Sunday, June 30, 2013

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Friday, June 28, 2013

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Thursday, June 27, 2013

Conference committee session
on pensions yields little progress

By Meredith Colias

A 10-member legislative conference committee met in Chicago today for its first public hearing in an effort to fix the state’s $97 billion underfunded pension systems.

But lawmakers hoping to move forward on a compromise between two polarizing pension plans broke little new ground as they heard testimony largely backing one plan or the other. Talks will continue in private until their next public meeting on July 3. Illinois adds an estimated $17 million per day to its pension liability.

During its spring session, the General Assembly was unable to reconcile differences between Senate Bill 1, backed by House Speaker Michael Madigan, and Senate Bill 2404, supported by Senate President John Cullerton and unions. Senate Bill 1, which passed the House, would raise retirement ages for state employees younger than 46, phase in a 2 percentage point increase in their pension contributions over two years and cap pensionable salary levels. Senate Bill 2404, which passed the Senate and is supported by public employee unions, would give retirees choices between keeping their health care benefits or their current cost of living increases. Both bills were controversial and lacked support to pass the other chamber. Opponents question whether either plan would be constitutional and stand up to a challenge in court.

Despite this, committee members said they believed there was willingness to compromise. Palatine Republican Matt Murphy said: “There’s not a lot of new ground here. It’s time to get into the room and hash this out.” Chicago Democratic Sen. Kwame Raoul told members if they allowed themselves to be “pigeonholed” into supporting just one plan or the other, “we are not going to solve this problem.”

Either way, Northbrook Democrat Rep. Elaine Nekritz, a main player in pension negotiations, said the estimates needed to be backed by hard numbers, and the state had to stick to it. "We have never adhered to actuarial science. We have always made political judgments about what [the yearly state payments] should be."


Illinois has the lowest percentage-funded pension systems in the country. The state Constitution prevents state government from slashing existing public sector pensions. Union representatives argue that teachers and other state employees should not bear the burden for the state’s failure over decades to fully fund the pensions to their required level. “These are folks that have paid their contribution when the state didn’t,” said Sean Smoot, director of the We Are One coalition of unions.

Skokie Democratic Rep. Lou Lang, who opposes Senate Bill 1, told committee members they needed to consider ways to increase revenue to reduce the liabilities, such as preventing the personal income tax rate from dropping below 5 percent as it is scheduled to do in 2015. “We have a crisis. We have to find the dollars available to pay for that crisis,” Lang said. Another suggestion he made was considering funding the systems at less than 100 percent. “If we were at 80 percent, none of us would be in this room.”

For a historical view of Illinois’ pension crisis, see “The Pension Chasm” by Charlie Wheeler from the February 2010 edition of Illinois Issues here.




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Wednesday, June 26, 2013

Same-sex marriage advocates
in Illinois see court ruling
as a boost for their cause

By Meredith Colias

With same-sex marriage legislation stalled in the Illinois House, supporters hope today’s U.S. Supreme Court rulings will aid their push to send Senate Bill 10 to the governor’s desk.

Referring to the approximate number of federal marriage benefits denied to same-sex couples under the federal Defense of Marriage Act, part of which the court nullified, Gov. Pat Quinn in a statement that House members “now have more than 1,100 new reasons to make marriage equality the law in Illinois.” In a landmark decision, the Supreme Court struck down the Defense of Marriage Act (DOMA) provision that bars legally married same-sex couples from receiving federal benefits.

Illinois legalized same-sex civil unions in 2011, but those couples would still not be able to fully access federal marriage benefits because gay marriage is not legal in the state. Twelve states and Washington, D.C., currently allow it. For same-sex couples legally married in those states, the court’s 5-4 decision rejecting DOMA’s federal definition of marriage strictly between a man and woman opens the door to benefits ranging from Social Security, health care, tax breaks, adoption procedures, bankruptcy procedures, spousal veterans’ benefits and immigration.

The court ruling was “bittersweet,” Equality Illinois CEO Bernard Cherkasov said in a prepared statement. “For anyone who doubts that civil unions in Illinois created an unacceptable second-class status, the court's ruling is a powerful message that the state House urgently needs to join the Senate and pass the freedom to marry.” The Illinois Senate passed a bill on Valentine’s Day to allow same-sex marriages, but the legislation was not called in the House during the legislature’s spring session because sponsors said they did not have the votes to pass it.

David E. Smith, executive director of the Illinois Family Institute said the court’s decision did not “understand the importance or the actual reason why there are marriage laws in the first place. Obviously, this gives proponents of same-sex marriage another talking point, to point to the federal benefits and privileges” during the legislature’s fall veto session, “if it even comes up,” he said.

In the court’s majority opinion, Justice Anthony Kennedy wrote that the specific part of the law that limited the federal definition of marriage was unconstitutional because “the avowed purpose and practical effect of the law here in question are to impose a disadvantage, a separate status, and so a stigma upon all who enter into same-sex marriages. By creating two contradictory marriage regimes within the same state, DOMA forces same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the state has found it proper to acknowledge and protect.”

Camilla Taylor, senior staff attorney for Lambda Legal, a courtroom advocacy group for gay civil rights, said the Supreme Court’s decision was “just thrilling,” and it would help make a case for same-sex marriage advocates in Illinois because the court rejected similar arguments to ban same-sex marriage in the past. “The conclusion is inescapable,” she said.

Paul Linton, a special counsel with the Thomas More Society, a public interest law firm that advocates for traditional marriage and against abortion, said he was disappointed by the decision but that because Illinois does not recognize same-sex marriages, it will not affect the state legally or court cases currently challenging the same-sex marriage ban.

Chicago Democratic Rep. Greg Harris, the sponsor of Illinois’ same-sex marriage bill, said he welcomed the court’s decision. Many same-sex marriage advocates severely criticized Harris for not calling for a vote, but Harris said he is moving forward on the issue. “It takes time and can be a long and difficult process.”

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Tuesday, June 25, 2013

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Monday, June 24, 2013

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Sunday, June 23, 2013

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Saturday, June 22, 2013

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Friday, June 21, 2013

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Thursday, June 20, 2013

Committee likely to mine old ground for pension compromise

By Jamey Dunn

On Wednesday, the Illinois Senate and House voted to hand over pension reform to a group of 10 legislators who will try to produce a compromise that can pass in both chambers. Several pension ideas have been floated in recent years, and components of those proposals will likely make their way into the committee’s recommendations.

