Wednesday, March 23, 2016

GOP Think Tank to the Rescue

A rather odd story in the DE on Monday summarized a February report by the Illinois Policy Institute, a pro-Rauner, conservative think tank. (The think tank summarizes their own report here.)

The central claim of the report, titled "Pensions vs. Higher Education", is true but irrelevant: last year (when it was still funding universities), Illinois put a disproportionate amount of its higher education funding into pensions. This same fact means that Illinois looks like it's increased university funding over recent years: but this is simply due to the fact that the state started to catch up on long overdue pension payments to the SURS system. Universities themselves didn't see a penny of that money.

So Illinois' past failure to fund pensions doesn't tell us a damn thing about inefficiencies in the university system. Contrary to the claim by the report, the central problems faced by our universities are Springfield's fault: past underfunding of pensions, and this year's gridlock, which is bankrupting state universities.

While the basic claim of the report is bogus, it goes on to argue that administrative costs are too high at Illinois universities. It also argues that SURS pensions are too high. More on that after the break.

Administrative bloat

The report points to high salaries for chancellors and presidents, and to general trends that have increased the numbers and salaries of administrators in recent years. Those trends are a problem, but they are a national problem, as the report notes. Some Illinois universities may be more bloated than others (another Illinois Policy Institute story makes a prima facie case that this is true of Chicago State). But the report doesn't even try to make the case that Illinois universities are more bloated over all. So administrative bloat in Illinois isn't what has led Illinois universities to face a financial crisis, where most other state university systems are slowly recovering from the Great Recession: that's Springfield's fault.

I don't mean to say we shouldn't go looking to cut administrative costs, or that our administration shouldn't be publicly saying as much. I hope to take a look at our own situation at SIU to see if we are more bloated than peers. And we must address the national trend toward higher spending on administration. But it's disingenuous to blame national trends for our state crisis.

High pensions

The report takes the tried and true route of cherry-picking a few SURS retirees with really high pensions--like a oral surgeon who recently retired from UIC. Again there's no relevant comparative argument. Would this guy have done less well in another state university system? In the private sector? There are then glaringly manipulative statistics like calculating the price of a 3% COLA out over 25 years without making any corresponding calculations for inflation.

My understanding is that the State of Illinois pays SURS little or nothing more than it would pay into Social Security, were we in that system. And the last time I checked, our pensions were considerably worse than those of our peers. So no, our pensions are hardly exorbitant. Certainly something more than picking a few high-earners and posting nifty graphs based on manipulative math would be required to demonstrate as much.

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