By 2029, Illinois will spend more on pensions than education

Hardworking Illinois families and entrepreneurs are just four months away from tax relief. The state’s personal income tax rate is slated to drop to 3.75 percent from 5 percent in January 2015. But a number of lawmakers and special-interest groups don’t want to let that happen. Tax-hike advocates across the state argue that Illinois needs...

Hardworking Illinois families and entrepreneurs are just four months away from tax relief. The state’s personal income tax rate is slated to drop to 3.75 percent from 5 percent in January 2015.

But a number of lawmakers and special-interest groups don’t want to let that happen.

Tax-hike advocates across the state argue that Illinois needs to pass another massive tax hike by making the current 5 percent rate permanent. They argue the money is needed for pensions, health care, the state’s unpaid bills and virtually everything else the state spends tax dollars on.

Schools and education unions also advocate for higher taxes – with warnings of what lower tax rates may mean for education.

Peoria School District 150, for example, currently faces a $12 million budget deficit, and district officials recently argued that “stagnant revenues, from property taxes and state funding, are the district’s biggest challenge.” They also warned that “if the state’s temporary income tax increase is not extended, then District 150, like school districts throughout the state, would face a mid-year financial blow.”

It’s true that local governments and school districts across Illinois are struggling – but not because taxes aren’t high enough. The real problem is out-of-control pension costs and lack of real pension reform.

Need proof? Consider the fact that more than 70 cents of every new education dollar goes to teacher retirement costs. At the rate pension costs are expected to increase, by 2029 the state will spend more on retirement costs than on aid to schools.

The problem is the state is unwilling to reform its broken pension systems – leaving money for the classroom at the whim of unpredictable and growing pension costs.

Making the tax hike permanent won’t solve the problem. In 2012 alone, 80 cents of every tax-hike dollar went to pay for pensions.

Instead of hoping for higher taxes at the state level, school districts in Illinois should be advocating for real pension reform.

The only way to protect funding for the classroom is to end the pension crisis by taking state politicians out of the retirement businesses and giving workers control and ownership over their own retirement futures.