SR0545 100TH GENERAL ASSEMBLY

SR0545 LRB100 12962 MST 27058 r

SENATE RESOLUTION

WHEREAS, A proposed educational pension cost shift, which would shift the cost burden from the State of Illinois to local school districts, community colleges, and institutions of higher education, is under discussion; this proposal would require all employers of members in the Teachers' Retirement System and the State Universities Retirement System to pay the normal cost of pension benefits earned; and

WHEREAS, If this proposal were to become policy, for the Teachers' Retirement System and the State Universities Retirement System, it would potentially move $10.187 billion in estimated normal costs of pension benefits earned from the State to local school districts, community colleges, and institutions of higher learning over a 10-year period; actuarial changes recently made by these 2 systems will further increase these numbers; and

WHEREAS, This plan would move these spending commitments from one taxing body, the State, to a group of taxing bodies, the school districts and community colleges, while additional pension costs would be shifted to State universities; and

WHEREAS, A pension cost shift would lead to a massive increase in local funding requirements on school districts; the cost shift would exacerbate the problem of adequately funding our local schools by taking even more when districts, teachers, and local voters are fighting to simply keep educational opportunities open to our students; in addition, a pension cost shift would likely lead to massive property tax hikes or to classroom cuts that will harm our students; and

WHEREAS, According to the Illinois State Board of Education, 67% of school districts in the State are operating in the red; and

WHEREAS, School districts already bear a large share of the Teachers' Retirement System pension burden by paying a statutory share of the System's total contribution costs, constituting 0.58% of pensionable teacher payroll; districts also contribute towards any locally-negotiated early retirement options and for the pension costs of certain increases in compensation, totaling $92.5 million in Fiscal Year 2012; and

WHEREAS, Representatives from Northern Illinois University publicly stated that if the cost shift were to be covered by increasing tuition on parents and students, each percentage of payroll cost shifted to the university would translate into a 2% tuition increase; this proposed cost shift would also increase the liability of State-funded universities and all community colleges, thus making higher education even more unaffordable for students and their parents; and

WHEREAS, This plan would harm the interests of all taxpayers, especially in downstate and suburban areas and would sharply increase inequities created by the current school aid formula between Chicago and the rest of the State; because of the impact on institutions of higher education, Chicago taxpayers, parents, and students would also be affected; therefore, be it

RESOLVED, BY THE SENATE OF THE ONE HUNDREDTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we state our belief that an educational pension cost shift is financially wrong and would only serve to shift pension burdens from the State to the status of an unfunded mandate.