HR0876LRB098 20426 RPS 56221 r

1
HOUSE RESOLUTION

 
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 FY14 projected normal cost, calculated by the
15Commission on Government Forecasting and Accountability, for
16the State Universities Retirement System will be $680.9 million
17and for the Teachers' Retirement System will be $1.792 billion;
18and
 
19    WHEREAS, If these costs were combined they would represent
20a pension liability shift from the State to local governments
21of $2.473 billion for FY14 alone; and
 

 

 

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1    WHEREAS, Illinois already has one of the largest
2residential property tax burdens in the nation; and
 
3    WHEREAS, The consideration of a State cost shift of this
4magnitude, particularly when it is combined with the Property
5Tax Extension Limitation Law, will dramatically impact a school
6district's and community college's ability to allocate funds to
7pay for the normal cost of pensions; and
 
8    WHEREAS, 39 of the 102 counties, which represents 53% of
9the State's total school districts, are subject to the Property
10Tax Extension Limitation Law, which hinders the ability of a
11school district and community college to increase revenues to
12accommodate a significant cost shift of State obligations to
13local budgets; and
 
14    WHEREAS, The proposed cost shift would force significant
15local budget reductions, which means teacher layoffs and
16reductions in curricular offerings; and
 
17    WHEREAS, Over 60% of Illinois' public school districts are
18operating under deficit spending and only 20% have more than
19100 days of reserve cash on hand; and
 
20    WHEREAS, High property tax burdens in combination with the
21pervasiveness of school district financial instability, the

 

 

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1unpredictability in State funds directed towards education,
2and a whole host of statutorily required unfunded mandates have
3made it especially hard for local school districts to operate
4effectively; and
 
5    WHEREAS, It is anticipated that the cost shift for the
6State Universities Retirement System will force community
7colleges and universities to raise tuition in order to cover
8the increased costs; and
 
9    WHEREAS, In the case of institutions of higher education,
10every 1% of the normal cost shifted will require an additional
112% increase in tuition; and
 
12    WHEREAS, Institutions of higher education have already
13been raising tuition steadily to cover the static or reduced
14funding level from the State, most notably in the case of the
15University of Illinois, which has already raised tuition by
16112% in the last 10 years; and
 
17    WHEREAS, The unpredictable nature of pension costs makes it
18difficult to provide an accurate account of the total impact of
19a cost shift to local taxing districts, and it is even more
20difficult to ask a school district or institution of higher
21education to plan for these unknown factors over time; and
 

 

 

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1    WHEREAS, The concept of shifting additional financial
2burdens onto the State's already cash-strapped school
3districts and institutions of higher education would
4ultimately raise property taxes and increase tuition; and
 
5    WHEREAS, It is unfair and reckless to transfer an already
6well-established State financial responsibility onto local
7taxing districts, especially during this time of financial
8uncertainty; therefore, be it
 
9    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
10NINETY-EIGHTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
11the normal cost of pensions for our State educators is the
12responsibility of the State; and be it further
 
13    RESOLVED, That that the General Assembly should not use the
14current budget crisis as a reason to shift its financial
15responsibility for State pension costs to the local taxpayers.