KURT ERICKSON heads the Lee Enterprises Springfield Bureau, which serves The Southern and other Lee newspapers; contact him at kurt.erickson@lee.net or 217-789-0865.

Other editorials by Kurt Erickson can be found here

From the Southern Illinoisan Website...

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At least we are not Wisconsin

By Erickson

Along with not having the Tommy Bartlett Water Show or the Green Bay Packers, Illinois has at least one other thing that's not like Wisconsin: A government threatening to bust the public employee unions.

Last month, Illinois Gov. Pat Quinn's budget team said the state constitution prohibits them from messing with existing public worker retirement and health care benefits.

On Wednesday, the Senate Democrats' top lawyer released an opinion concluding that any legislation designed to reduce the pension benefits of current employees or retirees would violate the state constitution.

Some referred to attorney Eric Madiar's opinion as a legal brief, although at 76 pages, it was anything but a quick review.

Madiar researched why the constitution was written in the way it was and determined the framers included this protection because, even back in the 1970s, lawmakers had failed to adequately finance the state's pension obligations.

"These groups reasoned that constitutional protection was necessary because the General Assembly would renege on its pension obligations to public servants during a financial crisis," Madiar wrote.

This is a key point. There is a lot of angst about so-called "gold-plated public pensions" and how the state's unpaid pension obligations are weighing down the state's budget situation.

But Madiar's treatise offers the real explanation for the state's pension problems: Lawmakers - the people you elect to make hard decisions - haven't been willing or able to make hard decisions about taxing and spending.

Rather than anger voters or other core constituencies by raising taxes or cutting programs to deal with the state's employee retirement costs, the General Assembly and governor simply didn't pay.

So where does all this lead?

Democrats who control Illinois government have made it clear they aren't angling to make any Scott Walker-esque attempts to eliminate collecting bargaining rights.

But, that leaves the state facing a huge bill. Auditor General Bill Holland said last week that the state's annual pension obligation could approach $7 billion within the next four years.

That's the same amount the recent income tax hike is expected to generate. In other words, if lawmakers actually pay what is really owed to the pension systems, the additional money you're paying to the state won't be going to new programs.

It will be going to correct the mistakes of elected officials dating back at least three decades.

We're not Wisconsin. But we're not out of the woods either.

Money, money, money

The Legislature is trying to do something this year it has never quite accomplished in the past: Create a spending plan based in reality.

Unlike most household budgets, which try to align spending with income, the state budget is created by guessing how much more money the state will get in a given year, and then divvying up the extra among various pet programs of those who control things.

This year, they've devised a plan to first establish how much money is going to flow into the state's checkbook, and then design a spending plan that reflects that amount.

The process isn't starting out well.

In a hearing of the House Revenue Committee, chaired by state Rep. John Bradley, D-Marion, lawmakers received little help in their quest for a figure from the Department of Revenue. The agency, which collects your taxes, hadn't even added up how much they expected to get from the various taxes you pay.

Then there is disagreement between the Legislature's fiscal forecasting office and Quinn's budget office over an estimated $300 million in expected revenue.

Compounding the situation is something Bradley called "lag," which is the delay the state faces in collecting the additional money it will be getting from the income tax increase approved by the lame-duck Legislature in January.

For now, it looks like the House will adopt a "conservative" figure of $33.2 billion. It's not clear if the Senate will go along with that number.

Plate wars

With little extra money to play with and enough laws already on the books, lawmakers must search for ways to justify their existence.

Luckily, they can always create new license plates.

Illinois already has dozens of varieties of license plates, many of which are designed to raise money for various causes.

Pending in the General Assembly right now are designs for 31 more new specialty license plates, including one that would highlight NASCAR.

My favorite license plate bill doesn't create a new plate at all. Rather, it eliminates all specialty license plates.

From the neatoday.org website...

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State Legislatures Underfunded Pensions

By Kevin Hart

If Lady MacBeth were observing the current political discourse on public employee pensions, she might be inclined to quip that some elected officials seem to be protesting too much.

As states grapple with unfunded pension liabilities, many elected officials are calling the plans unaffordable and relics of the past. Meanwhile, many of these same politicians were instrumental in creating the unfunded pension mess by refusing, year after year, to adequately fund their states’ pension systems.

And while some want to blame pension funding shortfalls on stock market losses from the current recession, the problem goes back much further in many states. New Jersey, for example, is currently claiming an unfunded pension liability of $54 billion, leading Gov. Chris Christie to call for cuts to public employee pensions.

But the truth is, for each year since 2002, New Jersey lawmakers have refused to contribute the recommended level of funds to the state pension system. Last year, Gov. Christie elected to skip a $3 billion payment, nearly guaranteeing that the gap will grow.

The pension shortfall is largely man-made. In fact, within the past decade, New Jersey had a pension surplus.

“For much of the last decade and a half, the state of New Jersey has failed to make any contributions to the pension funds, allowing a large deficit to grow,” New Jersey Education Association President Barbara Keshishian pointed out in a statement this fall. “Over that same period, teachers and other school employees contributed billions of their own money into the funds, and even increased their contributions in a good faith effort to stabilize the pension funds.”

Many pension opponents advocate a 401(k)-style “defined contribution” investment vehicle for retiring public employees. These types of defined contribution plans are built on the premise that workers should invest while they are young, in order to benefit from compound interest and investment gains. The $5,000 you contribute today could become $50,000 decades later. By the same token, if you don’t contribute the $5,000 now, you need to contribute $50,000 later to ensure you have enough retirement income.

That’s why it’s ironic that some of these same defined contribution proponents refused to contribute a smaller amount to their state pension systems when they could – now, they need to fund a much larger amount.

It’s a national problem – elected officials in several states refused to adequately fund their states’ pension systems. Illinois, for example, has a pension system underfunded by $90 billion thanks to years of skipping annual contributions or borrowing money to make the contributions. The situation is similar in many other states.

“Rather than cut services, [Illinois] usually chose to underfund its employer contribution,” according to a fact sheet from the Illinois Retirement Security Initiative. “Over time, this chronic failure to make the full employer contribution is the primary reason for Illinois state government’s predicament today, facing the worst unfunded pension liability in the country.”

Put simply, political decisions caused the current pension funding problems in many states, and now public workers feel like they are being unfairly blamed and asked to foot the bill.