Crain's Chicago Business: The surprising sound of pension partisans agreeing for once

Though the calendar says it's time for wassailing, kissing under the mistletoe and related pursuits, the realities of state and city finances suggest it's time for something else: yet another effort—and maybe a successful one this time—to tame the pension monster that is eating our future alive, soaking up revenues needed for investments in schools, transit, social services and more.


As usual, the partisans are divided into their normal warring camps.

On one side are the flat-earthers, the folks who favor government bankruptcy and want to slash or, better yet, eliminate benefits and/or amend the state constitution to make government retirees just as cash-poor as those in the private sector who no longer can rely on a defined-benefit pension. On the other side are the socialist Democrats. They argue that just because the state granted 3 percent annual cost-of-living hikes to retirees when inflation was running 5 percent or more three decades ago, there is no reason to trim them now that inflation has been only 1 or 2 percent for a good 15 years running.

With the stalemate continuing—that 3 percent annual compounded COLA is the biggest driver of soaring pension costs here—the squeeze on taxpayers is growing. Unfunded state pension liability tripled in the past decade, according to former Illinois CFO John Filan, and now is north of $130 billion. At the city, it's $28 billion, despite $800 million in recent hikes in property and other taxes, with an additional $1 billion or so needed by 2023.




The question: How do you finance the shift?  Click here to read more