Bill Text: IL HR0876 | 2013-2014 | 98th General Assembly | Introduced

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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: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HR0876 Detail]

Download: Illinois-2013-HR0876-Introduced.html

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HOUSE RESOLUTION
WHEREAS, Illinois' continuing budget crisis and slow
economic recovery has motivated discussion on how to save the
State money, including a misguided proposal to shift the
State's funding of the normal pension cost for the State
Universities Retirement System and the Teachers' Retirement
System to local entities, such as school districts and
community colleges, and to public universities; and
WHEREAS, Decades of the State's chronic mismanagement of
funds and failure to adequately fund its five pension systems
has resulted in a ballooning pension payment that has been
crowding out funding to critical State programs and services
for education, human services, and public safety; and
WHEREAS, The FY14 projected normal cost, calculated by the
Commission on Government Forecasting and Accountability, for
the State Universities Retirement System will be $680.9 million
and for the Teachers' Retirement System will be $1.792 billion;
and
WHEREAS, If these costs were combined they would represent
a pension liability shift from the State to local governments
of $2.473 billion for FY14 alone; and

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WHEREAS, Illinois already has one of the largest
residential property tax burdens in the nation; and
WHEREAS, The consideration of a State cost shift of this
magnitude, particularly when it is combined with the Property
Tax Extension Limitation Law, will dramatically impact a school
district's and community college's ability to allocate funds to
pay for the normal cost of pensions; and
WHEREAS, 39 of the 102 counties, which represents 53% of
the State's total school districts, are subject to the Property
Tax Extension Limitation Law, which hinders the ability of a
school district and community college to increase revenues to
accommodate a significant cost shift of State obligations to
local budgets; and
WHEREAS, The proposed cost shift would force significant
local budget reductions, which means teacher layoffs and
reductions in curricular offerings; and
WHEREAS, Over 60% of Illinois' public school districts are
operating under deficit spending and only 20% have more than
100 days of reserve cash on hand; and
WHEREAS, High property tax burdens in combination with the
pervasiveness of school district financial instability, the

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unpredictability in State funds directed towards education,
and a whole host of statutorily required unfunded mandates have
made it especially hard for local school districts to operate
effectively; and
WHEREAS, It is anticipated that the cost shift for the
State Universities Retirement System will force community
colleges and universities to raise tuition in order to cover
the increased costs; and
WHEREAS, In the case of institutions of higher education,
every 1% of the normal cost shifted will require an additional
2% increase in tuition; and
WHEREAS, Institutions of higher education have already
been raising tuition steadily to cover the static or reduced
funding level from the State, most notably in the case of the
University of Illinois, which has already raised tuition by
112% in the last 10 years; and
WHEREAS, The unpredictable nature of pension costs makes it
difficult to provide an accurate account of the total impact of
a cost shift to local taxing districts, and it is even more
difficult to ask a school district or institution of higher
education to plan for these unknown factors over time; and

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WHEREAS, The concept of shifting additional financial
burdens onto the State's already cash-strapped school
districts and institutions of higher education would
ultimately raise property taxes and increase tuition; and
WHEREAS, It is unfair and reckless to transfer an already
well-established State financial responsibility onto local
taxing districts, especially during this time of financial
uncertainty; therefore, be it
RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
NINETY-EIGHTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
the normal cost of pensions for our State educators is the
responsibility of the State; and be it further
RESOLVED, That 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.