CRYSTAL LAKE – A panel discussion on who should be responsible for paying for teacher pensions Tuesday night underscored the difficulty of fixing the state’s growing pension problem.
The conservative-leaning Illinois Policy Institute brought together a panel of speakers at McHenry County College to talk about legislation that would shift retirement costs from the state to local school districts that set teacher salaries.
The event was part of the institute’s statewide “Local Pension Accountability Tour,” which aims to help voters better understand issues, and touted the institute’s position on pension reform.
Debate over who should pay the employers’ share of teacher pension costs comes as lawmakers return to Springfield on Friday to take up the issue. Gov. Pat Quinn called for a special session to deal with pensions and said reform can be accomplished in one day based on existing legislation. Lawmakers failed to pass reforms in June.
Tuesday’s discussion was, at times, heated.
“Pensions are a very personal issue,” Illinois Policy Institute host John Knowles said before the talk. “Strong feelings run on every side and all points in between.”
The institute wants local school districts to take over the employers’ share of teacher retirement costs and has called for broad reforms of the pension system.
The think-tank argues that school districts would be more prudent if they were responsible for paying for the retirement perks they give to teachers. It also has said local districts would be better stewards of the retirement system because they are more likely to fund the system than legislators, who have repeatedly put off the state’s obligations.
“Illinois politicians have demonstrated that they are the last group of people who should be in the retirement business. The state’s finances are in shambles,” said the institute’s Diana Sroka Rickert, a former Northwest Herald reporter. “Until we get Springfield out of the pension business, Illinois teachers will not have a secure retirement.”
Fellow panel member Jeff Mason, president of the Crystal Lake District 47 school board, said the proposed pension shift would force suburban school districts to either raise property taxes or make drastic cuts. He also said that simply shifting the burden won’t solve the problem.
“I view it as squeezing two ends of a balloon, one at a time,” he said. “The costs are there and they will have to be borne by us, as taxpayers, one way or another.”
Mike Sayre, a math and social studies teacher at Haber Oaks in Cary and member of the Illinois Education Association, said the shift would hit schools in poor communities the hardest.
“It would widen the gap between those districts that have and those districts that have not,” he said. “Those with a strong property base might actually be able to absorb that extra costs of the pension shift, but districts that are already struggling, including some right here in McHenry County, will unfairly bear that burden.”
If retirement costs are shifted to local districts, it’s not clear how school boards would pay them.
The state’s tax cap law, which limits annual property tax increases to 5 percent or the rate of inflation, whichever is less, would likely force some districts to seek tax hikes through voter referendums.
Sroka Rickert suggested districts tighten spending and asked teachers to contribute more toward their retirement.
“It’s a myth that property taxes need to go up to pay for this cost shift,” she said.
The audience wasn’t convinced.
School districts would like to take a variety of approaches to pay for the additional liabilities, Mason said.
“There are differences in the financial conditions of school districts here in McHenry County and that would make a difference in [how much of the cost] school districts would have to carry and how much they would have to shift to the employees,” he said.
Later, he said he thought voters would be unlikely to approve property tax referendums, which could force some districts to slash classroom spending.
Sayre largely agreed with Mason on that point.
“Referendums don’t always work. It’s very hard to get people to vote in favor of raising their own taxes,” he said. “School boards would likely have to cut programs for kids, increasing class sizes and reducing the number of programs.”
• The Associated Press contributed to this report.