND AGAIN IN THE GENERAL ASSEMBLY.

 

Paprocki’s and the Tribune’s longing to flog the public retirees in Illinois with a pension amendment proposal is just for entertainment, a libertarian blood sport.  It’s already been done.