The Illinois crisis is so severe that paying the promised pensions would require a 30-year property-tax increase that would cost the median Chicago homeowner $2,000 a year, according to a study from three economists at the Chicago Fed. Not a penny of that added tax money would pay for better schools, police, roads, hospitals or libraries. Already, Illinois’s property taxes are among the country’s highest.
The pension problems have gotten so bad because state lawmakers don’t dare to stand up to powerful government unions. Consider the legendary California Teachers Association, which collects some $240 million a year from its 325,000 members and about 28,000 nonmembers who have been forced to pay fees. The CTA is the most influential political force in Sacramento. It spent twice as much on politics from 2000-10 as the next largest donor—also a government union, the California State Council of Service Employees.
Janus will allow teachers and other government employees to stop funding the union if they oppose its political goals. Under the old Supreme Court precedent, public workers could choose not to join unions, but in 22 states—including California, Illinois and New Jersey—they were required to pay “agency fees” to cover the cost of collective bargaining, including over the pensions now swamping state budgets. Janus has freed such workers from that obligation.