Friday, June 01, 2012

State pension reform postponed

Jamey Dunn

Backers of state-employee pension reform couldn’t get the support they needed to pass a bill before the General Assembly's spring session was scheduled to adjourn Thursday before midnight.

The process started to show cracks on Wednesday when Republicans refused to support a bill sponsored by House Speaker Michael Madigan. Among other things, Senate Bill 1673 would have shifted pension costs to school districts, universities and community colleges over the course of several years. House Minority Leader Tom Cross said  that would result in statewide property tax increases.

Madigan handed the bill over to Cross on Wednesday night. He said moving the bill forward without the cost shift that he supported came at the request of Gov. Pat Quinn. “I think that there ought to be a shift in responsibility in the normal cost so that going forward ... the people making the spending decisions will be called upon to pay the bills. Today it’s very simple: Spending decisions are made. The bill is sent down to the Teachers Retirement System. The state pays the bill. I think that ought to change,” Madigan said when he announced he was stepping away from the bill.

“I feel like … I’m the partner or the associate that was given a huge file the night before and [told] go try this case for me,” Cross said when he presented the bill in committee Thursday morning.“Try this jury trial tomorrow, and I have not been involved in the preparation of it. I have not put the case together, the file together. But nevertheless, here we are. We will proceed as best we can in all the amount of time we have, and we’ll see how things go.”

 Madigan made it known Thursday that he would not be voting for the measure, and Cross said Quinn was unable to rally enough support among fellow Democrats. Cross said 30 Republicans were willing to vote in favor of his version of the bill, which needed 60 votes to pass.

Democrats argued that having the state pick up pension costs favored wealthier school districts with higher payrolls. The state pays more for their employees' pensions, which are based on the heftier paychecks. “Does your proposal do anything to address that inequity?” Sen. Elaine Nekritz, who served on the pension reform working group, asked Cross during the committee hearing Thursday morning.

“If you have suggestions on that…we’re certainly open to having that conversation,” Cross said.

“We did. It was the cost shift,” quipped Nekritz, a Northbrook Democrat.

When it became apparent that the House was not going to vote on SB 1673, which would have affected state, university and K-12 employees, along with legislators, the Senate approved House Bill 1447, which would reduce benefits only for state employees and members of the General Assembly. However, many senators described the vote as “symbolic” and noted that there is still work to do on pension reform. “We’re all on the same track,” said Senate Minority Leader Christine Radogno. “I very much look forward to finishing the job.”

The vote in the Senate was 30-24 with one senator, Elgin Democrat Mike Noland, voting present.

The proposed reforms to the state employee and General Assembly pension systems did not contain the controversial cost shift, and Senate President John Cullerton said he called them for a vote because they had bipartisan support. “The other two systems, there still are some very contentious issues. We don’t have an agreement on them,” he said. Neither the Senate nor the House bill would have affected judges, who have their own state pension system.

While the Senate vote was more of a gesture than a genuine effort at change, it still upset public employee unions. “We are disappointed that the Illinois Senate voted in favor of legislation that attempts to shift the lion’s share of the burden for Illinois pension debt onto employees and retirees, who have faithfully contributed their share over their working lives. We do not believe that HB 1447 represents a constitutional or fair solution to the problem of pension underfunding,” Illinois AFL-CIO President Michael Carrigan said in a prepared statement on behalf of a union coalition. Carrigan said the unions are willing to continue working with lawmakers to find a solution.

Cross said that Quinn plans to call a special legislative session to take up pension reform after lawmakers regroup and negotiate some changes. “The last couple days, I think we would all agree, have gotten a little tense around here and emotional, and some things have happened, even that, frankly, I haven’t seen in a while. But nevertheless, it got that way. Pension issues and debates create controversy and a lot of emotion … and I think we’re realizing there will never be an easy solution on pensions,” Cross said on the House floor when he announced that he would not call SB 1673 for a vote.

 Cross said those who are negotiating pension reforms may need a little time to cool off before they give it another shot. “It got really ugly the last couple days,” he said. But he warned that Quinn should not wait too long to call lawmakers back to session and that the issue should be dealt with this summer and not pushed off until after the November general election. “We’re right there. I don’t think you want to lose that.” Legislative leadership in both chambers could also call a special session.

Quinn said that he plans to meet with the leaders next week. “As I have repeatedly made clear, inaction on pension reform is not a choice. We must fundamentally reform our pension system, and we must enact bold reform that eliminates the unfunded liability. We have made great headway on stabilizing our pension system, and we are very close to a solution, but we are not there yet,” Quinn said in a prepared statement.

 Madigan said he was disappointed that pension reform did not pass but congratulated House members on their other efforts during the session, such as passing the budget for the next fiscal year and voting to end a controversial legislative scholarship program. “We’re all very disappointed that we did not resolve the pension question before the legislature. However, I think we should all recognize that there were significant accomplishments in this session,” he told House members just before adjournment.


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