A press release from State Senator Pam Althoff:
Althoff: Shifting pension risk onto local schools wrong approach
SPRINGFIELD, IL. – State Sen. Pamela Althoff (R-McHenry) says a pension proposal being advanced in Springfield that shifts costs onto suburban and Downstate school districts could result in higher property taxes without initiating true reforms.
Althoff says she will oppose the measure, Senate Bill 1673, should it come to the Senate for a vote in its current form. Under the legislation, Illinois state government would shift future pension liability risk onto local governments including school districts, universities and community colleges.
Such a move could put those entities at risk of market fluctuations and actuarial assumptions leading to declining investment returns, forcing them to impose higher property taxes to compensate for the shortfall.
“I am absolutely against any pension reform plan that shifts this financial risk without addressing the core root of the problem, which is the skyrocketing costs associated with the current system,” Althoff said.
“Even worse, if this plan took effect, suburban and Downstate school districts could be in enormous financial jeopardy should investments not come back as expected, which could lead to higher property taxes to pay for the losses.
“This bill is bad for taxpayers, bad for the economy and bad for state employees who deserve a solution that truly protects the long-term solvency of the pension system.”
The McHenry senator warned that constituents she’s talked to are demanding lawmakers enact true and real pension reform that reins in costs today, rather than pushing the problem onto others.
“This is exactly the type of fiscal sleight-of-hand that’s gotten Illinois pension system to the precarious point it’s at today,” Althoff warned.
“Local school districts aren’t the ones who’ve shortchanged the pension system to the point where it needs massive restructuring – that happened on the state level. It’s only right that Springfield step up and come up with a solution that doesn’t unduly punish local school districts and colleges.”