Lake County Gazette

Talks between the American Federation of State, County and Municipal Employees (AFSCME) and Gov. Bruce Rauner over contract renewals have reached what Administrative Law Judge Sarah Kerley has called a partial impasse.

While both parties disagree on several important issues, both parties should return to the bargaining table, Kerley said.

Martin Blumenthal, Republican candidate for the District 58 state House seat, said AFSCME is asking for too much from Illinois.

Martin Blumenthal | Contribued photo

“AFSCME has to realize that the state is broke and cannot responsibly agree to any more raises or increases in perks,” Blumenthal told the Lake County Gazette. “There is no way to pay for these proposals, and there is no way to pay for the current obligations.”

Rauner echoed Blumenthal’s thoughts when he declared that the demands by the union, which included an increase in wages, shorter work weeks, pension benefits and health care perks, would cost taxpayers an extra $3 billion. Taxpayers are already paying $14,800 a year for AFSCME worker health care.

Blumenthal is correct about the state's economic condition. The state is expected to be $14 billion behind in its bills by the end of this fiscal year: June 30, 2017. Adding to the financial burden is the current crisis with the Teachers’ Retirement System (TRS), which has voted to lower the fund’s future investment return assumption to 7 percent from 7.5 percent, causing taxpayers to pay an additional $421 million for 2017 to make up the inevitable shortfalls in investment income.

Blumenthal, who recently participated in a luncheon with retired teachers, discussed the situation with former educators and was relieved to learn that most of them were open to the idea of reforming the pension system.

Blumenthal said current teachers already enrolled in the pension fund deserve their pension, but that the system needs to change.

“I am not in favor of changing anything for the (current) teachers,” Blumenthal said. “The Constitution does guarantee pensions in Article 8, but that has to be changed going forward. We can’t afford to do this anymore.”

Because the TRS reduced the assumed rate of return on its portfolio, Illinois could owe as much as $7.4 billion to the fund.

Blumenthal said the state has to honor the current contract

“These teachers had a contract, made a deal and shook hands on it,” Blumenthal said. “They are entitled to get what they put into to it, but going forward, it has to change.”

A change he proposed is to migrate toward a defined-contribution model, in which every individual contributes to his or her retirement.

“I think that some type of 401(k) would be good, just like it is in the private sector,” Blumenthal said. “So some kind of defined-contribution plans along those lines. We can’t afford any of these (pension) plans anymore. People have to start contributing to their own health care and pension because the people of the state can’t afford it anymore. It’s getting to be way too much, and it’s unsustainable.”

The prospects for change are exciting to Blumenthal, who has been looking forward to the November election. Blumenthal has kept busy calling voters, attending fundraisers, placing ads on Google and Facebook, and talking with both Republicans and Democrats.

Blumenthal said he considers it a victory when Democrats are open and engaged with him in discussions.