Those opposing the Oak Park referendum on repealing Illinois’ anti-boycott legislation have argued that the 2015 law we seek to repeal does not financially impact the state pension system and distracts Oak Parkers from the issues impacting the delivery of local services. Both arguments are incorrect.
It is true that there was no comprehensive analysis of the law’s potential impact on Illinois pension investments and there has been no reporting of the impact of pension investment decisions by the Illinois Investment Policy Board. The absence of responsible fiduciary analysis and reporting does not establish that there was no financial cost. Independent analysis of publicly available data by the Illinois Coalition for Human Rights has shown substantial loss to the chronically underfunded state pension fund. [1]
At the Illinois House committee’s Subject Matter Hearing on April 30, Professor Kenneth Kriz testified as an expert witness (neither a proponent nor opponent of the repeal bill) about the mechanisms by which investment restrictions can adversely affect pension performance and increase costs to statewide taxpayers: through reducing the universe of investments, preventing investment boards from considering strong-performing instruments, diminishing portfolio diversification, and increasing administration and compliance costs. [2]
The 2015 law affects all Oak Parkers, not only the state pension holders. Pension debt obligation currently represents 20% of the state budget, the largest single budget item. [3] Statute requires the Illinois budget to cover 90% of the expected pension obligations. [4] This means that, by statute, decreasing pension fund performance increases the state budget pension obligations – budget lines that could be spent on education, health care, and infrastructure in districts. And, of course, the state budget determines the levels of state taxes and fees.
A state budget, like any budget, is both a financial and moral document. Does Oak Park want the state budget expenses and our tax dollars to be invested in shielding Israel from its well documented human rights violations at the expense of pension fund performance and erosion of the right to peaceful protest by boycott?
I urge you to do your own moral math and vote Yes on this referendum.
[1] Illinois Coalition for Human Rights. “Frequently Asked Questions.” https://www.ilchr.org/ichr
[2] Full Hearing – IL House International Relations, Tourism, and Trade Committee Hearing on HB 2723. https://www.youtube.com/watch?v=9z9Op0WJ268
[3] Illinois Policy. “Pensions Eat Up $11.6B of Illinois’ Budget.” https://www.illinoispolicy.org/pensions-eat-up-11-6b-of-illinois-budget/
[4] The Civic Federation, Blog, Dec. 7, 2016. https://www.civicfed.org/iifs/blog/90-pension-funding-right-target-illinois
Janet Settle
Chicago
Former longtime resident of Oak Park
