Editor’s Note: This is part two in a three-part series on Senator Jil Tracy’s remarks at the Aug. 23 Interagency Council meeting. Part one, published Aug. 24, detailed her comments on school funding issues. Part three, which will publish Saturday, is based on an interview with media after the meeting.
MACOMB — Illinois Senator Jil Tracy spoke to a full house of social service providers during the monthly Interagency Council meeting August 23.
After her opening remarks, Tracy spoke about how she became involved in the legislature and addressed the issue of school funding. She then addressed questions and comments from service providers present.
The first question was about what was being done to address the state’s pension liability.
She explained that all teachers’ pensions except the city of Chicago are paid through the state, and then there are public employees and universities. Their pension plans include cost of living increases, which were initially two percent simple interest. This increased to three percent simple interest, then to three percent compound interest.
She said the big increases weren’t coming from having to fund pensions for regular public employees or teachers, but were coming from “community colleges in Lake County or DuPage County paying six-figure (salaries). Get that, and compound it, and it adds up pretty well.”
Steps the state has taken in recent years include skipping payments and a “pension ramp,” in which pension payments increase over time on a ramp-shaped curve. She said these decisions weren’t “fiscally sound, because now we have this $100 billion unfunded pension fund.”
Health insurance for state employees also factors into the pension equation, she said. State employees who are fully vested receive free health insurance for life upon retirement, while teachers have to keep paying premiums as they did while working for their respective school districts.
Tracy described how legislators have tried to address the situation.
“First we said that we were going to ask everybody to start paying part of their health insurance,” she said. “The courts ruled that that was unconstitutional (employee benefit amounts could not be diminished)… Illinois courts said those were constitutionally protected, and you would have to pay them. So that has kind of ended that discussion.”
They next created a tiered system, where the new employees hired have a different pension funding structure than previously-hired employees – typically through lower cost-of-living adjustments or reduced benefits to the newer employees.
“A lot of people say you’re going to have a hard time hiring people and the like (with the tiered system). I haven’t experienced that. I still have people wanting jobs in corrections and state employment all the time. On the teaching side, I don’t know when you hire a teacher and they’ve gone into education that they’re looking at retirement benefits so much. I think they just wanted their first job,” she said. “So I haven’t seen the downturn of jobs. I think people are perhaps not going into education as readily because they recognize that unfortunately, they’re not some of the highest paid professions.”
Another means of addressing unfunded pensions in education is through having school districts pay their own pensions. However, full pension funding would need to be worked up to rather than implemented at once, she said.
“There have been spikes (in salary). I know lot of teachers tell me, ‘I’m getting ready to retire, and these people got all these spikes when they retired, and bumped up their retirement. And now those aren’t available.’ And I’m like, ‘Well, I think your school board has learned that it’s going to be coming on their taxing body, their district to pay eventually.’”
A similar situation applies to fire fighters and police in municipalities, she said. “At the state side, we bump up how they’re paid, and what they get. And municipalities have to pay them. We have quite a few municipalities that right now…they’re very concerned about how they’re going to pay their fire and police pensions… It’s one of those issues: Who pays? So it makes, to me, a little bit of sense that whoever’s in charge of spiking or changing the salaries, or giving the salaries, has some control over the pension part of it too, because then you’re better stewards… If you’ve got to pay it, you’re going to look at it differently.”
When asked whether the only recourse to fund the pensions was the tiered system rather than a constitutional amendment, she said changing the state constitution was still possible through a referendum vote. She added that this process was difficult, and cited a recent unsuccessful attempt to change the districting process through a referendum.
No “safety net” for
Provider Kate McGruder expressed concern that people in her organization (Regional Office of Eduction, Early Beginnings) don’t have access to the benefits or wages that some employees in the private and public sectors do. “I’m going to lose employees who go to McDonald’s, because they’re going to pay more than I can pay my employees who have a bachelor’s degree,” she said. “…I’m not a state employee. I’m not a municipality employee. So it just feels like for those of us who aren’t lucky enough to have (pensions and free healthcare), it just keeps piling up. I guess that’s one of my challenges to anybody in the legislature: We have to do something about that. That’s not okay… I don’t feel like somebody who works in the police department necessarily works any harder than the people that I have going out to homes at 3 a.m., because there’s a crisis situation, and somebody’s going to kill themselves.”