“I think the healthy way to do this is to walk into the room and say, ‘We’ve got a lot of different things that have been Frankensteined together, and let us now examine all of them and see what we can assemble that can get 30 votes in the Senate, 60 votes in the House and achieve adequate savings to put the state on a manageable fiscal course,’” said Sen. Daniel Biss, an Evanston Democrat. Biss was chosen by Senate President John Cullerton to serve on the conference committee. He has been a key player in the efforts to pass changes to the state’s pension systems. However, Biss has been in favor of Senate Bill 1, a measure opposed by Cullerton but backed by House Speaker Michael Madigan. Supporters of SB 1 say that it creates enough savings, by reducing employee benefits, to ensure that the public employee pension systems would be stabilized for the foreseeable future. They argue that the state’s shaky fiscal situation and the nearly $100 billion unfunded liability would justify the Illinois Supreme Court granting lawmakers special powers to fix the problem, despite a constitutional protection for pension benefits.

SB 1 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. 
  •  Require employees to contribute 2 percent more of their salaries. The increased contribution would be phased in over two years. 
  • Cap pensionable salary at $109,000, the limit that is currently used for Tier Two employees. The cap would increase at the rate of one half of the Consumer Price Index that is set for urban consumers. Base the amount of pension benefits that would be eligible for cost-of-living adjustments (COLAs) on the amount of time employees worked. For each year of employment, $1,000 (or $800 for employees who receive Social Security benefits) of pension income would be eligible for a cost-of-living adjustment. For example, if an employee worked for 30 years, then $30,000 of his or her retirement benefit would see an annual COLA. Before employees reached their cap, they would receive a compounding COLA. After they reached the cap, they would get a flat annual increase. 

SB1 passed the House in early May with 62 “yes” votes, but it fell short of the 30 votes needed in the Senate. Only 16 senators voted in favor of the bill when it was called for a vote on the floor on May 30. Senate President Cullerton believes that SB 1 is unconstitutional because it does not offer employees anything in return for cutting their benefits. He worked out a compromise with the unions that would offer employees a variety of choices.

Under Cullerton's preferred bill, SB 2404:
  • Option 1 Employees would give up their current 3 percent compounded cost of living adjustment for a flat 3 percent COLA that would be delayed for three years after retirement. In exchange, the employees would receive access to retiree health care plans, and future raises would count toward their pensions. They would also have the option of enrolling in a 401(k)-like plan to supplement their pensions. 
  • Option 2 Under this option, employees would keep their compounded COLAs but would lose access to retiree health care, which is currently subsidized by the state. Their future raises would not count toward pension benefits 
  •  Option 3 Employees would keep their COLAs and access to retiree health care, but they would pay 2 percent more of their salaries to their retirement benefits. Their COLAs would be delayed for three years after retirement. 
 Employees who are retired or who had given notice of their retirement by Jan. 1, 2013, would have two options:
  • Option 1 Workers would keep the 3 percent compounded COLA but give up access to retiree health care. 
  • Option 2 They could still have access to retiree health care and a 3 percent compounded COLA, but the COLA would be frozen for two years. 
Cullerton’s other appointees to the conference committee, Aurora Democrat Linda Holmes and Chicago Democrat Kwame Raoul, seem committed to the Senate president's focus on constitutionality. “You can’t just say: ‘Oh, screw the Constitution. Let’s just proceed without it,’” Raoul during Senate floor debate of SB 2404. He said of SB 1: “It’s not constitutional just because you declare it's constitutional. You’ve got to make an argument based on the law.”

But Cullerton’s plan apparently would save far less than SB1. There is also a level of uncertainty because they savings would hinge on which choices employees made. Madigan refused to call Cullerton’s plan for a floor vote in the House despite Cullerton’s insistence that the bill had the support needed to pass in that chamber. Cullerton argues that Madigan's SB1 will save nothing if it is tossed out by the Illinois Supreme Court.

“There needs to be some consensus around what makes it constitutional and a consensus around an adequate level of savings,” says Northbrook Democratic Rep. Elaine Nekritz, who is one of the members Madigan chose to serve on the conference committee. Like Biss, Nekritz has been a point person on the issue for some time and a strong supporter of SB 1. Nekritz said the House will likely never vote on Cullerton’s proposal, but she said, “That doesn’t change the fact that we all recognize that ‘just say no’ is not going to be an active response right now.” So the key for the committee will be finding something that satisfies Cullerton’s demand that employees be offered some kind of consideration for cuts to benefits, while still saving enough money to gain the backing of those who supported SB 1 — most important of all, Madigan.

The presumption is that to reach this compromise, the committee will pull largely from legislation and concepts that have already been debated. “You can cook the soup a number of different ways, but the ingredients are pretty limited at this point,” said Kent Redfield, an emeritus professor of political science at the University of Illinois Springfield.

Biss said he knows that the final product will likely not save the $187 billion that SB 1 is expected to cut. “My view is that there’s room to give on both sides. I think that we’ll need to land in the triple digits. I think if we land in the $125[billion] to $150 billion range, that’s likely to provide the level of fiscal relief that the state needs.” Cullerton this week indicated that he might be open to a model of consideration that does not involve a choice.

A proposal from the Institute of Government and Public Affairs at the University of Illinois would swap the current 3 percent compounded annual COLA, which is the largest cost driver in the pension systems, for a COLA that is tied to inflation. Under SB 2591, which a Senate committee took testimony on this week, the COLA would be one-half of the adjusted Consumer Price Index from the previous year. That means that in times such as recent years, when inflation has been low, retirees would receive small COLAs or sometimes no COLA at all. But in years when inflation is high, retirees would get larger COLAs.

The framers of this proposal say that other factors would help to negate the cost for COLAs in high-inflation years. “Linking COLA to inflation will also reduce the cost of providing the increases during periods of low inflation. Costs would increase when inflation is high; but the impact of this higher cost is mitigated by the fact that the state’s tax base, and thus the state’s tax revenue, rises more quickly when inflation is high,” said a report on the plan from the IGPA. The authors of the report say that this change to COLAs would constitute consideration and would make their plan constitutional. “The truth is that the current COLA provision offers no protection against high inflation — which is an essential feature of any good pension system. It is for this reason that we believe that annuity increases should be linked to some measure correlated with inflation,” the report says. “In our view, it would be constitutionally permissible to reduce the expected average future increase in exchange for the valuable insurance protection that individuals would receive during periods of high inflation.”

