Things have quieted down on the Kentucky pension reform front lately. Some may hope it is a sign the whole thing will just go away.
We understand the sentiment. But wish as one might, the issue cannot simply go away.
Gov. Matt Bevin said several days ago that he still plans to call a special session before the end of the year to take up pension reform. He believes certainty is needed prior to convening of the regular session of the General Assembly in January.
We think there is a more compelling reason. It is to stop the bleeding. Our sense of urgency is once again reinforced by the disaster we see playing out across the water in Illinois.
Illinois and Kentucky have been neck and neck in recent years for the distinction of having the nation's worst public employee pension crisis. Illinois' is worse in dollar terms but organizations like Pew Research Center have Kentucky atop the list because it has less financial capacity to deal with it.
Illinois is much farther down Disaster Road however. Consider what is happening right now at Southern Illinois University.
An article in the Sun last week describes the plan by SIU Chancellor Carlo Montemagmo to eliminate academic departments and department heads as part of what the Chicago Tribune describes as a "radical reorganization" that "eschews the customary structures of higher education."
The plan saves $2.3 million a year by eliminating department heads and putting related areas of study under the same roof. SIU presently has 42 academic departments spread within eight colleges. Montemagmo proposes to reduce the number of colleges to five and replace the 42 departments with 18 "schools" that combine similar but currently separate academic disciplines.
Montemagmo concedes that the reasons are financial. He says enrollment is in "free-fall." Freshman enrollment is down 40 percent since 2015. This reflects a statewide trend. Illinois has the second-highest rate in the nation of high school graduates leaving the state to attend college. In 2015 roughly half of Illinois graduates attending four-year colleges did so out-of-state.
This has been directly driven by the state's budget crisis, which in turn is rooted in its pension crisis. SIU has been forced to cut $50 million from its budget over the past couple of years. Finances got so bad that at one point SIU borrowed money from its sister university at Edwardsville to pay bills.
Kentucky lawmakers had better pay attention. Illinois is so overextended by its pension obligations that it is being forced to destroy higher education to pay for them.
A second lesson from Illinois is that once things deteriorate to this point, a state can never raise taxes high enough to escape the problem. Illinois has raised taxes massively. But it is losing population faster than any state in the nation as a consequence. Businesses are likewise fleeing. It's a death spiral.
Kentucky lawmakers have a choice. They can make the hard, unpopular decisions necessary to stop the pension bleeding in Kentucky now. Or they can sit back and watch Kentucky colleges experience what people here in Paducah see happening just an hour up the road in Illinois. Our hope is that legislators take the difficult but responsible path.