Out of the woods?
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Roberta Lynch |
Not yet, but we’re getting there
Let’s face it: Budgets are boring. Ok, not to everyone. But to an awful lot of us. Our eyes tend to glaze over when we start reading through pages of numbers with only very occasional narrative tidbits.
But the simple reality is that the State of Illinois budget is essential to the wellbeing of just about every AFSCME member in our state. It funds all the services that AFSCME members in state government provide (and all of their wages and benefits). And it contributes significant operational funding to state universities, local units of government, and nonprofit agencies where many members work.
It was a good deal of budget chicanery over the course of many years—compounded by outright weaponization of the budget during the Rauner years—that left our state mired in debt, with the biggest debt of all being the one owed to future public sector retirees in state pension systems—SERS, SURS and TRS.
Because too few elected officials were willing to speak the truth about the revenues needed to keep state government operational and prepared to meet its obligations to retirees, year after year the so-called “balanced” budget relied on gross underfunding of our pensions. And too often those smoke-and-mirror strategies were complemented by cutbacks in state services— including the closures of nearly a dozen prisons, psychiatric hospitals and developmental centers—and large-scale layoffs of state employees.
AFSCME fought back against every closure and managed to block layoffs or secure strong recall rights that brought most employees back into the state workforce. But fixing the pension problem has been a much tougher challenge.
When anti-pension forces launched a full-fledged attack and succeeded in persuading legislators of both parties that the only solution was to cut public employee pension benefits, AFSCME joined with other unions to fight all the way to the Illinois Supreme Court. And we won that round! In a landmark ruling, the court found that pensions are a constitutionally protected commitment that cannot be diminished.
But the pension problem remained because the underfunding remained, and pension debt grew. We have a right to a pension, but what will happen if there is no money left in the pension funds in 10 or 20 years to cover our benefits?
Our opponents have an answer: Get rid of the constitutional provision that protects our pensions, making it possible for legislators to cut our benefits at will.
Even as I write, they are pressing forward on that front. Sen. Darren Bailey, who is campaigning to be our next governor, has introduced legislation that would put a referendum on the ballot this November to repeal the pension protection clause of the state constitution.
Governor Pritzker is taking a different path. While providing temporary freezes of gas, sales, and property taxes this year, his budget plan not only makes the required pension contributions but also includes an additional payment of $500 million.
This payment will bring greater stability to the pension funds, while at the same time saving taxpayers an estimated $1.8 billion over the next two decades by reducing interest payments on the outstanding debt.
Seems like a win-win, right? Not in the eyes of some legislators in both parties. Republicans are arguing that rather than seeking to stabilize the pension funds, there should be more tax cuts, while Democrats want more human service spending.
This budget plan does not include any facility closures or layoffs of state employees. And that’s great news! But there is still room for improvement from the General Assembly: There is no increased funding to address understaffing woes in IDHS and IDOC facilities; there is very little additional funding for state universities where employee salaries lag well behind state government wages for comparable work; and there is not sufficient funding to raise the very low wages of direct care workers in state agencies.
We’re going to be working to convince legislators to address these deficiencies.
What we’re not going to be doing, however, is supporting elimination of the “extra” payment that can help bring a measure of stability to our state’s troubled pension systems.
Over the last few years, the Pritzker Administration has steadily whittled down the mountain of debt that Bruce Rauner left behind. Now state employees no longer need to cope with disgruntled doctors who threaten to discontinue care because the state health plan had a years’ long bill backlog. Nor is the state any longer paying the exorbitant interest on debt that the law requires in matters of delinquency.
And, perhaps most important, now there is at least a shot that the credit agencies will upgrade Illinois’ credit rating, lowering the interest rates that the state will have to pay on borrowing.
Would we have been better off if the referendum to revamp Illinois’ unfair tax structure had passed in 2020? No doubt about it. There would be more revenues available to our state now. But anti-pension forces like the Illinois Policy Institute went all out to defeat the referendum to abet their quest to cut our benefits by keeping state revenues down.
For now, the governor has outwitted them—producing a responsible budget plan that bodes well for our state’s stability and growth. Without additional revenues it would be hard to do much more. That’s why AFSCME remains committed to renewing our quest for a more equitable and adequate state revenue plan.
Boring? Maybe. But the best way forward to address many of the myriad problems that so many AFSCME members confront every day.
