Pension Reform: Mike Madigan's Last Chance for a Positive Legacy

If Speaker Madigan does nothing on pensions and fiscal reform, the history of his political career is already written: three decades of power as the State of Illinois declined.
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Mike Madigan has ruled over the Illinois House of Representatives for all but two years since 1983, and what is his legacy? Who has he served? What are his accomplishments? Answers: Nothing, no one, nada.

But perhaps Madigan does not care.

Mike Madigan -- who is nearly 70 years old -- is a second-generation, old school Chicago politician. His father was a precinct captain and a ward superintendent. Madigan himself, a bred in the bone Irish-Catholic who grew up near Midway Airport, became the youngest ward boss in Chicago under the first Mayor Daley. In 1970, Daley sent the 27-year-old Madigan down to Springfield as one of his handpicked constitutional convention delegates. He expected Madigan to protect the city's political interests. Though young, Madigan helped to accomplish the goal -- he was a disciplined, tough politician -- and he would soon rule over the Illinois House of Representatives.

But 28 years have passed since he took the reins of power, and here's what the State of Illinois has to show for the reign of Madigan: a poor business climate, a reputation for political venality and a fiscal crisis at the state level. The one constant during this three decade deterioration is Mike Madigan.

In September of this year, Illinois was named one of the states with the least favorable business climates in the country in a survey of U.S. corporate executives. The negative view of Madigan's state was generally based on high taxes, elevated commercial costs and perceived anti-business regulation.

Illinois' reputation for political purity has never been high. Since Madigan went down to Springfield, three Governors of the state have been convicted of criminal offenses. Three years ago, a local FBI special agent described Illinois in this way, "I don't have 49 other states to compare it with. But I can tell you one thing: if it isn't the most corrupt state in the United States, it's certainly one hell of a competitor." Though it would be unfair to blame Madigan for the behavior of others, it does not seem as if the political culture in Illinois has improved during his decades of leadership.

Finally, years of splurging have left Illinois in a fiscal crisis comparable to Greece, a small state known for its uncontrolled government spending and irresponsible public pension system. According to the nonpartisan Commission on Government Forecasting & Accountability, Illinois has $85 billion in pension obligations that it is currently unable to pay. The situation is so dire that the Civic Federation, a highly respected financial watchdog group, has recently advocated sending Illinois into "fiscal rehab." "Illinois' fiscal crisis has been many years in the making," said its president Laurence Msall. "It was caused by more than 30 years of pension underfunding and many years of spending unfettered by the State's shrinking revenue resources. The Civic Federation does not enjoy advocating a significant tax increase in the middle of a difficult recession. However, continuing to do nothing would be by far a worse option."

This dire situation creates an opportunity for Mike Madigan to begin developing a positive political legacy: he should embrace dramatic pension reform. Illinois Senate Bill 512, which primarily focuses on reform of the pensions for new hires, is a good start. Its passage would stabilize pension contributions, improve funding levels and gradually decrease the state's unfunded pension liability. Madigan should call the bill for a vote immediately and use all of his legislative skills to make sure that it passes. He then should dedicate his considerable deal-making acumen to structure a legislative agreement on reducing the retirement liabilities associated with all public employees, including those already retired. To do otherwise would risk letting Illinois become a failed state like Greece.

So there it is. If Speaker Madigan does nothing on pensions and fiscal reform, the history of his political career is already written: three decades of power as the State of Illinois declined. Pension reform is his last chance for a positive legacy.

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