Pensions vs. Higher Education
The higher-education crisis has not resulted from Illinois’ budget gridlock. Rather, skyrocketing pensions, bloated administrative costs and soaring tuition and fees for students have caused it. These are all self-inflicted wounds. To fix these problems, universities and the state will have to undertake important reforms, with the primary goal of increasing the accessibility of college for all students. To that end, Illinois’ colleges and universities must first freeze and begin to reduce the cost of tuition. They must reform their operational spending, reduce the cost of salaries and eliminate administrative bloat – then pass the resulting savings on to students. Until colleges and universities enact such reforms, the destructive circle of hiking tuition while relying increasingly on state subsidies will continue, which will make higher education less and less affordable.
The state must also do its part to fix the problems with higher education. The excessive administrative salaries and generous pension benefits that have been granted to university workers have resulted in a retirement system that is unfair and unaffordable for the taxpayers who fund it. To remedy that problem, Illinois needs to move away from its broken pension systems – starting by moving new university workers onto 401(k)-style plans. That will be easy for university employees, as such a program already exists for them today. Almost 20,000 active and inactive members of SURS already participate in a 401(k)-style plan. These state-university workers control their own retirement accounts, which aren’t part of the increasingly insolvent pension system. In addition, enacting a constitutional amendment allowing Illinois to reform pension benefits for existing workers going forward will go a long way toward fixing the self-inflicted crisis in higher education.