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Cap Property Taxes First, Shift Pensions Second- Chicago Tribune Sunday Edition, Opinion Editorial

By Bruno Behrend
August 12, 2012

Bruno Behrend is executive director of For the Good of Illinois, an Illinois nonprofit that focuses on government transparency and fiscal responsibility.

Visit the website:  www.forthegoodofillinois.org.

READ THE FULL OPINION EDITORIAL AT: http://www.chicagotribune.com/news/opinion/ct-oped-0812-pension-20120812,0,1312985.story?track=rss&dssReturn

Illinois public policy has become such a Gordian knot that even good policy yields potentially horrible outcomes. With the state budget straining to meet payments — even after a huge tax increase — Illinois will soon be unable to meet its rapidly expanding pension bill.This is why some legislators in Springfield are pushing to shift teacher pension costs back to local school districts. This is good public policy that reverses one of the worst policies ever enacted in Illinois.Allowing the state to take responsibility for local contract decisions, combined with the state’s massive and unwarranted benefit expansions, has resulted in a massive subsidy to property-rich school districts. It has allowed districts to shower their employees with high salaries and benefits, putting the state taxpayer on the hook for sweet pension deals.

The most solvent pension fund in the state, the Illinois Municipal Retirement Fund, is solvent precisely because local government is mandated to pay for benefits as they are conferred. This means that unlike profligate school districts and other agencies with their state pension subsidy, municipalities must pay into the pension system in real time.

So, if it is such a good idea, and if Illinois is too tapped to meet its growing pension payments, why would anyone be against shifting the pension responsibility back to local entities? It’s quite simple. Your property taxes, already the highest-grossing tax in the state, will blow through the ceiling.

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