School officials decry Quinn's pension-shifting plan | WBEZ
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School officials decry Quinn's pension-shifting plan

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(Flickr/Mark Sardella)
Approximately $44 billion of Illinois’s underfunded budget is attributed to pensions owed to the Teacher’s Retirement System, according to the Chicago Tribune. Retired teachers earn 75 percent of their annual salary in pensions, with a 3 percent increase in benefits every year.  
That’s a pretty nice deal, if you're a retired teacher. As the state becomes increasingly unable to support that rate, however, there has been heightened disagreement over who should pay for it in the future.

Gov. Quinn -- and the majority of his pension reform panel -- believes that it should be the school districts. The districts, they argue, negotiate salaries and contracts, and should therefore have the responsibility of paying for them. The system already works this way in Chicago, and Quinn says the transition to this system throughout the rest of the state would be gradual.

School officials see things differently. They argue that shifting the burden doesn’t solve the pension problem from a systemic standpoint at all, and call Quinn’s plan an “unfunded mandate.” Since decisions about pension law are made at the state level, they argue, TRS pensions should be funded by the state. Estimates for what the cost to individual districts could be range from $750,000 to $18 million a year depending on size. School districts across the board, already running on lean budgets, say that property tax hikes and teacher layoffs would basically be guaranteed if pensions were their responsibility.

Other measures, like raising the retirement age to 67, would make the transition easier on the schools. State Sen. Mike Noland, who sits on the governor’s pension reform panel, said a 3 percent increase in input by teachers was also being considered. He believes that a serious analysis by the state of what the cost of the transition would be is the next step towards essential tax reform in Illinois.

Meanwhile, on Thursday evening in Naperville, TRS Executive Director Dick Ingram gave a presentation on the potential shift, and said that while raising the retirement age and increasing input are solid ideas, the governor has backed off the idea of having schools cover pension costs somewhat. “There's a lot of conversations that still need to take place,” said Ingram, according to the Daily Herald, “This is nowhere close to being a done deal right now. We're going to be sorting it out over the next six weeks, or perhaps longer.”

Monday on Eight Forty-Eight WBEZ's Michael Puente will give us the latest on how this issue is developing. For many school officials, it’s the uncertainty that is a problem, especially as they have to think about passing their own budgets in the future. Puente will sit down with School District 158 Superintendent John Burkey, whose board of education recently passed a resolution opposing the potential transfer.

“We’ve taken a lot of hits,” says Burkey of his district, where faculty has been on a 2-year pay freeze, and in which the average salary in considerably lower than elsewhere in the state. “There is nothing left to cut other than programs and teachers.” Even if given the power to levy a property tax hike to cover the pensions costs--which are estimated to be around $2.75 million per year in District 158-- Burkey says the taxpayers wouldn’t stand for it.

State Sen. Heather Steans will also drop by Eight Forty-Eight to talk about the governor’s plans for pension reform. Steans, who has sponsored some minor pension reform bills in the Senate, will share her perspective from inside the negotiations.

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