Illinois Teacher Pension Plan Shift Could Save State Money, Cripple Downstate Schools

A report released last week by the Illinois Policy Institute includes findings that seem to support Gov. Pat Quinn's suggestions that schools should be responsible for funding teacher pensions.

As part of a larger effort to ease the state's already overextended budget, Quinn has been targeting state payouts to Illinois schools to cover teacher pensions, proposing initiatives that would cut costs and delay retirement or pass the bill along to schools.

A recent study by the Illinois Policy Institute supports the latter measure.

"State education dollars will continue to work at cross-purposes until the state stops paying the employer's share of the normal cost of teachers' pensions," the report concludes. Analysis found that in 2011, the state paid approximately $800 million towards pension benefits earned by teachers during the 2010-11 school year, while school districts paid only $50 million.

Holding schools accountable for teacher pensions isn't a new idea: school districts in New York pay the entire employer pension cost, and in California they pay a majority, according to the Illinois Policy Institute. Chicago Public Schools already pays the employer share of teacher pension costs.

But Illinois schools outside of Chicago say absorbing pension costs could put an undue burden on their already strained budgets.

The Quincy Journal reports that the Quincy Public School District currently has 437 retired teachers and administrators receiving pensions, 100 of which receive more than $60,000 a year. That top 100 alone would cost the district more than $6 million annually, 8 percent of the district's $73.2 million budget.

The pension system in Illinois asks public school teachers to pay almost 9.5 percent of their paychecks into the Teachers Retirement System. But in two-thirds of all school districts in the state, teachers pay significantly less, and some don't contribute at all, according to the report.

"Schools outside of Chicago are getting a free ride on the backs of taxpayers by having the state pay for their pensions," Illinois Public Policy Institute's John Tillman told ABC Chicago. Tillman says the proposed change would only increase costs by 1 to 4 percent in some cases, while 57 percent of the districts will save money.