While shifting the state’s normal cost obligations onto school districts may provide some relief to the state’s budget it will not mitigate these financial obligations, and will instead push them onto school districts that, on average, already derive the majority of their revenue from local sources. One of the grave concerns I have about the leading proposals is that so many of our elected officials seem perfectly content to shift all of the costs onto universities and school districts while maintaining legislative control over the design of the benefits package. This is a mistake on so many levels. The separation of responsibility and control is a recipe for fiscal shenanigans.
Moving forward, comprehensive reforms will need to be implemented to create a more fiscally sound system which does not compromise employee retirement security and public employer competitiveness. Illinois’ pension system must do a better job of improving employee’s retirement security. Most public employees in Illinois do not participate in Social Security, leaving their State of Illinois pension as their primary source of retirement savings. But before policy changes can be made finding common ground from all stakeholders is essential and respect for our current retires is mandatory. Funding guarantees for the pension systems must be enacted into law. A statutory funding guarantee would ensure that all future state government contributions are made in full when they are due. Most other states operate with these guarantees and in Illinois the Illinois Municipal Retirement Fund benefits from this type of mandated payments.
There are advantages to having costs directly associated with services but any such shift must be done over time in a fair way to the local districts. New employees should be hired with a defined contribution plan (like a 401k), not defined benefit plan. A defined contribution plan would give employees the right to take their account with them when moving to a new job. Current employees and retirees are a more difficult challenge. We must negotiate a reasonable compromise or the state will not be able to fund it’s ongoing social service and education programs.