The Role of Teacher Union Lobbyists in the Pension Debacle

The Southtown has a Phil Kadner column about the negative effects (more later than soon) of shifting the burden of paying teacher pensions from State government to local school districts.

He missed one aspect that some may find significant.  I explain that puzzle piece in the following comment I left under his piece:

Phil Kadner writes, “You paid tax money to fund the pensions. But your elected leaders chose to spend the money on something else.”

The Illinois State Capitol

The Illinois State Capitol where Democrats plan to shift teacher pension costs to local school districts, which will raise property taxes.

But he leaves out who encouraged the legislators to spend the money elsewhere.It was the teacher union lobbyists.

When I was looking at budgets, there was a section for education.

It was divided into three parts:

  1. k through 12
  2. universities
  3. pensions

The pressure was always to increase State Aid to Education.

The reasoning (not stated publicly, I dare say) was that with higher financial assistance, teacher salaries could be raised, which, in turn, would increase teach pensions.

Kadner’s comments about Mike Madigan’s proposed pension shift deserve wider dissemination.

He points out,

“Chicago finances its teachers’ pension system, the argument goes, and Chicago taxpayers also contribute to the system for teachers outside the city.

“What Madigan and the other Chicago politicians don’t say is that Illinois’ education funding system always has been rigged to shift more money to the city.”

He continues his chain of logic:

“The goal is to spread the cost shift over so many years, 10 to 15, that school districts won’t initially object and taxpayers won’t care.

“The cost initially will be a small fraction of your local school district’s budget. But over time those costs will compound and eventually amount to billions of dollars.

“It’s very similar to the scheme the Legislature used to drive the pensions systems to near collapse.

“By the time the financial crisis hits the school districts, the lawmakers today no longer will be in office. No one will remember who is to blame.”


The Role of Teacher Union Lobbyists in the Pension Debacle — 6 Comments

  1. The only way to get out of this pension mess is to eliminate public guarantees for overly generous teachers’ pensions.

    It’s funny.

    Every candidate I’ve seen that runs for any board of education has run on a platform of reform.

    And every time a new board member gets elected, they end up acquiescing to the status quo mess.

    Reform will not come from the ballot box.

    I have been a vocal advocate for the D300 online charter school, not because I think it’s a great program or that it will effectively serve the students of D300, but because it’s a first step toward disassociating the tax payers of a district with pension liability.

    When that concept is proven to work, more will come.

    Privatization is the only way to slay the teachers’ union beast.

  2. Well you won’t hear that story from the following massive consortium whos members stand to benefit from the Illinois state pensions.

    Commission on Government Forecasting and Accountability (COGFA), We Are One public sector union consortium, public sector unions (IEA, IFT, AFSCME, etc.), Madigan, Cullerton, Quinn, Illinois Senator John Cullerton’s Chief Legal Counsel Eric Madair, public sector pension funds (TRS, SERS, SURS, GARS, JRS), public sector employees (teachers, administrators, state workers, university professors, state lawmakers, judges), Illinois State Board of Investments (ISBI), Buck Consultants, Illinois Retirement Security Initiative (IRSI), Center for Tax and Budget Accountability (CTBA), State Universities Annuitants Association (SUAA), Institute of Government and Public Affairs (IGPA), IL Association of Regional Superintendents (IARS), IL Association of School Board Administrators (IASA), IL Association of School Business Officials (IASBO), IL Principals Association (IPA), Council of Chief State School Officers (CCSSO), American Association of School Administrators (AASA), and the list goes on and on and on.

    The Untold Pension Story

    1. During annual budgeting divert funding from Pensions, to General State Aid (divert some funding from the pension bucket to the bucket that funds this years salaries for teachers).

    2. Simultaneously during the same year, while shorting the pension fund, pass benefit increase legislation which increases pension funding requirements.

    3. Blame the State of Illinois for not making it’s contribution.

    3. Repeat for 40 years.

    Does anyone really believe that if these pensions were unaffordable 40 years ago, they are somehow affordable today at increased benefit levels?

    Sure they do.

    The groups listed above.

    And you are their targeted source of revenue.

    They are all contacting state lawmakers.

    While you remain silent.

    Guess whose going to win?

    Might want to learn how to contact your state lawmakers (Senator and Representative) and Governor and advocate on your behalf.

    Because they groups above are not bashful about doing so.

    There is no PAC and lobbyists for Average Joe.

  3. Not all Illinois School Districts. Check out (and share) Cary D-26’s position on public sector pensions (link at the bottom).

    District 26 Position: The Pension Protection Clause of the Illinois Constitution and subsequent legislated pension enhancements have created a situation in which the majority of money in circulation will be required to pay for state employees’ retirement benefits, of which TRS is the vast majority. District 26 believes it is patently unfair for Illinois taxpayers to foot the majority of the cost of a retirement system that for most, is better than their own retirement plan.

    District 26 also believes it is wrong for government and courts to hold the Pension Protection Clause
    much stronger than the promise to fund public services such as education.

    Based on the current situation, any meaningful reform of state pensions will not align with the Pension Protection Clause. The courts have routinely upheld challenges to the Pension Protection Clause. A constitutional amendment or revision of the constitution at a constitutional convention would be required to soften or repeal the Pension Protection Clause.

    District 26 holds that the solution to the pension crisis must include the following, and that no option is considered “off the table”.

    – Teacher retirement benefits should align with retirement benefits of comparable workers in the private sector.

    – While District 26 doesn’t oppose taxpayer contribution to teacher retirement benefits, TRS annuitant benefits should be based primarily on employee contribution, and not be predefined.

    – The solution must be fair to both beneficiaries and taxpayers.

    District 26 will therefore advocate for:

    – Elimination of the current pension system.

    – Distribution (or allocation by accounting) of all existing TRS assets to individual participants, based on individual participant contributions.

    – Replacement retirement plans left to local district control.

    – Control of the TRS and appointment of the TRS Board by local districts, should TRS be left in place and the pension cost burden be shifted to suburban and downstate districts.

    – Creation of a task force of retirement planners with proven track records from private industry to develop retirement plan options that local districts will have the option of implementing.

    – Movement to a plan in which retirement benefits are based on contributions made to the plan.

    District 26 will also adopt the following budget assumptions:

    – Until significant pension reform occurs, District 26 will base its budgets and financial plans on the district contribution to TRS increasing by 1% per year.

    – District 26 will consider implementing and budgeting for a staffing strategy which attempts to mitigate the negative financial impact of any pension cost shift.

  4. @Chris: It’s a nice statement, but it was made 6 months ago.

    Remind me of it again when it comes to negotiate the teachers’ next contract.

    I wish the D26 BOE best of luck in standing up for taxpayers, but history tells us that they will fold like a lawn chair.

  5. There’s a refreshing take on state pensions.

    Was the Cary District 26 Position Paper strictly a Board vote?

    Did the Superintendent, Administration, or Teachers Union have a position on the Position Paper?

    I take it there was a reform majority on the Cary District 26 Board, or at least swing voters who would sometimes vote reform?

    If so did the balance of the Board (between reform and status quo) change after Chris went to the MCC Board?

    The politicians and union lobbyists sure made a mess out of pensions.

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