Wednesday, July 10, 2013

Quinn to lawmakers: No pay
until you pass pension reform

By Jamey Dunn

After threatening that there would be “consequences” if lawmakers did not pass pension reform this week, Gov. Pat Quinn used his veto pen today to cut the funding for their pay.

“Admittedly, this is a drastic measure, but I think it’s absolutely necessary to get a wake-up call to the members of the General Assembly that the people of Illinois are tired of excuses. They’re impatient with the fact that the taxpayers pay when the General Assembly doesn’t do its pension reform job,” Quinn said at a Chicago news conference today. He used a line item veto to remove the money for legislator’s pay and stipends from a budget bill.

A special committee is working to produce a compromise, and Quinn set yesterday as the deadline for that committee to produce legislation. He wanted lawmakers to vote on a bill while they were in Springfield yesterday to take up concealed carry legislation. Members of the committee say negotiations are going well. However, they are waiting on savings projections from each of the public employee pension systems so they can be sure of the impact of the changes they are considering.

“I think that the conference committee has made good progress. I don’t think that the governor’s actions today are part helpful in achieving the goal,” said Northbrook Democratic Rep. Elaine Nekrtiz, who serves on the committee. The group expects to get some of the savings projections on Friday and should have them all by next week. In the meantime, she said committee members continue to meet and work together. “The committee has not been shy about being in touch with each other seven days a week.” Nekritz said that Quinn’s move today is counterproductive because it puts the focus on the back and forth between Quinn and lawmakers instead of on the task at hand. “We’re talking about this rather than talking about pension reform.”

But Quinn said today that lawmakers continue to ignore the deadlines he sets for them and that there always seem to be excuses for not agreeing on changes to the state’s underfunded pension systems. “Over and over again, they blew through the deadlines, ignored those deadlines and didn’t put a bill on my desk. Up until now, the only ones who have had to pay when pension reform was not put on my desk by the General Assembly have been the taxpayers of Illinois,” Quinn said. “The state’s credit rating has been downgraded several times, due in part to the fact that there has been no progress on pension reform. These downgrades have led to higher interest rates when the state borrows for things like capital construction projects. They must have that alarm bell ringing in their ears, and the best way to do that is to hit them in the wallet.” Legislators’ next paychecks are scheduled for August 1. Quinn has also volunteered to forgo his own pay until he signs pension reform legislation. Quinn said that once lawmakers eat their vegetables on pension reform, they can have their paycheck desserts. “When they get their pension reform job finished, they’ll have my blessing on getting their pay.”

Because of the failure to pass pension changes, Quinn has accused lawmakers of not doing their jobs, which they take an oath to fulfill. But some lawmakers think that pension proposals that unilaterally cut employee benefits are unconstitutional. “I have voted against bills that I have felt are unconstitutional,” said Rep. Lou Lang — who voted against House Speaker Michael Madigan’s preferred proposal, Senate Bill 1. “One of the very first things you say in your oath of office is that ‘I will uphold the Constitution of the state of Illinois.’ ... We have a responsibility to fix this, but we have a responsibility to fix it credibly and constitutionally.”

Lang, a Democrat from Skokie, has put forth his own bill, which would extend the temporary income tax increase to help pay off the nearly $100 billion unfunded liability. His plan would also increase the retirement age and require employees to contribute more of their salaries to their retirement benefits. The bill has failed to gain any traction in the legislature. Lang agrees with Nekritz that the committee must know what savings any plan they propose would yield. “We can’t just pick a bunch of concepts and throw them together and say we solved the problem without knowing if we solved the problem,” he said.

Lang does not think Quinn’s move will make the process go any faster. “The issue of whether we get paid or not is not going to move to many legislators from point A to point B. I think it’s wrong. I think it’s silly. I think it’s political. But most importantly, I think it will not have the desired impact.” He said that instead of making threats and laying down punishments, Quinn should become more hands-on in the process and more specific about what he wants. Quinn has yet to present his own pension legislation and declined an invitation to appear before the conference committee this week. He instead sent his budget director, Jerry Stermer, who would not go into detail about what sort of proposals the governor would prefer. “You’re left with the impression that he’ll sign any damn bill that comes to his desk, and that’s not good government either,” Lang said. He said Quinn should treat the General Assembly, his coequal branch of government, as a partner with which to solve a problem. “He can be part of the fix, or not part of the fix. So far, he has not been part of the fix.”

Senate President John Cullerton agreed that the pay cut would not help the situation. “Lawmakers have worked hard this session. That work included passing a balanced budget, paying off hundreds of millions of dollars in old bills, cutting their own pay and numerous, serious bipartisan efforts to enact comprehensive pension reform,” Cullerton said in a written statement. “The governor’s actions today are as unproductive as yesterday’s arbitrary deadline. Responsible leaders know that unworkable demands will only delay progress.”

While many lawmakers predictably had a negative reactions the Quinn’s move, he did have some on his side. Oak Park Democratic Sen. Dan Kotowski took to Twitter with his support for Quinn’s action. “What governor in our state's history has ever volunteered to suspend his own pay? Way to lead Gov. Quinn,” he wrote.

Madigan put up no protest to Quinn’s plan. “I have been working for many months to pass real, comprehensive pension reform. During the first Democratic caucus of this General Assembly, I admonished our members that doing nothing or passing only a half measure on pension reform was not an option,” Madigan said in a written statement. “This issue must be solved in order to put Illinois on a more secure financial path. I, along with Rep. Nekritz, [House Minority] Leader [Tom] Cross and the members who supported House Amendment 1 to Senate Bill 1, have been the only lawmakers willing to take a difficult vote that would lead to solvency in our pension systems. The governor’s decision follows my efforts, and I understand his frustration. I am hopeful his strategy works.”

The General Assembly could vote to override Quinn’s veto, but Madigan would have to call the House back for that to happen. Cullerton said yesterday that he would consider overriding any budget vetoes from Quinn.

Cross had a  fairly lukewarm response to Quinn's announcement. “We’ve been committed and working on comprehensive pension reform for years. We will continue to work on a solution and to get it accomplished as soon as possible. We’ve filed bills, participated in committees and worked with both sides of the aisle. This session, we helped pass a comprehensive bill out of the House,” said a written statement from Cross’ office. “The governor’s action today is certainly not a traditional approach, but it is a strategy to come to a conclusion on pension reform. We remain committed to get the job done.”

Comptroller Judy Baar Topinka, who is responsible for cutting the state’s checks, said she is concerned about the legality of Quinn’s idea. “This morning, the governor notified my office of his intention to eliminate the salaries and stipends of members of the General Assembly,” she said in a written statement. “While I understand and appreciate the governor’s focus on pension reform, real questions have been raised about the legality of his action. Specifically, Section 11 of our state Constitution states that ‘changes in the salary of a member shall not take effect during the term for which he has been elected.’ Therefore, I have requested a legal review, which should be completed before lawmakers are scheduled to receive their next paychecks on August 1, 2013.”

Whatever the outcome, Nekritz said the committee will continue with business as usual. “My motivation to work on this issue is not tied to my paycheck. And I think I’ve demonstrated my willingness to put in the time and effort necessary to get things done,” she said. The group has agreed on a number of ideas, which they presented to the pension systems for the actuarial savings projections. Nekritz, who has been a key player on the issue for some time, sees this agreement on a framework by members of both chambers and both parties as a milestone. “It does feel different to me because we’ve never had all four caucuses agree on anything,” she said. “That is a place we’ve never been on this issue.”

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