“I sit on a labor and commerce committee, and when they talk about a $15 minimum wage, I know it’s going to hit the service industry: you can’t do it,” Tracy said. “I’ve worked closely with Transitions and other mental health services. I (recently) serve(d) on the Chaddock board…and have been part of United Way, and see that you just will not be able to provide those services. I agree – the free health insurance for life — it’s not sustainable. What’s happened is, doctors won’t take state coverage now, so it hurts the people it’s supposed to be helping.”
“Part of capitalism”
Dr. Michael Illovsky, formerly of the Western Illinois University Counseling Center, asked, “I’ve heard you talk about firefighters, and police officers, and workman’s comp and teachers. I’ve also heard through the media and my social network that corporations and executives make an inordinate amount of money. Do you have any thoughts about that?”
“Well, you know, it’s part of capitalism,” Tracy said. “They answer to a board of shareholders that are publicly held. You know, it’s part of choice. I happen to live with an executive, and he’s retiring this year… His hair has gone completely white. He travels and works seven days a week. He’s chosen that path. But he’s worked very, very, very, hard. I think – I don’t know what your exact question is. Police and fire work very hard, they work shifts. But when they go into it – you know what you’re getting into, same way, unfortunately – social workers, I mean, they have to get a master’s degree… I have friends that do that, and they go into life-threatening places, just like a firefighter or policeman. So, that is part of capitalism — that certain jobs do make more, certain job expectations are more. I mean, educators work very hard, but likewise, they know what they’re getting into. So should the executive that works for a big company be paid the same as a fireman? I can’t really answer that, because if you believe in capitalism, it doesn’t really factor. You make life choices.”
“But it seems to me capitalism can, and does have a heart, and does have a sense of fairness and ethics,” Illovsky said. “I’ve worked with poor people and so forth. And it seems like there’s some kind of unfair component (…) person that’s making this – forgive me – obscene amount of money and another that’s just struggling to live.”
“Well, you know that Bill Gates makes an obscene amount of money. But look what he does with his foundations,” she said. “He gives back, and I think most of your corporations do… Corporate America does do some very good things. Look at the grants that are out there… I understand what you mean, that some things just don’t seem equitable.”
Adrian Magregor, leader of outreach services at McDonough District Hospital, said part of his job is to ensure the hospital has enough nurse practitioners, physicians and physician assistants to serve the region. He said one of the challenges the hospital is facing is the fact that less than four percent of anyone coming out of training program will consider working in towns of 50,000 or less. “We’ve got a small needle and a big haystack to begin with… There’s a lot of great regional training programs. Unfortunately, I don’t think we’re keeping as many of those folks that are in training. They’re actually making their way out of state, which is one issue.”
Another issue is being able to give potential recruits an accurate but positive “forecast” or outlook to candidates about their prospects if they stay in the state, he said. “I know if we look around us, we’re not the only Midwest state that’s really bottomed out; there’s been others. The neat thing is, they’ve been able to – in some respects – climb out of their dark places… It does affect your psyche, and you want to be able to forecast accurately to people that you’re trying to attract into the region.”
Tracy said she agreed finding quality healthcare workers was a struggle. She said she has worked on issues including malpractice, liability and tort reform to try to make Illinois more competitive with neighboring states. She said she’s also worked with helping nurse practitioners and physician’s assistants be able to serve in rural areas.
“It’s a complicated process, because you want them to work with a physician, but often they – being a family practitioner…they have abilities to function somewhat autonomous(ly) of the physician,” she said.
Tracy added that she was aware the nursing shortage was ongoing.
“It’s an excellent field, and I always encourage young people to go into those fields because they’re always going to be able to find a job.”
She also said legislators are trying to streamline the process that licenses physicians coming in from out-of-state. “If you ever have problems getting your licensing in place, let us know because I know sometimes we’ve really gotten – it’s fast-tracked to get those physicians if they’ve moved here from somewhere, so they can get their license in Illinois ready to go. It’s a struggle. How are you going to prove you’re going to be worthy down the road?… It’s something I struggle with too: how do you promise people it’s going to change and it’s going to be better?”
Reach Michelle Langhout by email at email@example.com or find her on Facebook.