Illinois state lawmakers repealed a measure that was intended to curb pension spiking for public educators as the state's unfunded pension liabilities continue to grow.
The bill enacting the next budget for the state of Illinois that is on the way to Gov. J.B. Pritzker’s desk would allow local schools and public universities to give teachers end-of-career pay bumps of up to 6 percent without having to pay for the increased pension costs of those raises.
As part of the budget implementation bill for the coming fiscal year lawmakers passed in overtime session by the Senate Sunday, language was included to repeal last year’s 3 percent cap on pension spiking.
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.”
The Illinois Education Association praised the move.
“This shows that our members’ voices were heard loud and clear in Springfield. Educators from around the state stepped up to save our profession and protect our students,” IEA President Kathi Griffin said in a statement. “It’s amazing to see how powerful we can be when we are united. We have a strong collective voice and we will continue to use it to advocate for our students and public education.”
State Sen. Jim Oberweis, R-Sugar Grove, said repealing the 3 percent cap will add to the state’s pension problems.
“We have the most underfunded pension system in the country,” Oberweis said. “Why are we going to allow this type of nonsense to go on to increase that liability?”
Last year’s 3-percent cap was estimated to have saved taxpayers $21 million in added pension costs for the year. Illinois’ unfunded pension liability was recently estimated at more than $136 billion. The Teachers' Retirement System of the State of Illinois unfunded pension liability was $77.9 billion, or only 40 percent funded. The State Universities Retirement System had an unfunded liability of $27.5 billion, or 41 percent funded.
“There’s a simple answer,” Oberweis said. “Let the school district pay whatever they want, but cap the increase in terms of calculating the pension at the 3 percent that it is now instead of raising it.”
Despite Oberweis’ plea, the Senate passed the budget implementation bill with the repeal of the 3 percent cap, returning the cap to 6 percent. That next heads to the governor.