Bill Text: IL HR0038 | 2017-2018 | 100th General Assembly | Introduced

Bill Title: Recognizes that the normal cost of pensions for State educators is the responsibility of the State and that the General Assembly should not use the current budget crisis as a reason to shift its financial responsibility for State pension costs to the local taxpayers.

Spectrum: Bipartisan Bill

Status: (Introduced) 2017-09-28 - Rule 19(b) / Re-referred to Rules Committee [HR0038 Detail]

Download: Illinois-2017-HR0038-Introduced.html

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2 WHEREAS, Illinois' continuing budget crisis and slow
3economic recovery has motivated discussion on how to save the
4State money, including a misguided proposal to shift the
5State's funding of the normal pension cost for the State
6Universities Retirement System and the Teachers' Retirement
7System to local entities, such as school districts and
8community colleges, and to public universities; and
9 WHEREAS, Decades of the State's chronic mismanagement of
10funds and failure to adequately fund its five pension systems
11has resulted in a ballooning pension payment that has been
12crowding out funding to critical State programs and services
13for education, human services, and public safety; and
14 WHEREAS, The FY18 projected normal cost for the State
15Universities Retirement System will be $424.9 million and for
16the Teachers' Retirement System will be $967.5 billion; and
17 WHEREAS, If these costs were combined they would represent
18a pension liability shift from the State to local governments
19of $1.392 billion for FY18 alone; and
20 WHEREAS, Illinois already has one of the largest
21residential property tax burdens in the nation; and

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1 WHEREAS, The consideration of a State cost shift of this
2magnitude, particularly when it is combined with the Property
3Tax Extension Limitation Law, will dramatically impact a school
4district's and community college's ability to allocate funds to
5pay for the normal cost of pensions; and
6 WHEREAS, The Property Tax Extension Limitation Law hinders
7the ability of a school district and community college to
8increase revenues to accommodate a significant cost shift of
9State obligations to local budgets; and
10 WHEREAS, The proposed cost shift would force significant
11local budget reductions, which means teacher layoffs and
12reductions in curricular offerings; and
13 WHEREAS, High property tax burdens in combination with the
14pervasiveness of school district financial instability, the
15unpredictability in State funds directed towards education,
16and a whole host of statutorily required unfunded mandates have
17made it especially hard for local school districts to operate
18effectively; and
19 WHEREAS, It is anticipated that the cost shift for the
20State Universities Retirement System will force community
21colleges and universities to raise tuition in order to cover

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1the increased costs; and
2 WHEREAS, The unpredictable nature of pension costs makes it
3difficult to provide an accurate account of the total impact of
4a cost shift to local taxing districts, and it is even more
5difficult to ask a school district or institution of higher
6education to plan for these unknown factors over time; and
7 WHEREAS, The concept of shifting additional financial
8burdens onto the State's already cash-strapped school
9districts and institutions of higher education would
10ultimately raise property taxes and increase tuition; and
11 WHEREAS, It is unfair and reckless to transfer an already
12well-established State financial responsibility onto local
13taxing districts, especially during this time of financial
14uncertainty; therefore, be it
17normal cost of pensions for our State educators is the
18responsibility of the State; and be it further
19 RESOLVED, That the General Assembly should not use the
20current budget crisis as a reason to shift its financial
21responsibility for State pension costs to the local taxpayers.