Jim’s perspective on the issues facing Illinois.
Summary: Nothing is hurting the state more than the financial crisis we are currently experiencing. Illinois has $9 billion of unpaid bills, $130 billion in our unfunded pension liability, and a bond rating near junk status. We can’t truly invest in education, infrastructure, health care, and the restoration of our social service network until we find a way out of this financial crisis. I recommend the follow actions to put our fiscal house in order.
Prioritizing the payment of overdue bills:
- Create a short-term plan to repay all old debt as part of the budgeting process.
- Borrow as much as possible, at rates lower than the interest currently being paid on the late bills themselves, to save interest expenses (some of this has been done already, but I suspect more could be done).
- Reduce late payment interest penalties on future bills. Yes, we should pay our bills on time, but there is no reason why late payment charges go up to 12%. Let’s find a way to reduce those interest rates that are more in line with what other states pay.
- Reduce our unfunded liability: I believe that we should re-amortize our pension debt over the next 50 years to get it somewhere between 80-100% funded. Paying a level amount would reduce future spikes in payments and spreading out the payments over a longer period of time (currently set to end in 2045) would reduce the amount paid annually. We should also make it mandatory that pensions payments are paid in full each year.
- Creating a sound retirement system for the future. All options should be on the table including traditional pensions and 401K style plans. I am hopeful that the Tier III pension system (that passed last summer) can be a starting point to constructing a program that offers a stable and secure income for retirees, and a more affordable model for state government.
- GARS pension (General Assembly Retirement System). Illinois should phase out the current pension plan and replace it with a defined contribution plan (i.e. 401K style plan). Elected officials in Illinois should not run for office for the pension plan. A defined contribution plan during the years that a person is an elected official should be sufficient.
We need a better way to draw legislative districts after the next census— one that balances community with common sense. Right now, we have too many deep red and deep blue districts that are unfairly designed for purely partisan purposes. We need more purple districts, where elected officials must listen to the opinions of all constituents, not just those from their own party.
Let’s push back party primaries to August or September like twelve other states do. This change will create shorter campaigns, reduce the amount of money spent on elections, and encourage more cooperation in Springfield. Under the current system, primaries are scheduled for March. By the time you back into the calendar for collecting signatures and verifying paperwork, new campaigns start just eight months after elected officials are sworn in.
Summary: Illinois students are choosing to go elsewhere in higher and higher numbers. If we are to maintain our status as an elite location for education, we must invest with our dollars and with innovative thinking.
The best way to attract Illinois students to attend college in state is to have a healthy economy and a strong and reliable investment in higher education. What else can Illinois do? Illinois should consolidate its nine university boards. Some of the best public university systems in the country have similar structures like Wisconsin, California, and New York. Consolidating university boards will streamline costs and enable the 12 state universities to develop their own areas of specialization.