Cullerton did not indicate he was in favor of the idea this week, but did say that the plan is something to be considered. The proposal would also require employees to contribute an additional 2 percent of their pay toward retirement benefits. The legislation has the support of the public university presidents and is intended to be coupled with a bill that would gradually shift the future costs of employee retirement benefits to the universities. SB 2591 would apply only to the State University Retirement System, but concepts from the plan could be applied to the other systems for state workers, teachers and lawmakers. Cullerton also said this week that it is possible that different changes would be made to the different systems.

Other pieces may end up in a final plan, such as a funding guarantee that would allow the systems to sue if the state does not make its required annual contribution. Both SB 1 and SB 2404 had some version of a guarantee. Some who back SB 1 have even floated the idea of the guarantee being the thing that is given as consideration in exchange for benefit reductions. However, Cullerton has not warmed to this idea in the past. Recent proposals have also called for money that is currently being used to pay off borrowing that was made to make past pension payments to be redirected to pay down the unfunded liability once the bonds are retired. That could mean an additional $1 billion annually for pensions costs.

Redfield said that even though pension changes are now in the hands of the committee, in the end it will be legislative leaders who are still calling the shots. “Certainly, in terms of the Democrats, I don’t think Cullerton and Madigan have delegated their power to negotiate to those people. They can’t cut a deal independently of their leader. I don’t think that’s going to happen,” he said. “It still comes down to the leaders, and to a certain extent it comes down to one of the [Democratic] leaders backing down from where they were a week ago.”

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Wednesday, June 19, 2013

Quinn tells committee he wants pension reform in three weeks

By Jamey Dunn with Meredith Colias contributing 

Gov. Pat Quinn set a July 9 deadline for a newly formed legislative conference committee on pension reform to produce a compromise.

 “We have to have a reasonable deadline,” Quinn said. “They don’t have an eternity to do the job. ... This is urgent. This is an emergency. We’re in a crisis in Illinois.” Quinn said he made it clear to legislative leaders today that he expects the committee to present a plan for both chambers to vote on by the second Tuesday in July.

The House and Senate today set into motion the formation of the conference committee. Such committees are tasked with working out a compromise when both chambers cannot come to an agreement on legislation. The process has not been used in recent years. But as lawmakers headed into a special session called by Quinn with no agreement to vote on, the governor requested that a conference committee take up pension changes. Quinn described the committee as the “crowbar necessary to break the gridlock” over public employee pensions, but he didn’t give a direct answer on why he thinks this new conference committee would succeed where multiple working groups have failed. “The 10 members of this conference committee, good and true, have to work in good faith and bridge the differences that the House and Senate have on this particular issue,” he said. “I think it’s important now that they reconcile and bridge the differences. There are ways to do that. We began that conversation today.”

Legislative leaders named the members to the committee. For the most part, the appointees reflect the views of those who appointed them. House Speaker Michael Madigan named Chicago Rep. Arthur Turner, Riverside Rep. Michael Zalewski and Northbrook Democrat Elaine Nekritz, who has been a key player in pension talks thus far. “I think it has the potential to be different because we’re just in a different position than we’ve been in throughout this long journey, this arduous journey,” Nekritz said. “We’re a lot further down the road than we have been in the past, and I think that there is a ... desire to come together to get a compromise. I can say that from the House’s perspective, and I believe that to be true of the Senate, as well.” House Minority Leader Tom Cross tapped Naperville Rep. Darlene Senger and Quincy Rep. Jil Tracy.

Senate Minority Leader Christine Radogno chose Palatine Sen. Matt Murphy and Bloomington Sen. Bill Brady. Senate President John Cullerton appointed Evanston Sen. Daniel Biss, Chicago Sen. Kwame Raoul and Aurora Sen. Linda Holmes. Biss, who sponsored Senate Bill 1, is the only choice that stands out as not sharing similar views on the issue as the leader who appointed him. However, Biss acknowledged today that compromise is needed, calling SB 1 “dead” and “gone.” “I think everything has to be on the table. I think we need to walk into this with the openness and flexibility that comes with not having bright red lines and not having nonstarters,” Biss said.


Members of the committee will be working to meet two demands. Madigan wants a bill that will save enough money to ensure that lawmakers will not have to make more pension cuts in the future. Cullerton wants some form of consideration — giving employees something in exchange for cuts to their benefits — which he says is necessary to make the legislation constitutional. Biss said he realizes that to meet both demands, the final bill would likely not save as much as SB 1. “I don’t come to this saying, 'Oh well, I was for Senate Bill 1, so the ultimate compromise has to save exactly $187 billion.' I don’t think that’s necessary, and I think it’s the wrong attitude to walk into the room with.”

Holmes, who was part of the talks that produced Cullerton’s SB 2404, said that coming to an agreement with the unions on the bill showed her that negotiations can be fruitful even if it seems like there is no grounds for compromise. “It was very difficult to think you could ever come up with anything you agreed on, and yet we all walked out of that room with something we could all live with. So I’m going to stay optimistic that this conference committee will be able to do some of that.”

The union coalition that backs SB 2404 was less than thrilled with the leaders’ choices in conference committee members. “The conference committee appointed today is heavily stacked against protecting retirement security for working families and seniors. Even so, our coalition will continue to do everything possible to advance SB 2404, which is fair, bipartisan and constitutional while producing substantial savings for the state,” said a statement from the We Are One Coalition.

Cullerton again today cast doubt on the committee meeting an early July deadline. He said the group should get actuarial analyses to understand the potential savings of any plan it is considering. “Sometimes it takes a long time. ... So that’s going to be potentially a delay. Plus the fact that we have such different theories between the two bills that have passed each chamber.”

But Quinn said that if lawmakers, working with the committee, cannot “come up with a solid package by the 9th, they’re not doing the job.”

The date of the special session may be driven by another factor. Some expect that Quinn will soon veto House Bill 183, a bill allowing concealed carry of firearms that passed on the last day of the spring legislative session. “We have to probably have to come back on July 8th to deal with the conceal and carry issue. So we’re going to be here, and if we have a pension resolution by then, of course we would take it up.” A federal court gave Illinois until July 9 to put a concealed carry law in place.

