* Dispatch/Argus editorial…
As expected, the devilish details lurking in the mass of legislation approved by the 101st Illinois General Assembly continue to emerge.
Today’s unwelcome example hikes statewide costs for funding teacher and administrator pensions. It was tucked — as such surprises often are — into the omnibus bill that implements the $40 billion budget for the fiscal year that begins July 1.
The move cuts in half what taxpayers statewide will save from so-called pension thresholds. The goal of such thresholds is to reduce the costs to taxpayers statewide when school boards give big raises to educators at the end of their careers so they will receive bigger lifetime state-funded pensions than they would otherwise have earned. The higher threshold wasn’t designed to stop districts from giving generous raises, but to ensure taxpayers across the state do not have to bear the burden for local leaders’ generosity.
Before the original 6 percent cost-shift thresholds were added in 2005, the burden for all pension spiking costs fell to every taxpayer, not just the taxpayers of the local school districts responsible for the spikes. So there was zero accountability and little incentive for local school boards to decline to handsomely reward longtime educators using other people’s money. A year ago, lawmaker faced with a massive and growing public pension crisis agreed to modestly reduce the teacher pension threshold to 3 percent. It was a move we and others hungry for reform applauded.
* But this is from that Center of Squares site…
The initial measure passed in the budget implementation bill for fiscal year 2019 meant the school district or public university had to pay for the entire pension cost of pay raises above 3 percent directly to the pension fund.
State Sen. Dale Fowler, R-Harrisburg, didn’t like that.
“It applied to the teacher that worked overload classes, or became a coach, or became a principle,” Fowler said. “It applied to a teacher that became a mentor, to a teacher that was a band director, or even a teacher that worked on the duty of writing a curriculum for the school.”
“Teachers told me what it was doing to them in the classroom,” Fowler said. “They asked me to fight for the repeal of the 3 percent [cap] and I told them that I would.”
Last year’s cap probably could’ve been drafted better. If a teacher took on additional responsibility or was promoted, that teacher probably should not have been subjected to the cap.
* Illinois Policy Institute…
Local taxpayers also suffer. True, local property taxpayers aren’t directly on the hook for TRS benefits. But they do pay the price in a painful but overlooked way: As pensions consume state education funds, school districts must resort to hiking already-high property taxes to find needed revenue. School districts currently consume nearly two-thirds of total property tax dollars collected in Illinois.
They just made a pretty sound argument for higher state taxation, or massive state cuts.