Tuesday, June 18, 2013

Madigan: Conference committee is a 'new start' on pension talks

By Jamey Dunn

After weeks of gridlock, Illinois legislative leaders plan to appoint a special committee to craft pension changes. The plans that they propose could vary across the state’s five public employee pension systems.

Gov. Pat Quinn and legislative leaders have agreed to take pension reform to a conference committee, a process used when both chambers cannot agree on a piece of legislation. Leaders in each chamber will select five members to serve on the committee. Four of the committee members will be Republicans, and six will be Democrats.

The group will then be left to hash out a proposal. If the majority of committee members agree, the plan will then go on to the full legislature for a vote. If they cannot agree, a new committee would be chosen. Conference committees are used to reconcile the differences between bills passed in both chambers. However, Senate President John Cullerton and House Speaker Michael Madigan say everything is on the table for this committee. The members could pull from previous pension reform proposals and come up with new ideas. After hearing testimony from several public university presidents on a proposal that would only apply to university employees, Cullerton said he was open to changes that would be tailored to each system. “You could even have different solutions for different systems,” he said.

The university proposal, which was created by the University of Illinois' Institute of Government and Public Affairs, would require a larger contribution from employees and would tie cost-of-living increases to one-half the rate of inflation. But Cullerton said Senate Bill 2591 is not necessarily a clear model for the final product the committee would put forth. “It’s one of the things that the conference committee would look at.” A Senate committee took testimony today on the proposal, as well as a bill that would shift future pension costs to universities and community colleges. “We’re here on pensions, so we figured we’d hear what they had to say,” Cullerton said. The Senate voted down the cost shift, which university and college officials agreed to, on the last day of regular session.

Lawmakers are back in Springfield this week after Quinn called a special session on pensions for Wednesday. Tomorrow, they are expected to take the votes needed to set the conference committee process into action.

Cullerton and Madigan reached a stalemate on pension reform at the end of the regular session. Cullerton said Madigan’s plan was unconstitutional, and Madigan said Cullerton’s proposal would not save enough money. Madigan’s measure, SB 1, failed to gain the support needed to pass in the Senate. Madigan refused to call Cullerton’s legislation, SB 2404, for a vote in the House. Last week, Quinn floated the idea of using a conference committee to break the gridlock, and Madigan and Cullerton said today that they are agreeing to the governor’s request.

Brooke Anderson, a spokeswoman for Quinn, said in an email that the committee is the first time the two leaders agreed to “a means to an end” on pension changes. “As Gov. Quinn has made clear for almost two years now, he will not approve any plan that is not comprehensive and that does not erase the unfunded liability over the next 30 years,” she said.

But neither legislative leader today was able to give a concrete reason why the committee could succeed where years of other legislative process and multiple pension working groups have failed. While it has been many years since a conference committee was held, it is certainly not unheard of in recent history.

“I was in many conference committees,” Cullerton said today. “It’s another way. There’s nothing wrong with it.”

“Obviously there’s a need for some compromise,” Madigan said.

Tension seemed to grow between Cullerton and Madigan when it became clear in the last days of session that pension reform was not going to pass both chambers. Madigan attributed the failure to a “lack of leadership” in the Senate. But today he said that reports of that statement had misrepresented his intent. “I meant that I was very disappointed and that this was a major issue that should have been addressed in a better fashion by everybody in the legislature, which is why we’re here today talking about it.” He called the conference committee “a new start.”

He added: “Let’s get good appointments to the conference committee. Let’s expect that they’ll do good work, and they’ll go in good faith and they’ll give us a good compromise.”

But Cullerton and Madigan are still not backing down from some key ideas included in both of their plans. Cullerton said today that he still believes that employees must be offered something in return for a reduction in their retirement benefits. His proposal, which has union backing, would have given them the choice between keeping cost of living adjustments with compounded interest or access to state-subsidized health care. Madigan said again today that the compounded COLAs have to go. “It’s the compounding [COLA] that’s caused the financial problems for all of these systems.”

Northbrook Rep. Elaine Nekritz, who has taken the lead for Democrats on pension legislation in the House, said, “We all know we have a clash on what constitutes constitutionality and what constitutes adequate savings, and we have to continue to try to find a way through those differences.”

Naperville Rep. Darlene Senger, who has been the key player on the issue for House Republicans and worked closely with Nekrtiz, said a conference committee could produce a solution. But she said there is a lot up in the air at this point, and she does have concerns. “How [is] this conference controlled? Who gets appointed to the committees? How long do the committees last? Where is the final say on everything? What regulations do you put in it?” she said. “None of that’s determined yet, so who knows?” Senger said she would like to serve on the committee. Both she and Nekritz are likely candidates. Anderson said that Quinn plans to call the legislature back in “early July to act upon a comprehensive pension reform plan.” Both Cullerton and Madigan indicated that the committee might not be done with its work by then.

Cullerton said the committee should not be rushed because members would need to get actuarial analysis of all the things they are considering and compare cost savings across different proposals. “That just isn’t something that you can do overnight. It usually takes weeks, so that’s going to be a little bit of a limitation.” He noted that anything the committee produces probably would not go into effect until next summer. For a proposal to take immediate effect, it would need the support of three-fifths of the members in each chamber — something that is very unlikely. “As much as we would like to do this as soon as possible, the actual effective date of the bill would be delayed,” Cullerton said.

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