Fifty-two years ago, Illinois adopted a new state constitution that favored a special interest through language that would later decimate the state’s finances and drive the tax burden to among the nation’s highest: the pension protection clause.
That one provision locked Illinois and its taxpayers into funding unsustainable retirement promises for government workers. Even though Illinoisans continue to make pension payments that eat into funding for other critical services, the state’s pension funds have still built up debt that Moody’s Investors Service estimates to be more than $300 billion and other forecasts predict will grow to $143 billion this year.
Now a proposal for another constitutional clause, Amendment 1, threatens to worsen Illinois’ precarious financial situation and place a greater financial burden on taxpayers. Amendment 1 would give that same special interest, government unions, the power to make broad new demands that would drive up the cost of government and force taxpayers to pay the bill. Voters will see this issue at the top of the ballot Nov. 8.
History offers a warning about the dangers of extending special treatment through the Illinois Constitution. When the pension protection clause was first submitted for consideration to the 1970 Constitutional Convention, delegate John Parkhurst of Peoria understood the implications.
“This is a terribly, terribly mischievous amendment,” he said. “It is the desire of a special interest group; it should be legislative; there is no history of impairment; there is no history of welching on any contracts; and to put it in the constitution is simply pandering to a group that haven’t been able to have their way in the General Assembly.”
Today, Illinoisans are feeling the pain of not heeding Parkhurst. The provision’s legacy has been one of costly and unsustainable pension promises. In 1990, 20 years after the new state constitution was adopted, the legislature passed a minimum 3% compounding cost-of-living adjustment completely untethered from inflation. Three years later, the Edgar Ramp, designed to push the pain of pension payments onto future generations, took effect.
In the following decades, Illinois would issue billions of dollars in bonds and take holidays to escape the punishing pace of funding pension demands. Meanwhile, Illinois’ credit rating dropped to the lowest of all 50 states — where it remains even after recent improvements. Annual pension payments are consistently taking up around one-fourth of the state budget, eating away at services for vulnerable children and adults.
Despite the pain the pension clause inflicted on the people of Illinois, government unions are pushing to pass an amendment that would extend their power far beyond public pensions. Lawmakers listened and put Amendment 1 on the Nov. 8 ballot.
Government union contracts already cost money, but under Amendment 1, unions could potentially bargain and strike over nearly anything, including subjects such as affordable housing assistance. The increased costs associated with these demands could be funded through any number of tax hikes or fees but would most likely be reflected in Illinoisans’ property taxes, which fund government at the local level.
An Illinois Policy Institute model estimates that an Illinois family with a house now worth $248,000 could pay an average of $2,100 more in property taxes during the next four years given current trends. Amendment 1 would likely drive up those costs indefinitely, given the unpredictable nature of the government unions’ demands.
Between its near-unlimited costs and almost permanent enshrinement in the state constitution, Amendment 1 would be the pension clause on steroids.
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Do Illinoisans really want to make it harder to repair our state by giving government unions an embedded and unfair power to pursue amorphous and expensive demands? Aren’t taxpayer burdens high enough in Illinois?
Illinois taxpayers should vote “no” on Amendment 1. We already erred in passing one amendment for this special interest. Let’s not make the same mistake twice.
Mailee Smith is director of labor policy and staff attorney at the Illinois Policy Institute. Joe Tabor is director of policy research at the institute.
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