Cullerton said he expects Quinn to use his veto pen to rewrite the bill, something Quinn has done to place gun control measures in another gun-related bill. “I think he’s going to [use an amendatory] veto [on] the bill, requiring us to come back into session to act on that veto before July 9th.” Cullerton said he did not know how the governor might change the bill. Quinn did not acknowledge the connection, only saying that he is still reviewing the concealed carry legislation.

Cross said he thinks that the committee can meet Quinn’s deadline. “Sure it can be [done]. I mean, everybody knows the issues. There’s nothing new. We’ve had blue ribbon panels. We’ve had task forces. We’ve had summits. We’ve had back room meetings. We’ve had out-in-the-open meetings. We’ve had committee hearings. There’s nothing new here, so it can be done in the next couple weeks if people want it to be done.”

Ultimately all that lawmakers did in this special session was create yet another group, albeit with a new name, of most of the same players who have been working on the issue to continue to talk over pension reform. Skeptics say it was a way to leave town from the one-day special session without admitting defeat.

“The initial reaction [in the legislature] when Quinn suggested it was kind of eye-roll, ‘are-you-kidding' sort of thing,” said Kent Redfield, an emeritus political science professor at the University of Illinois Springfield.  “But then, I think the reason it got done was that people looked at it and said, 'If we do this, then it looks like we’re doing something. And we can present it as we came to town and we did something.’ It’s very symbolic. I think that it is basically a way to buy time and to play to the external audiences, which are editorial boards, average citizens and the bond [rating] houses.” Illinois’ credit rating was downgraded twice in the first week of June after lawmakers failed to pass pension changes in the regular session.

Cross said today’s creation of the committee was probably in part motivated by a desire for Democratic leaders to save face. However, he said time will tell if it will be a productive endeavor. “If in the next two weeks there’s a conference committee report and there’s a vote, then maybe we moved the ball forward, but I think there’s the potential to go nowhere,” he said.

Cullerton said he sees the committee as a breakthrough in the gridlock that has kept him and Madigan at odds for weeks. “Now we have a conference committee that the speaker has agreed to do rather than just insist that we keep on voting on his bill, and that’s a very positive step.”

 Committee members themselves described a guarded feeling of hope. “So one can ask: 'How optimistic are we? Is this going to work? Is this not going to work?’ I don’t know,” said Biss. “It’s always appropriate to have some skepticism. But the way to get there eventually will be for the people who so far haven’t been able to work something out to sit down and try. And I think it’s great that we’re going to try again.”

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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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Deadline extended to appeal court's concealed carry ruling

CORRECTION: Madigan's request does not change the deadline for concealed carry to go into effect. It only gives her more time for an appeal. A previous version of this article said the deadline had been extended.

The deadline for legal concealed carry of firearms in Illinois has been pushed back once more. 

The U.S. Supreme Court granted Attorney General Lisa Madigan’s request to extend the deadline. The court moved it to July 22. A federal appeals court had already extended the deadline from early June to July 9. Madigan is still considering appealing the 7th U.S. Circuit Court of Appeals’ decision that would require the state to enact concealed carry. Before the ruling, Illinois was that last state in the nation that did not allow some form of concealed carry. Gov. Pat Quinn has yet to act on a concealed carry bill approved by lawmakers on the last day of spring session.

As state officials hash out the issue, state’s attorneys in at least five of Illinois' 102 counties — Madison, Peoria, Randolph, Tazewell and White — have said they will not prosecute people for carrying weapons as long as they are legal gun owners and not breaking any other laws.

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Monday, June 17, 2013

Quinn signs fracking bill

By Jamey Dunn

Gov. Pat Quinn today signed legislation to regulate hydraulic fracturing in the state.

Hydraulic fracturing, also known as fracking, is a process used to extract oil and gas by pumping water, chemicals and sand into the ground. The water fractures a source rock, allowing gas or oil to escape and be collected. Sand is used to hold the cracks in the rock open. Chemicals are added to the water for a variety of reasons, such as disinfection, lubrication and making the water thicker to keep the sand from sinking. Large-scale fracking operations can pump hundreds of thousands, or even millions, of gallons of water into the ground. (For a detailed description of fracking and its history, see Illinois Issues May 2012.)

Senate Bill 1715 sets ground rules for the controversial practice in Illinois. The bill creates standards for drilling wells and requires water testing before and after fracking begins. If chemicals used in the process are found in water, it will be assumed that it was the fracking well operator's fault, and the operator would be required to prove otherwise. Fracking fluids will have to be stored in closed tanks instead of open pits.

Fees for permits will be $13,500 per well. Oil or gas extracted from fracking wells would be taxed at 3 percent for the first two years of the life of a well and then on a sliding scale based on production. The law offers a reduction in tax rates for operators who hire local workers.

Proponents are calling the new law, which goes into effect immediately, the strictest regulation of fracking in the nation. “This new law will unlock the potential for thousands of jobs in southern Illinois and ensure that our environment is protected,” Quinn said in a written statement. “As I said in my budget address, hydraulic fracturing is coming to Illinois with the strongest environmental regulations in the nation. It’s about jobs, and it’s about ensuring that our natural resources are protected for future generations. I applaud the many environmental advocates and representatives from government, labor and industry who worked with us to make Illinois a national model for transparency, environmental safety and economic development.”

Environmental groups were part of the negotiations that produced the bill, and many supported it, including the Illinois Sierra Club and the Illinois Environmental Council. “While our community still has concerns about the environmental impacts of this new technology, it is essential for these tough restrictions to become law to protect our communities. The environmental community looks forward to working with the governor and agencies to make sure that this bill is strongly enforced,” Jen Walling, executive director of the Illinois Environmental Council, said in a written statement. Environmental groups that backed the legislation said they would have preferred a ban on fracking. But they believed it was not politically possible, and said they wanted to ensure that strong regulations were enacted.

Environmental and community groups that opposed the bill say those that worked on it were too quick to dismiss legislation that would have banned fracking until further study about its effects on health and the environment could be conducted. They say they were shut out of the process, while lawmakers used the environmental groups that supported the bill as political cover to ignore opponents. “It’s a very sad time for Illinois. We have to fight our own government to keep our children and grandchildren safe from harm,” said Tabitha Tripp, a Union County resident and volunteer with Southern Illinoisans Against Fracturing Our Environment (SAFE).

