Last week S&P downgraded Illinois to the worst debt rating in the nation. The reason was simple: Illinois still has not done anything about its unsustainable pension system for state workers. Maybe the downgrade caused some soul searching on the union side of the bargaining table because AFL-CIO president Michael Carrigan wrote a letter to state leaders proposing a "pension summit" be held next month.
Michael Madigan who is the House Speaker in IL as well as the state's Democratic party chairman didn't take the suggestion very well. He wrote a blistering two-page response to Carrigan which the State Journal Register succinctly summarized as "Drop dead":
The residents of Illinois have been asked to shoulder a higher tax burden in recent years.
For several years, Illinois has had to address very serious issues,
including rising pension, Medicaid and state healthcare costs, all of
which have contributed to the state’s massive budget pressures. The
state has reduced spending in many areas, but costs for pensions
continue to increase and unions representing state employees insist that
salaries be increased. Many state lawmakers understand the difficult
situation before us, having voted to cut their own legislative pay the
last four years.
To date, we have received no cooperation from the labor unions
representing state employees on addressing these challenges. In fact,
these unions often have been strongly opposed to any attempt to solve
the problem. For example, AFSCME recently said it will not ratify a
contract that decreases the take-home pay of its employees. [Emphasis added]
It is worth noting a recent editorial points out that of the 12 most
populous states, Illinois has the fourth highest average state worker
pay, including overtime, and information from the U.S. Bureau of Labor
Statistics and Kaiser Family Foundation shows that Illinois state
workers pay significantly less for their insurance premiums than those
in the private sector.
It is time for labor to come to the table with an honest proposal that
recognizes the state’s serious fiscal condition and puts government
employees on par with those in the private sector relative to a benefits