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 The Illinois Senate’s “grand bargain” threatens Illinoisans with billions in
tax hikes because it does virtually nothing to reform how government spends
taxpayer money.
But there is a lot to reform, especially in public-sector contracts and the
perks they contain.
Take unused sick leave, for example.
Government workers can accumulate their unused sick leave until they retire – up
to two years’ worth in some cases. That accumulated sick leave can then be
cashed in to boost their pensions.
University employees enjoy this perk. State workers do, too. As do local city
and municipal workers. And K-12 teachers. In contrast, such a perk is virtually
unheard of in the private sector.
The sick-leave perk’s benefits aren’t trivial. Top school district
superintendents, for example, have used the perk to boost their pensions by
$350,000 or more over the course of their retirements. That helps boost their
already inflated pensions even more.
 For example, Henry Bangser, a former superintendent of New Trier Township High
School District 203, can expect to receive $7.5 million in benefits over the
course of his retirement – $440,000 of which is due to accumulated unpaid sick
leave.
Unpaid sick leave will cost taxpayers $3.4 billion over the next three decades
It’s not just the top pensioners who benefit from the perk.
In all, more than 70 percent of the 100,000-plus current downstate and suburban
retired teachers have cashed in unused sick leave.
Illinois teachers can accumulate unpaid sick days throughout their careers,
rolling over unused days from year to year to amass up to two years’ worth of
sick days.
At retirement, teachers can turn their accumulated sick days into service credit
that spikes their starting pension benefit, with each unused sick day treated as
an additional day spent in the classroom. Essentially, teachers can receive
pension benefits for up to two years they never spent in the classroom.
That can have a big impact on a retiree’s pension. A retiree with 30-plus years’
service can expect his or her pension to be boosted by more than $150,000 over
the course of his or her retirement if that retiree cashes in the full two years
of sick leave.
In total, the sick-leave perk will cost taxpayers nearly $3.4 billion over the
next three decades – or more than $100 million a year.
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And teachers aren’t the only public employees taking advantage of
the perk.
Over 50 percent of retired university workers have some sick-leave
credit. Nearly 70 percent of retired state workers do, too.
To be clear, the workers who benefit from sick-leave accumulation
and other perks aren’t at fault. They’re simply benefitting from
overly generous contracts that state and local politicians have
doled out to them.
But it’s also clear that perks such as sick-leave accumulation have
made pension benefits too unrealistic for state workers to count on
and too rich for taxpayers to keep paying for.
To fix this, lawmakers should end accumulated sick leave as a
subject of collective bargaining.
Teachers should have sick leave on a use-it-or-lose-it basis, as it
exists in the private sector.
Instead of tax hikes, reform pension sweeteners
Accumulated sick leave is just one of the many perks that spike the
costs of public-sector pensions for which taxpayers must pay.
Other perks include automatic end-of-career salary spikes, automatic
pay raises for various levels of education, and other increases that
pay public-sector employees more just for showing up from one year
to the next.
Yet Illinois politicians wedded to the status quo would rather hike
taxes on struggling Illinoisans than end any of those perks.
Illinoisans are already suffering under one of the nation’s worst
business climates, a shrinking population, the highest unemployment
rate in the Midwest, collapsing manufacturing, stagnant incomes, and
the nation’s highest property taxes.
Illinois politicians should get their priorities straight. It’s just
not fair to tax people who are already squeezed when there are
billions in perks left to reform.
And it’s not just perks. There are many spending drivers politicians
should reform before even mentioning tax hikes.
The Illinois Policy Institute has laid out a framework, Budget
Solutions 2018, for politicians so they can solve Illinois’ budget
crisis without hurting Illinoisans with more tax hikes.
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