Annette McMichael, communications director for SAFE — an all-volunteer group that sprang up to oppose fracking — says that the organization will continue its work. “We will never never never stop.” She says that the group is planning to hold a workshop this week to plan its next moves. “We also already have a legal time in place comprised of attorneys all around the country who have offered to help us pro bono.” She said SAFE will work to help residents and local governments push back against fracking in any way they can.

“It’s still a very sad day. I’m just terribly ashamed of our state government,” she said of Quinn signing the bill today. For more on the rifts that fracking negotiations caused among environmental groups and community organizers, see the upcoming environmental issue of Illinois Issues, which comes out July 1.

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Sunday, June 16, 2013

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Saturday, June 15, 2013

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Friday, June 14, 2013

Illinois still has no plan to run its own health insurance exchange

By Meredith Colias

A plan for Illinois to run its own health care exchange beginning in 2015 stalled again as the House adjourned its spring session without finalizing legislation to adopt it.

The Affordable Care Act will require individuals to obtain health insurance beginning in January 2014 or face a tax penalty. An exchange would include an online marketplace to help uninsured individuals find insurance plans they could afford or determine if they would be Medicaid-eligible. Illinois’ exchange will be run by the federal government its first year.

“The plan for 2014 is unchanged,” Peoria Democrat Sen. David Koehler said. “Our hopes were to pass the bill and to be able to set up a state-based exchange by 2015. We’ll continue to work on it.”

In a statement, a spokesman for Gov. Pat Quinn said his administration is looking forward to the legislature’s fall veto session for the next opportunity to move forward on the state’s takeover of the exchange.

“I can’t really call [Illinois] behind because [other] states are making their own choices on whether they are going to run the exchange,” said Alan Weil, executive director for National Academy for State Health Policy. “From a formal sense, it’s not too late to do it in ’15 if  the legislature came back and changed their mind. Of course, there is no reason to think they would.”

If Illinois allows the federal government to continue to run the exchange past its first year, there are concerns that the state would be giving up an opportunity to tailor some of the rules to make sure areas such as rural downstate Illinois see enough competition between providers.

Koehler has said he believes only smaller portions of the bill might be changed. Negotiations are continuing through the summer. “All parties have agreed that a state-run exchange is probably in the best interest of all of us,” Koehler said.

One notable exception is House Speaker Michael Madigan.

“It’s primarily the speaker’s fear that things are not going to go well with this, and we ought to just leave it as a federal exchange.” Koehler said. “I have not talked to him directly.”

Madigan spokesman Steve Brown told the Associated Press there was concern that the bill did not have bipartisan support to pass the House, where Democrats hold a 71 to 47 majority over Republicans. The Democrat-controlled Senate passed its version along strict party lines in May.

Willow Hill Republican Rep. David Reis said Democrats could pass the legislation if they wanted. “This is their issue. They need to put the votes on it if they want to pass it.”

Reis, the minority spokesman for the House Insurance Committtee, said many Republicans felt the issue was deeply unpopular, and there was a lot of “anxiety” with how the legislation will be implemented, including how the state will pay the costs to run the exchange into the future.

Since the House did not take up the Senate version of the bill, “maybe that’s just their avenue of saying, ‘Maybe we need to step back and look at this,’” he said.

See House Bill 3227 here.


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Thursday, June 13, 2013

GOP lawmakers propose tax breaks for college parents

By Meredith Colias

Illinois lawmakers from both political parties have taken notice as in-state tuition rates at four-year state universities have doubled in the past decade.

Concerned that these rising costs are causing more college students to leave for out-of-state schools, several House Republicans want to offer their parents tax incentives to help them stay.

In a two-part proposal filed this week, House Bill 3640, sponsored by House Republican Leader Rep. Tom Cross, would offer a yearly $1,000 tax credit to families earning up to $150,000 for the student’s in-state college costs. House Bill 3641, sponsored by Rep. Adam Brown, a Republican from Decatur, would offer a tax exemption for up to $10,000 per year for money that parents and guardians add to their child’s 529 college savings fund.

To qualify for the tax credit, a student would have to be enrolled at least part time at an in-state college or university and have tuition and fees totaling more than $1,000. Need-based students receiving grants from the Monetary Assistance Program (MAP) would not be eligible for the tax break.

As climbing tuition rates in the state see no signs of easing, universities in neighboring states such as Iowa and Missouri are actively recruiting students from Illinois.

Jacksonville Republican Rep. C.D. Davidsmeyer said he is troubled the “brain drain” will be harmful in the long-term because students may not return to Illinois to begin their careers when they graduate. “We want to make sure in this state that we keep our best and brightest here,” he said during a news conference today.

Higher education has seen steep cuts in state funding during the past decade, and colleges and universities have been forced to freeze hiring, delay maintenance and raise tuition to cope. In his proposed budget for Fiscal Year 2014, which begins in July, Gov. Pat Quinn proposed cuts to education funding of nearly 5 percent across the board, but that was averted in the legislature’s higher education budget when extra money rolled in from unexpected tax revenues.

Prioritizing higher education funding will continue to be difficult for lawmakers as the state delays payments as part of its backlog of unpaid bills, and colleges and universities face a potential cost-shift of assuming employee pensions through the State Universities Retirement System.  The MAP program also remains underfunded.

For a more comprehensive look at the roots of Illinois’ higher education woes, see this November 2011 blog post from our bureau chief, Jamey Dunn.


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Wednesday, June 12, 2013

Gridlock over public pensions appears likely to continue

By Jamey Dunn

The Illinois House and Senate appear poised for the possibility of approving dueling pension legislation yet again.

Both chambers are scheduled to return to Springfield next week for a special session on public employee pensions. Senate President John Cullerton said earlier this week that he plans to move a compromise bill that would contain a plan approved by the House but would also tack on a measure the Senate passed in case the Illinois Supreme Court agrees with Cullerton’s opinion that House Speaker Michael Madigan’s plan is unconstitutional. If the court tosses Madigan's plan, Cullerton’s bill would become the law. Cullerton said he does not know whether he will have the votes in the Senate to pass this hybrid idea, which he originally pitched months ago. And on Monday, Madigan said he would not commit to calling the combined bill in the House.

