Thursday, March 14, 2013

House approves pension changes

By Jamey Dunn and Meredith Colias

The Illinois House approved two changes to the public employee pension system, but supporters of pension reform say there is still work to be done to reach a comprehensive solution.

Over the past few weeks, the House took several test votes on various amendments that contained pension changes. Today, the chamber passed two bills and sent them over to the Senate, which is having its own debate over the constitutionality of proposals to cut benefits for state workers and retirees. A Senate committee approved two other pension bills yesterday.

The House passed House Bill 1154, which caps the amount of salary that will be considered for pension benefits. The bill would limit the amount of pensionable income to the Social Security wage base, which is $113,700 in 2013, or the employee's current salary, whichever is greater. HB 1166 also passed. The proposal would increase the retirement age for employees younger than 46. Employees from 40 to 45 would see a one-year increase, employees 35 to 39 would see a three-year increase and employees 34 and younger would see a five-year increase.

Republicans supported both measures, but House Minority Leader Tom Cross said he was concerned about the process of passing proposals individually instead of approving a comprehensive plan. “This is for all practical purposes, legislating by multiple choice. What I find troublesome about this process is that this is perhaps the biggest issue that has ever faced the ILGA from a financial perspective, and there’s no road map that’s been laid out for where we’re going,” Cross said on the House floor. “I hope that we’re not setting the stage where we’re sending a series of different bills to the Supreme Court, and not in one big package, which I think could cause a lot of mischief for this issue and this problem.” Cross voted in favor of both bills.

But Northbrook Democratic Rep. Elaine Nekritz said that the standard ways of getting legislation passed just aren’t working for pension changes. “Working this bill in a traditional way, we really have not been able to come up with a solution. I’ve served on pension task forces, and I was a member of the governor’s pensions working group last year, [I] sat through meetings with the leaders and stakeholder on this,” she said. “And all those very traditional kind of processes and the kinds of things that we actually kind of complain about here, where the leaders come together and [make] a solution and then put it on the members’ desks, those traditional processes have not worked. And so I think it really is important that we try to do something different and find out what members will support.”

Union leaders maintain that all the proposals the House is considering, and the two approved by the Senate committee yesterday, are unconstitutional. “We believe that the best approach to constitutionality is by negotiating with the stakeholders,” said John Cameron, political director for the American Federation of State Local and Municipal Employees Council 31.

Nekrtiz and Cross are co-sponsoring a comprehensive bill, HB 3441. Both of the bill’s the House passed today are components of the plan, and a House committee approved HB 3441 after today’s floor votes on the other two bills.

Nekritz played down the importance of committee votes on pension proposals before the hearing. “While the Senate has gotten those bills out of committee, I don’t know where that’s going to end up on the floor. We’ve done that numerous times in the House here, to the point where I think the pensions committee is a little tired of taking testimony on the same thing.” Nekritz said that today’s floor votes were not the hardest part of the plan to get passed. Proposed reductions to the cost of living adjustments given annually to retirees are another piece of her and Cross' plan. Such changes are controversial but would also produce the most overall savings. “I still think we have to put the whole package together in a way that hands the Supreme Court one piece of legislation to consider and hands the Senate one piece of legislation to consider.”

Nekritz said of today’s votes, “These are important milestones along the way, but they’re not the final package.”

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