What’s your share of our local public debt? $126,000
Imagine you’re nearing the end of your life and it’s time to tell you children and grandkids what you’re leaving them. “Kids, here’s the deal,” you say. “I worked hard all my life. I wanted to make you proud. I wanted to leave you a nice nest egg. I tried. But you know, we’re in Chicago and Illinois. We procrastinate here, so I’m going to have to leave you with this overdue bill. It’s $126,000. I’m so sorry.”
Last month, the nonpartisan organization Truth in Accounting issued a report that looked at all the debt run up by Chicago and its various other governments, including schools. It concluded that each Chicago taxpayer is on the hook for more than $75,000. Add to that a state debt of more than $50,000 per taxpayer, and Truth in Accounting figures you owe more than $126,000.
How’s that for a parting gift to the kids and grandkids?
It’s absolutely unacceptable, of course, but what are we doing about it?
Not much. City of Chicago officials recently have considered taking out loans to refinance pension debt, a step some finance experts consider a risky proposition. One state lawmaker floated a similar idea last year in conjunction with public university retirees. The Civic Federation urged lawmakers to put a question on the November ballot, asking voters to approve a change to the state constitution to allow adjustments to the future pension benefits of public workers, but it didn’t happen.
If you listen carefully for extensive public discussion of this gargantuan problem by our leading candidates for governor, many mayoral candidates and other public offices, all you will hear is the wind blowing past your ears.
And that’s the way it will stay until more of us wake up and start demanding that debate.
Earlier this year, suburban Harvey laid off police and firefighters to try to deal with its pension and budget problems. In Peoria, the city manager this summer proposed closing City Hall every other Monday, imposing a 12day pay cut on a few hundred city employees and laying off some public works employees, which could mean it’ll take a lot longer to clear the snow off the streets in Peoria this winter.
Is that the path we want to continue to take?
Meanwhile, in Minnesota, the governor, lawmakers from both parties, public retirees and union officials got together and worked for years to develop a plan to tackle its pension debt problems. They hammered out a compromise signed into law this year. Imagine that.
Retired teachers and local government workers took a cut in benefits. Current public workers and taxpayers will contribute more. The pension agreement erased $3.4 billion of Minnesota’s $16.2 billion in unfunded pension debt.
Julie Bleyhl, legislative director for AFSMCE Council 5, told the Minneapolis Star Tribune that workers agreed to a benefit cut so that the state’s budget and pension plans will remain stable. “They’ve worked long and hard for that pension and they want to make sure they have a dignified and secure retirement,” she told the paper. “This guarantees that retirement check will be there for their lifetime and the lifetime of many of their coworkers to come.”
Credit rating agencies say that even with years of work and the compromise now law, Minnesotans still may need to make future adjustments. State budget officials say they understand that.
In Illinois, we still owe $7.8 billion to people who have done work for the state and we have more than $221 billion in pension debt liabilities.
And, contrary to what our Democratic and Republican lawmakers have been claiming in mailers, Illinois budget officials finally are admitting that the spending plan both parties approved overwhelmingly in May is out of whack by $1.2 billion because it relies on savings that have not and may not materialize, such as selling the Thompson Center.
Wishing for a miracle solution won’t make it so. Retirees, unions, Republicans and Democrats have to come together and work something out. We should be hearing detailed ideas for solutions from our candidates for governor.
And whoever wins in November should make leading us to a difficult compromise his top priority.
Our children and grandchildren ought to be able to bank on that.