It also appears that Madigan does not plan to call a vote on the union-backed proposal that the Senate passed. Although that bill is scheduled for a House committee hearing on Tuesday, a new amendment has been added that would gut the measure and replace it with Madigan’s plan. The amendment would not take effect until next year, so it would not require a three-fifths majority and could pass with the same number of votes that it did the first time around.

Cullerton has been calling on Madigan to allow a vote on the Senate plan in the House and predicted it could pass in that chamber with enough votes for an immediate effective date. “It’s unfortunate that members of the House haven’t had the opportunity to vote on a pension bill that passed the Senate with overwhelming support,” Rikeesha Phelon, a spokeswoman for Cullerton, said in response to the new amendment. “Cullerton is still advancing the compromise bill.” Madigan previously used an amendment to swap his preferred language for Cullerton’s initial compromise bill, but the two spoke at that time, and Cullerton gave his blessing before the change.

Madigan made his thoughts on the compromise plan clear on Monday. “This is like a lot of things in the legislature. You can make it complicated if you wish, or you can keep it simple,” he told reporters in Chicago. He said he would prefer to keep it simple. “The best pension bill passed so far, and the one that does the most cost savings, is the House bill. That’s in the Senate. The governor ought to work to get that passed.” Madigan’s plan failed in the Senate on the last day of the spring session, and Cullerton said the votes just aren’t there to pass it. He said Monday that he is bringing the compromise bill forward at Quinn’s request.

Quinn has publicly supported both options in the past, and at this point, he may take any pension changes he can get. “Nobody has been fighting harder or doing more for pension reform than Gov. Quinn, and he will continue to press legislators, as he has all session, to vote for comprehensive pension reform,” Brooke Anderson, a spokeswoman for Quinn, said in a written statement. “The governor has always supported [Madigan's plan], and he has been meeting with all sides this week in pursuit of a compromise that would put comprehensive pension reform on his desk. Yesterday, the governor met with both Republican leaders, and the day before, he met with both Democrat leaders. The governor plans to meet with all four leaders this week.”

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Tuesday, June 11, 2013

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Monday, June 10, 2013

No agreement from Democratic leaders on pension changes

By Jamey Dunn

As lawmakers prepare to return to Springfield for a special session on pensions next week, Gov. Pat Quinn and Democratic legislative leaders are no closer to presenting a united front on the best way to get a bill passed.

For now, Quinn and Senate President John Cullerton are on the same page. Cullerton said today, after a meeting with Quinn and House Speaker Michael Madigan that he and the governor plan to resurrect his old proposal to approve two versions of changes to the pension system. The Senate would pass the House bill, but it would also tack on the measure the Senate passed as a plan B in case the Illinois Supreme Court agrees with Cullerton’s opinion that Madigan’s plan is unconstitutional. If the court tosses the plan A, Cullerton’s plan B, Senate Bill 2404, would become the law.

Madigan’s proposal, Senate Bill 1, would unilaterally reduce public employee retirement benefits, while Cullerton’s bill offers employees several options that essentially ask them to choose between their compounded interest rate cost-of-living adjustment or access to state subsidized health care. Madigan’s proposal would save more money, but Cullerton and others say they have serious doubts about its constitutionality. “I told the two leaders, who have known each other for 34 years— they are very close friends; they’re family friends — when they want to put something on my desk that’s their priority, they know how to do it,” Quinn told reporters after the meeting in Chicago today. “I appealed to them on behalf of the people of Illinois and the common good to work together, as they have on many occasions in the past, to put this priority on my desk.” Republican legislative leaders were not at the meeting.

Cullerton said he plans to run a bill that has both proposals in it during the special session, which is scheduled to begin on June 19. “The governor’s made it real clear what he wants us to do,” he said. The House plan failed to get the support needed to pass when it was called for a vote in the Senate on the last day of spring session. “I sponsored the bill. I voted for the bill. We didn’t have enough votes,” Cullerton said. He said he does not know if this combination plan would pass, but he said he thinks it has a better chance than the House bill standing alone. “With the backup, it makes it easier to get people to vote for it.” Cullerton’s bill had union support, which he said made it easier to get approved.

“The Madigan plan is unfair and unconstitutional, period, and tying it to other legislation is just lipstick on a pig,” Anders Lindall, spokesman for Council 31 of the American Federation of State, County and Municipal Employees union, said in an email: “The Senate’s work is done – a bipartisan supermajority passed [SB] 2404, the plan developed by the union coalition with President Cullerton, and twice rejected the Madigan bill. SB 2404 saves more than the Madigan plan and it’s designed to withstand a legal challenge. With a fair hearing for 2404 and a vote on the floor of the House, the pension issue could be put to rest in an afternoon.”

But Madigan does not seem interested in the idea of a combined bill or taking a vote on the Senate plan alone. “My preference is to keep it simple.” He said that the House bill would save the most money of any plan being considered, and Quinn and Cullerton should be lobbying senators to get it passed. “The best pension bill passed so far and the one that does the most cost savings is the House bill. That’s in the Senate. The governor ought to work to get that passed.” Madigan has refused to call the bill the Senate approved for a vote in his chamber.


While Quinn said he is going to lobby lawmakers, he placed the responsibility for getting a bill through both chambers at Madigan’s and Cullerton’s feet. “I look forward to working very hard over the next week or so to get that accomplished, working with members of the General Assembly to make it crystal clear to them that this is a key, paramount priority for the people of Illinois,” Quinn said. “My job is to sign the pension reform bill into law. Their job, Mike Madigan and John Cullerton and all the members of the General Assembly, is to pass it and put in on my desk. That’s how Democracy works. That’s what our constitution is about. They’ve got to do their job.”

But Madigan made it clear that he believes he has already done the heavy lifting in his chamber. “We didn’t have 60 votes to pass the bill until I had personal conversations with about 20 House members and persuaded them to vote for the bill.” He said that Cullerton and Quinn should take the time leading up to the session to meet individually with senators and make the case for the bill approved by the House. “We’ve been at this issue now for about three years. And what I know about this issue is, it’s very difficult and it requires good, hard work in order to pass the bill. That’s what I know, and that’s what I did.” Madigan would not say if he would take up any new plan approved in the Senate, simply repeating that he preferred to keep things “simple.”

Cullerton said, “He’s saying there’s no commitment to call the bill, but we’re going to go ahead and try to pass it.”

