Folly and Fizzle

The folly is the fun and games that entice us away from duty and chore. The fizzle is the promise the fun holds in store but never quite delivers. Especially true is the larger mass of task and duty that has built up yet to do.

Putting off needful work for present satisfaction is not always a good choice. We may be due for some relaxation at some point and need to restore our batteries before continuing with work. That is understandable as long as it is an honest appraisal of the situation.

When we were kids we were reminded often to ‘not put off ‘til tomorrow what you can do today.’ Remember hearing that from you parents? Or worse, your grandparents? It seemed such an old person’s rant at the time; and yes we resented it!

But they were right. Then and now as we recall the long ago lessons.

Here’s a folly: Illinois legislature balancing the budget over the past 70 years by most often not paying the full funding of pension plans. At the time it put a stop to bickering among politicians while citizen programs were fully funded. Well, not all were funded.

The pensions were not funded. Those who were relying on those pensions cautioned the legislature to reform their folly so we wouldn’t face a dire problem in the future. I know this to be true; I worked at the U of I at Chicago for 17 years. I paid into the SURS pension plan (State University Retirement System). So did the University. But the state did not; it merely paid the short fall pay outs for current benefits paid to retirees. The payments into the endowment funds/actuarial investment fund were not paid. The shortfall represents investment dollars which, when allowed to compound interest earnings from investments, would swell the trustee funds steadily to meet future pay out funding needs.

SURS beneficiaries lobbied the legislature actively in those days (70’s and 80’s) to reform their ways. They didn’t. And now?

And now we have the fizzle.

SURS is a smaller pension fund than the other big three: teachers retirement system, state employee retirement system, and municipal employees retirement system. There may be other retirement programs connected with these four systems, but taken together the unfunded liability for future benefits payable is estimated conservatively at $100 billion. Some estimates are much higher, but most likely not accurate at $230 billion.

Whatever the grand dollar total, the state is in serious financial trouble because our elected officials played folly and now we the people have to pay for the fizzle.

What makes this problem so galling to me is the fact that so many knowledgeable people told the state government what the problem was decades ago and how to fix it with little trouble. But no, they took the easy way out and now we all have a problem.

I have heard many taxpayers say that the benefits should be reduced to fix the problem. That means all current retirees would have a cut in their benefits they now receive, and most likely would be made to pay more for the insurance benefits they are now receiving. Future retirees would have to do with much lower benefits as well. At least they have some time to prepare for the challenge being suggested.

Current retirees, however, have no time to make changes other than live on less and pay out more. The stark reality of this is, however, that many of those retirees cannot do this. They would lose homes, lose apartments, lose automobiles, and most likely lose healthcare benefits. Not a very nice reward for decades of commitment and good work for state institutions.

Has this sort of thing happened to people in the private sector? Yes it has; but usually those cases were rare and occurred because a private corporation went broke and mismanaged pension and benefit accounts on their road to bankruptcies. A federal pension guarantee program safeguards some of the benefits for those marooned retirees, but the benefits are a fraction of what they were promised and worked hard for.

The full faith and trust of the state and federal government is just that. They are trusted to perform as promised. The thought of cutting benefits for current retirees and for future ones is unconscionable.

Add to this the realization that these employees have been working for the common good of the state of Illinois. If that trust is ultimately broken and abandoned, who will we hire to do this important work in the future? Do you suppose they will trust the government to fulfill their promises? If not, maybe they won’t work for the state. And those that do may demand and get much higher salaries. Think of the programs that will cease to exist as a result. Those higher costs will be paid from what we used to pay for other programs that are now dumped.

The quality of life is a two way street. The state works for the benefit of its citizens. The citizens pay for this with tax dollars. Those who actually do the work for the citizens, are people just like you and I. They deserve a quality of life measure for the work they have been dedicated to. And they pay taxes just like you. Cheating them because your and our legislators screwed up in spite of knowledgeable warnings, is not the answer. Removing the guilty legislators (all voting to approve these actions in the past) should be done post haste; also, all previously serving legislators who voted for these actions should be denied all financial benefits of their elected service. They performed poorly and owe us money, not we they.

July 17, 2017