David Giuliani: An ironic boredom
The issue of pensions are sure to bore preteens. But they’ll be interested later, when the tax bills come due.
The other day, I asked a question about the public pension crisis to Gov. J.B. Pritzker during his visit to Kankakee’s King Middle School.
The students in attendance at the event were uninterested. One yawned. Another looked down at his shoes.
When the governor was speaking, I didn’t notice the students’ reaction. But thanks to Daily Journal shutterbug Tiffany Blanchette, that moment is recorded for history.
Her photo made a point. While pensions seem like a remote subject to preteens, they have a lot of skin in the game. They’ll be paying those bills down the road.
To be fair, their boredom, while ironic, is understandable. I would have been the same way.
For the last few years, the state increased its payments into the public pension systems, reversing a decades-long trend of underfunding. Despite the higher payments of recent years, we’re already suffering the costs of shortsighted decision-making — in the form of higher taxes and reduced services.
Pritzker apparently wants to go back to the old ways. He is proposing to reduce payments into the pension systems by $800 million this year. With this cut, he wants to extend the state’s pension payment schedule by seven years, from 2045 to 2052, according to media reports.
This could very well hit the pocketbook of the students in the photo, who will be in their mid-30s by 2045. Pritzker’s proposal means they will be saddled with more taxes because of delayed pension payments.
In his answer to my question, Pritzker said his goal was to increase the assets of the pension systems. He would transfer the proceeds of the expected sale of the Thompson Center in Chicago, netting the pension systems $300 million. That’s good, but very little in the bigger scheme of things.
This year, Pritzker said, the state will spend $8.1 billion on public pensions, amounting to 20 percent of the whole state budget. Just think about that: If you pay the state $1,000 in taxes each year, $200 of that goes for the pensions of retired government employees.
That crowds out money for government functions most people support — schools, public safety, roads, health care.
Solutions to the pension crisis are hard to come by. That’s because the state constitution bans any adjustments to a public employee’s retirement package during his or her entire career.
Changing that clause is politically untouchable now. But by the time these King students are well into their working years — after the baby boomers and others have collected their pensions — the younger generations might take a dimmer view of such guarantees.
Sure they’re bored now. But there’s nothing like sky-high tax bills to spark a person’s interest.
SHAME ON US?
The Daily Journal and I received a lot of “shame-on-yous” on social media after we ran a story recently on the pension situation of Frank Kosman, Kankakee’s likely new police chief.
We pointed out that he is getting a $111,000-per-year pension from suburban Bensenville, where he retired as police chief last year. That will be in addition to his $130,000 salary in Kankakee, for a total of $241,000 per year. He won’t be paying into the pension system in Kankakee, he said.
Although this is entirely legal, some dislike such a practice. They say people should not start collecting a government pension until they retire entirely from public employment. But others think we should avoid reporting on such pension arrangements, saying that doing so disrespects public servants.
We’re not treating Kosman any differently from other high-profile officials when it comes to pension reporting. We revealed a few months ago how Sheriff Downey retired in 2016 from the sheriff’s office and was appointed sheriff a day later. With his income and pension combined, he’s making in the neighborhood of $200,000.
The truth of the matter is that pensions cost taxpayers money. We might as well know how they work, rather than stay in the dark.