It’s clear that Illinois is heading in the wrong economic direction. We have a 9.2 percent unemployment rate (second highest in the country), $6 billion of unpaid bills that will continue to grow, $100 billion of unfunded pension liabilities, the worst credit ratings in the nation, and a pension crisis.
The only way to start turning Illinois around is to adopt meaningful public employee pension reform soon. We owe to it our hard-working teachers and state workers to save the pension systems.
It’s a crisis because if we don’t act soon, Illinois will continue to be plagued with high unemployment and economic uncertainty. Small businesses will not want to expand and companies will not want to locate in Illinois because they will be concerned about the prospect of higher tax rates to fund future pension obligations.
I applaud the members of the Pension Conference Committee for diligently working to develop a solution for the pension crisis. That said, I respectfully encourage them to finish their work with the involvement of the legislative leaders and develop a meaningful bipartisan bill. An acceptable bill would include provisions that limit future cost-of-living adjustments, increase the retirement age, and adopt a pension salary cap.
A meaningful state pension bill would serve as a template for a Chicago teachers’ pension reform bill that would help Chicago address its rapidly deteriorating financial situation. If we don’t take action now and quickly follow up with a Chicago pension fix, Chicago residents will be faced with higher property taxes and cuts to basic human services.
The wrong answer to solving the pension crisis is to raise taxes. There is now a strong movement to adopt a constitutional amendment to allow a graduated income tax in Illinois.
The top tax rate under the graduated income tax could be as high as 11 percent and result in a 2015 tax increase for families with income as little as $7,000 a year. There is also a lot of discussion about making the temporary 67 percent increase in the individual tax rate permanent.
We need to produce new revenue by creating favorable conditions for economic growth and new jobs, not by raising tax rates. We, of course, also need to cut spending while protecting benefits for the disabled and our most vulnerable citizens.
It’s time for all of us to put politics aside and adopt a meaningful pension reform bill that will save the pension systems and start us on the path to economic recovery in Illinois. If we don’t act soon, our leaders will have to explain to Illinois residents why they didn’t take the necessary steps to save the pension systems and prevent higher tax rates.
As former Illinois Sen. Everett Dirksen said, “There is no force so powerful as an idea whose time has come.”
The time for real pension reform is now.
• State Rep. David McSweeney, R-Barrington Hills, represents the 52nd House District, which includes portions of Crystal Lake, Cary, Fox River Grove, Lake in the Hills, Barrington Hills and other communities. He can be reached at email@example.com.