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Saturday, June 08, 2013

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Friday, June 07, 2013

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Thursday, June 06, 2013

After two credit downgrades in a week, Quinn calls special session

By Jamey Dunn

Gov. Pat Quinn has called a special legislative session later this month after Moody’s Investor Services made good on its threat to downgrade the state’s credit rating.

Quinn is calling for a special session starting on June 19. “Here we go again. Will two downgrades in one week be enough to convince the General Assembly that our pension crisis can't be ignored anymore? Time and time again over the past two years, I have proposed, asked and pushed members of the General Assembly to send me a comprehensive pension reform bill. Time and time again, failure to act by deadlines has resulted in the bond rating agencies lowering our credit rating, which hurts our economy, wastes taxpayer money and shortchanges the education of our children,” Quinn said in a written statement this afternoon. “Legislators and their leaders know what they need to do to return Illinois to sound financial footing.”

Today, Moody’s knocked the state’s rating for general obligation bonds down to A3 from A2 and gave the state a negative future outlook. Before the downgrade, Illinois already had the lowest rating of any state in the nation. Fitch Ratings dropped the state’s bond rating earlier this week. Both rating downgrades were spurred in part by the legislature’s failure to pass comprehensive changes to the state’s pension systems for public employees before the spring session adjourned last week. Lower bond ratings means the state may pay more interest for future borrowing.

Moody’s does not expect that a pension solution will be approved soon and doubts the General Assembly’s ability to make fiscal reforms in preparation of the scheduled roll back of the temporary income tax increase, which will begin in 2015 unless a vote is taken to stop it. “The Illinois General Assembly on May 31 concluded its session without addressing the severe pension liabilities that are the state's greatest credit challenge. Our rating now assumes the government will not take action to reduce the state's pension liabilities any time soon,” said an analysis from Moody’s. “The legislature's political paralysis to date shows not only the magnitude of Illinois' unfunded benefit liabilities but also the legal and political hurdles to legislation that would make pensions more manageable long term. Without significant reforms, substantial growth in both unfunded liabilities and in annual funding burden are likely in coming years. This trend may coincide with the expiration of most of the income tax increases the state imposed in fiscal 2011 to help cover pension costs.”

Moody’s announcement of the rating decrease was especially harsh on Illinois lawmakers. “An A3 rating, while very low for a U.S. state, is consistent with the General Assembly's inability to steer the state from a path to fiscal distress.”

Quinn’s call for special session comes with no indication that leaders have reached a compromise on pension reform. House Speaker Michael Madigan and Senate President John Cullerton fundamentally disagree on how to go about changing the pension systems for public employees. Madigan’s Senate Bill 1 was soundly rejected by the Senate during the last week of session, and the House did not take a vote on Cullerton’s SB 2404 before adjournment. Supporters of Cullerton’s plan say that model, which offers employees a choice in their benefits reduction, is constitutional. They argue that Madigan’s plan, which would unilaterally cut benefits, is not. Backers of SB 1 say Cullerton’s plan would not save enough to stabilize the pension systems, which have an estimated $100 billion unfunded liability. The House also approved a bill to gradually shift future pension costs to universities and community colleges, which the institutions agreed to. But the proposal failed in the Senate on the last day of session.

Republican legislative leaders are generally on board with Quinn’s call for a special session. “Our pension crisis is so severe that Illinois’ credit rating has been downgraded twice in one week,” House Minority Leader Tom Cross said in a prepared statement. “The sooner the Illinois General Assembly returns to Springfield to get the job done on pension reform, the better,” Senate Minority Leader Christine Radogno said she “appreciates” the call for session, but she has some reservations. “The governor did call today to tell me his intentions to call a special session. I appreciate the call — but I’m not sure what dynamics have changed in this pension reform discussion. Clearly there is a rift amongst Democrat leaders. Despite their supermajority status, they missed a prime opportunity to enact comprehensive pension reform. We hope that opportunity will still be there now that it will take a supermajority vote in each chamber to pass. Senate Republicans remain willing to work on advancing a pension reform plan that substantially solves the problem.”

When Quinn called a special session on pensions last summer, lawmakers came to the capital for one day, and no compromise pension reform plan materialized. Quinn then vowed to launch a “grassroots” campaign for pensions changes that produced an Internet ad campaign and the much-derided pension reform mascot, Squeezy the pension python. 

Democratic legislative leaders had less to say about the announcement. “The Senate president’s office is notifying members of the governor’s request to return to Springfield on June 19th,” said a statement from Senate President John Cullerton’s office. “Moody’s provides more damning evidence that we can’t afford a continual stalemate on pensions. It’s time to identify a reasonable compromise that can pass both chambers with a three-fifths vote.” Madigan spokesman Steve Brown said he has seen nothing that points to a new development on pensions. Madigan did not attend a meeting on pensions held by Quinn earlier this week. “The House will convene,” Brown said. “The House has passed two pretty decent bills: one that has pretty significant [pension] saving and one that ends the free lunch [of the state picking up pension costs for schools].” He said that it would be unlikely that the House would consider legislation that “does anything less” than the bills the chamber has already passed.

Union officials are pushing for Cullerton’s bill. “Moody's rating downgrade makes clear that the House of Representatives must act swiftly to finish the work of sound pension reform the Senate has initiated. Moody's has concerns over ‘legal and political hurdles’ and calls for a ‘credible, comprehensive long-term pension funding plan’ to be implemented. They have laid out the path that should be followed, and it clearly leads to SB 2404. SB 2404 is the only legal, comprehensive, and responsible pension funding solution. It will restore fiscal stability and solvency to the state’s pension systems,” said a statement from the We Are One Coalition.

During the special session, lawmakers may also address concealed carry legislation if Quinn decides to veto House Bill 183, which was approved last week. It is possible the governor would use his veto pen to write in gun control measures that were not passed, such as a high-capacity magazine ban or a ban on assault weapons. Legislators would likely vote to override such a veto.  And of course, as happens with any special session, the specters of a host of issues that did not pass during the regular session will likely be raised. Keep an eye out for a renewed push for the legalization of same-sex marriage and a new version of a gaming expansion proposal. However, any legislation passed at this point would require a three-fifths majority in both chambers to go into effect before next year.

