I’ve been biding my time on the incipient public pension deal working its way through the Illinois legislature until something has actually been enacted into law. It’s far from a done deal at this point and I don’t think it’s too much to say that, if the present deal can’t pass, no agreement that actually confronts Illinois’s public pension problem has a chance of being passed and Illinois’s only recourse would, ultimately, be bankruptcy.
The broad outlines of the deal are a reduction in public retiree cost of living adjustments, a higher retirement age for younger workers, and delays for younger workers in when they can expect to receive cost of living adjustments. During periods of very low inflation (like the present) that’s probably just fine but what if the circumstances change to double digit annual inflation as we had in the late 1970s?
One of the great ironies of this entire issue is that I would bet a shiny new dime that 90% of those who are complaining about the terrible injustice of this pension deal voted for Blagojevich, a primary architect of our problems. When you go fishing and you don’t catch fish, you’re entitled to complain. However, when you go fishing and you do catch fish, it’s too late to complain that what you really wanted was filet mignon.
One of my misgivings is that in Illinois different public employees are paid from different funds and not all of the funds are in equally bad shape. Unless this deal preserves those distinctions it might well be that Illinois teachers will in effect be paying for the retirements of state government employees which doesn’t quite strike me as just. Additionally, there’s the problem that Chicagoans pay for the retirements of retired Chicago Public School teachers and retired teachers who didn’t teach in the city while Illinoisans who don’t live in Chicago just pay for the retirements of teachers who didn’t teach in Chicago which is obviously unjust. I’m afraid that’s one of those injustices that is hallowed in tradition.