9 thoughts on “Forbes post, “The Bottom Line: Illinois’ Public Pension Debt Is A Moral Issue”

  1. Indeed, “Illinois public pension debt is a moral issue”; however, this is the significant moral issue that pundits ignore:

    To possess a right to a promised deferred compensation, such as a pension, is to assert a legitimate claim with all Illinois legislators to protect that right. There are no rights without obligations. They are mutually dependent. Fulfilling a contract is a legal and moral obligation justified by trust among elected officials and their constituents.

    According to philosopher David Hume, the idea of keeping a promise depends upon creating rules of justice; that rules of contracts, for instance, have to be considered morally desirable as well. In other words, a “contract” or promise between the State of Illinois and its public employees must be viewed as a moral commitment and requirement of justice. Justice demands we keep our “covenants” with one another. In regard to public pensions, keeping an agreement means a concern to promote the well-being of public employees and the need to secure their rights.

    All citizens have rights that must be protected. When legislators swear an oath to uphold the state and federal constitutions (Article XIII, Section 3 of the Constitution of the State of Illinois), then citizens of Illinois and the United States have also acquired the right to expect that they will uphold that pledge. This is also a matter of important moral concern for all citizens of a state, for all legal claims will be validated by a moral framework since the concept of justice is grounded in ethics. If citizens’ legal rights are abused, then their dignity and humanity will also be violated. As stated by Alicia H. Munnell, Director of the Center for Retirement Research at Boston College, Illinois is one of seven states where accruals are protected, and the legal basis for protection of public pension rights is under state law (State and Local Pensions).

    Without a doubt, the significant issue of past pension reform is its attack on public employees’ rights to constitutionally-guaranteed, earned compensation and the legislators’ obligation to safeguard those promises. An unconscionable constitutional challenge of those rights and earned benefits generates a serious threat to their secure sense of worth as citizens and creates the unfair possibility for an economic disadvantage for a particular group of people and their families. This can never be legally or morally justified.

    What has been at stake continuously is not a potential adjudication of claims that public employees will have against policymakers who want changes to public employees’ benefits and rights, but to respect the public employees’ contractual and constitutional promises because they are legitimate rights and moral concerns not only for public employees, but for every citizen in Illinois: for any unwarranted act of stealing a person’s guaranteed rights and compensation will violate interests in morality and ethics and the basic principles of both the State and United States Constitutions that protect every one of us.

    For these reasons, it is imperative that policymakers and stakeholders examine their own ethical and moral principles and their conduct in view of the fact that they will have to justify their decisions to the citizens of Illinois. Certainly, moral responsibility and legal obligation to fund the public pension systems should not be ignored.

    It is a moral concern and legal duty to reform the state’s sources of revenue and to address the incurred pension debt through restructuring so the state can provide services for its citizens and fund the public pension systems instead of incriminating public employees, and thereby forcing them to defend the State and United States Constitutions. It is the State of Illinois that has the “primary responsibility for financing the system of public education” (Article X, Section 1 of the Illinois Constitution), and the public employees’ pensions are an integral part of “the system of public education” in Illinois.

    1. Except when the money literally isn’t there. This state is shedding 100,000+ of it’s residents every year. Raising taxes will exacerbate the situation. If I were you, I’d take something now rather than nothing later…

    2. Mr Brown again waxes morality in support of immoral contracts that need to be revised. His only response is give us more money when in fact the only real solution is more money and less spending. What’s moral about a state employee contributing $150,000 during a 30 year career and then receiving benefits often in excess of $3 million in retirement? How would all you non-state workers like to have your salary “grossed up” by 6% the last four years of employment which essentially lets you retire at 100% of your salary and then just for fun we guarantee you an annual 3% bump or an inflation adjustment, whichever is greater. This is not a moral arrangement nor sustainable. Mr Brown can hide behind the morality play but he fools only the foolish. The money will run out and then pensioners will really be hurt. It’s time for the adults to enter the room and the put away the morality soapbox. I’m not optimistic, the current and prior governor are united by their opposite end of spectrum intransigence as both taxpayers and pensioners ultimately pay the price. An Illinois taxpayer can walk away from this financial mess. The pensioner does not have that luxury. The pensioner needs to come to the table now or wait till there’s not enough taxpayers on the other side. Florida and Indiana are looking a whole lot better.

  2. You have the right to the pension you signed up for when you were hired. Pension holidays were illegal move by the politicians. Corrupt politicians are responsible for all the costs of the state. Politicians and judges including politicians shi give up the pensions they have or will have in the future. It’s not the working employee who caused the situation.

    1. When you can work for 25 years and then retire for 40 on the public teat, you are part of the problem. Sorry if the truth hurts

  3. Great article, but I can sum it up in less words… Illinois is a kleptocracy.

    And to the commenters who say “pensions are a contract and are therefore sacrosanct”… I have news for you… Contacts get broken all… The…. Time. Dismount your high horse.

  4. The author overlooks critical context and ignores the role public pensions play in state and local economies and revenue generation.

    It is true that pension liabilities have been growing in absolute terms—but so has the economy. When we examine the ratio of pension debt and GDP growth in Illinois, the ratio has been pretty stable at around 2% of GDP.

    A recent study by researchers from the Federal Reserve, the Bank of England, and the Brookings Institution shows that pension debt is or can be mostly stabilized by modest adjustments even at relatively low rates of returns. Major reforms are not urgent.

    The author also overlooks the important role that public pensions play in generating revenues at the state and local level. In Illinois, for example, in 2018 investment of public pension assets and spending of retiree checks poured $78.3 billion into state and local economies. This, in turn, generated about $14.4 billion in state and local revenues. In the same year, taxpayer contributions to public pensions totaled $12.5 billion. In other words, public pensions generated $1.9 billion more than taxpayers contributed to them. If there were no public pensions, taxpayers in Illinois would have to pay $1.9 billion more in taxes to receive the current level of services.

    We must think twice before undermining public pensions.

    Hank H. Kim
    Executive Director and Counsel
    National Conference on Public Employee Retirement Systems
    Washington, D.C.

  5. Wouldn’t a fairer way of keeping the burden off of future generations be taxing all retirees (instead of just pensioners)? A graduated income tax could ensure low level public sector retirees who truly depend on meager pensions after a career providing underpaid service aren’t penalized, but triple-dipping part-time political appointees are. Likewise, rich private sector retirees who benefited from promising teachers and other public servants more money later can fix the problems they caused.

    I don’t get why the pension reform crowd wants elderly public servants to subsidize their richer beneficiaries, without seeing all other retirees as similarly free-loading leeches.

    I also don’t get why this article specifically mentions the Edgar Ramp only to dismiss criticism of it—her graph shows a huge debt acceleration that immediately follows Edgar’s administration.

    As a young Illinoisan, I think the morons who created this problem in both parties over the past six decades should pay for it—not me later, not all pension beneficiaries indiscriminately, and certainly not only them. I say this as someone who is not in a state pension and will also likely not retire wealthy.

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