Pension reform could affect local school districts

By WEEK Reporter
By Marc Strauss

Pension reform could affect local school districts

June 7, 2012 Updated Jun 7, 2012 at 2:34 PM CDT

SPRINGFIELD, Ill -- Illinois' credit rating could soon be downgraded if state lawmakers don't agree on pension reform.

The biggest hurdle is how to shift billions of dollars in pension liabilities from the state to cities and local school districts.  State Senator Dave Koehler says the longer it takes to fix the problem, the worse its going to get.

"We also have a back debt because of decades of bad decisions and under-funding the pension system we have to make that up somehow," Koehler said.

Koehler supports legislation that shifts more responsibility for funding pensions to individuals.  To help fund their pensions, Illinois public school teachers are supposed to contribute to the Teachers Retirement System. 

Koehler says that not all of them do.

"I've heard there are districts that pay the employee portion of retirement so they can incentives teachers to come work for their school district," Koehler said.

Koehler participated in a debate Thursday with 46th district challenger Pat Sullivan, who says if school districts have to pick up more of the tab for pensions it will mean higher taxes.

"All that is another property tax increase," Sullivan said.  "We've got to quit increasing if we're going to draw jobs to this state."

Meanwhile, State Representative Dan Brady sees a proposal favored by the governor and house speaker as inequitable.

"A lot of the school don't have the money and its only suburban and downstate districts, not Cook County sharing in any type of costs under this new plan for pensions," Brady said.

And as the debate continues, the debt grows.

To submit a comment on this article, your email address is required. We respect your privacy and your email will not be visible to others nor will it be added to any email lists.