Illinois General Assembly - Full Text of SR1519
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Full Text of SR1519  98th General Assembly




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2    WHEREAS, A proposed educational pension cost shift, which
3would shift the cost burden from the State of Illinois to local
4school districts, community colleges, and institutions of
5higher education, is under discussion; this proposal would
6require all employers of members in the Teachers' Retirement
7System and the State Universities Retirement System to pay the
8normal cost of pension benefits earned; and
9    WHEREAS, If this proposal were to become policy, for the
10Teachers' Retirement System and the State Universities
11Retirement System, it would potentially move $10.187 billion in
12estimated normal costs of pension benefits earned from the
13State to local school districts, community colleges, and
14institutions of higher learning over a 10-year period;
15actuarial changes recently made by these 2 systems will further
16increase these numbers; and
17    WHEREAS, This plan would move these spending commitments
18from one taxing body, the State, to a group of taxing bodies,
19the school districts and community colleges, while additional
20pension costs would be shifted to State universities; and
21    WHEREAS, A pension cost shift would lead to a massive
22increase in local funding requirements on school districts; the



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1cost shift would exacerbate the problem of adequately funding
2our local schools by taking even more when districts, teachers,
3and local voters are fighting to simply keep educational
4opportunities open to our students; in addition, a pension cost
5shift would likely lead to massive property tax hikes or to
6classroom cuts that will harm our students; and
7    WHEREAS, According to the Illinois State Board of
8Education, 67% of school districts in the State are operating
9in the red; and
10    WHEREAS, School districts already bear a large share of the
11Teachers' Retirement System pension burden by paying a
12statutory share of the System's total contribution costs,
13constituting 0.58% of pensionable teacher payroll; districts
14also contribute towards any locally-negotiated early
15retirement options and for the pension costs of certain
16increases in compensation, totaling $92.5 million in Fiscal
17Year 2012; and
18    WHEREAS, Representatives from Northern Illinois University
19publicly stated that if the cost shift were to be covered by
20increasing tuition on parents and students, each percentage of
21payroll cost shifted to the university would translate into a
222% tuition increase; this proposed cost shift would also
23increase the liability of State-funded universities and all



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1community colleges, thus making higher education even more
2unaffordable for students and their parents; and
3    WHEREAS, This plan would harm the interests of all
4taxpayers, especially in downstate and suburban areas and would
5sharply increase inequities created by the current school aid
6formula between Chicago and the rest of the State; because of
7the impact on institutions of higher education, Chicago
8taxpayers, parents, and students would also be affected;
9therefore, be it
11ASSEMBLY OF THE STATE OF ILLINOIS, that we state our belief
12that an educational pension cost shift is financially wrong and
13would only serve to shift pension burdens from the State to the
14status of an unfunded mandate.