State Sen. Don Harmon addressed a roomful of constituents last week about what he called “the elephant in the room,” better known as the Illinois pension debate.
Harmon (D-39th) spoke bluntly about the issue that has been making headlines statewide and said many key elements of the debate should not be labeled as a “crisis” but as a fundamental difference in how lawmakers approach the state’s budget problems.
“Everything has been clouded by pensions,” Harmon said at a town hall meeting, June 28.
The political gridlock, Harmon said, boils down to a philosophical difference of opinion on how to make up for mistakes made by the Illinois legislature during the past 50 years (particularly the mid-1990s) that left pension obligations unfunded.
But it’s a reality the current legislative body must deal with instead of kicking the can down the road, Harmon said.
Based on media reports, he added, it would appear the “pension crisis,” as it’s been labeled, is unsolvable and that the “sky is falling.” Tough conversations remain for lawmakers, he emphasized, but change is achievable.
“We have never missed a pension payment. I don’t believe we ever will,” Harmon said. “We are not bankrupt … but we can’t fund core services because of unmet costs over the past half century. It’s a budget problem, not a pension problem.”
Harmon focused a portion of the meeting, held at the Carleton Hotel, on education and pension funding, pointing to graphs showing how the two have flipped over the years.
As the state is forced to spend less and less on education because of budget woes, pension obligations have risen dramatically, he said. But the $100 billion or so in unmet pensions has lawmakers stumped on how to move forward.
A history lesson about the state’s pension issue was also provided, with Harmon focusing on 1995 when lawmakers said they “solved the pension problem.” In reality, the group established a system that structurally unfunded pensions for a decade.
“They pushed it off for tomorrow and created a ramp,” Harmon said.
A little more than a decade later the economy crashed.
“We had the perfect storm,” he noted.
Illinois undertook its most comprehensive pension reform in 2010 but is playing catch up with past mistakes that can’t be cleaned up quickly. Now it’s up to the Illinois General Assembly to come up with a compromise, a decision that’s supposed to be completed by July 9. Harmon called that date unrealistic, an “artificial deadline.”
A bipartisan conference committee has been formed to address two senate bills currently on the table, but key differences in opinion between House Speaker Michael Madigan and Senate President John Cullerton have escalated the pension tension. The July 9 solution, requested by Governor Pat Quinn, won’t happen, reiterated Harmon, pointing out that neither of the Senate proposals push the problem down the road. There are “hiccups” ahead but the problem will be solved, he said.
“In a humane way, we are trying to maintain paying pensions. We can solve this,” Harmon said. “We’re going to get through this. This is difficult water, but we’re going to get through it.”
The best approach now, he said, is the new committee, a fresh legislative approach to tackling the “principle and intellectual differences” between the two sides. Harmon said the General Assembly can’t stand pat on pensions or pass “reform” without real solutions for long-term change.
“We need to get this done for the next fiscal year, but we need to get it done right. The sky won’t fall in the next week,” Harmon said. “We could solve it today. But it would create a ramp for those 10 years down the road.”