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Wednesday, June 05, 2013

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Tuesday, June 04, 2013

Court extends the deadline
to institute concealed carry

By Jamey Dunn

A new deadline for concealed carry of firearms has been set in Illinois, giving Gov. Pat Quinn a month to review the legislation lawmakers sent to him last week.


The state now has until July 9 to have carry legislation in place after Attorney General Lisa Madigan’s request for an extension of the court-mandated deadline was approved today. In December, a federal appeals court ruled the state’s ban on carrying firearms in public unconstitutional and gave lawmakers until June 9 to pass a law regulating carry. Both chambers of the legislature approved a bill on Friday, the last day of the spring legislative session. Madigan said Quinn needs more time to look over the bill.

“The current stay of the court’s mandate expires in less than one week, which significantly shortens the time set in the state Constitution to allow the governor to review legislation,” Madigan said in a written statement after requesting the extension. “This request for an additional 30 days would allow the governor a reasonable amount of time to fulfill his state constitutional duties. Further, if granted, this additional time would help prevent a situation in which there is no state law in place governing the carrying of handguns in public, which the court sought to avoid in setting the original stay.”

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Monday, June 03, 2013

Illinois bond rating downgraded

By Jamey Dunn

Illinois was slapped with yet another credit downgrade today after lawmakers failed to pass pension reform before the spring legislative session ended at midnight last Friday.

Fitch Ratings downgraded the state’s rating from an A to an A- with a negative future outlook. Lower credit ratings can mean that the state will have to pay more when it borrows for long-range costs, such as capital construction. Illinois had the lowest rating of any state in the nation before the downgrade. The ratings are meant to reflect the risk to investors that buy the state’s bonds by predicting the likelihood that the state will repay its debts. General obligation bonds are at the top of the list to be paid under Illinois’ budget and are paid under an “irrevocable and continuing appropriation” from year to year.

The credit rating agency lists legislators’ failure to act on pension reform as a primary cause for the downgrade. “The downgrade reflects the ongoing inability of the state to address its large and growing unfunded pension liability, most recently through the failure to pass pension reform during the regular legislative session that ended May 31, 2013,” Fitch’s report said. “Fitch believes that the burden of large unfunded pension liabilities and growing annual pension expenses is unsustainable and that failure to achieve reform measures despite the substantial focus on this topic exacerbates concern about management's willingness and ability to address the state's numerous fiscal challenges.” Moody’s Investor Services warned on Friday that it also might downgrade the state’s rating if pension reform was not passed by the end of the session.

After this most recent credit downgrade was announced, politicians from both parties pointed to it as even more reason to come to a pension solution as soon as possible. “Today’s downgrade is no surprise. As I have repeatedly made clear to the General Assembly, this will continue to happen until legislators pass a comprehensive pension reform bill and put it on my desk,” Gov. Pat Quinn said in a written statement. “Every time the General Assembly misses the deadline, Illinois’ credit rating is downgraded, which hurts our economy, wastes taxpayer dollars and shortchanges the education of our children. If I could issue an executive order to resolve the pension crisis, I would have done it a long time ago. But I cannot act alone. Legislators must send me a bill to get this job done. I plan to meet with the speaker of the House and the Senate president tomorrow. I will keep fighting for pension reform until it is the law of the land.”

But it seems that each time there is movement toward a compromise, a fundamental dispute over the best way to accomplish fair and constitutional pension reform arises. Last spring, it seemed that Republicans and Democrats were close to reaching agreement on a bill, but in the closing days of the session, Democrats unveiled a provision that would have pushed future pension costs to schools outside of Chicago. The city already covers most of its pension costs. Republicans vehemently opposed the idea, saying it would increase local property taxes, and as a result, pension talks broke down, as did hopes for a bipartisan budget plan. Democrats eventually agreed to tackle the cost shift as a separate issue to break the stalemate. 

This year it was Democratic legislative leaders who did not see eye to eye. Speaker Michael Madigan and Senate President John Cullerton each have their own proposed legislation. And in the last days of the session, neither was willing to back down off his preferred plan. Supporters of Cullerton’s proposal say that model, which offers employees a choice in their benefits reduction, is constitutional. They argue that Madigan’s plan, which would unilaterally cut benefits, is not. Backers of Madigan’s SB 1 say Cullerton’s plan would not save enough to stabilize the pension systems, which have an estimated $100 billion unfunded liability. Madigan’s legislation passed in the House but failed in the Senate. Cullerton’s bill, which is backed by public employee unions and teachers' unions, was approved in the Senate but was not called for a House vote.

Union leaders today called on Madigan to bring Cullerton’s SB 2404 up for a vote. “Today's downgrade was totally avoidable. Before it adjourned, the House could have passed Senate Bill 2404 — a fair, constitutional, comprehensive pension funding solution,” said a statement from the We Are One Coalition of unions. “The House must now finish its work and pass SB 2404 as soon as it reconvenes. House members and Illinois citizens have been demanding a vote for weeks — the time is now.” However, Quinn supports Madigan’s SB 1.

Some are using the downgrade to argue that Quinn should call a special session on pensions. However, the last time the governor tried that tactic, nothing was accomplished. If lawmakers want to pass something that can go into effect in the next year, they will need the support of three-fifths of both chambers. Otherwise they will have to wait until Jan. 1, when the legislative clock resets and pension reform could pass with a standard majority.

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Busy weekend for Illinois GOP

By Jamey Dunn

The last few days have been important for the Illinois Republican Party, as it chose a new chair and the first Republican gubernatorial candidate stepped forward.

After a closed-door meeting in Springfield on Saturday, the Republican State Central Committee choose Jack Dorgan, a lobbyist and trustee for the Village of Rosemont, to serve as state party chair. Dorgan replaces outgoing party chair Pat Brady, who resigned after conservatives complained about his pro-gay marriage stance, which runs counter to the Republicans' platform. (For more on Brady’s resignation and some of the challenges facing the party, see Illinois Issues May 2013.) “I'm excited about it. I'm a 30-year veteran of Republican politics of this state, and whether you like government or don't, it's there and it's a necessity,” Dorgan told reporters after he won the vote. Dorgan was the presumptive candidate, but he faced competition for the volunteer post that included Angel Garcia head of the Chicago Young Republicans and former Congressman Joe Walsh.

Illinois Treasurer Dan Rutherford told various media outlets last week that he plans to run for governor in 2014. However, he officially kicked off his campaign with a media tour that began on Sunday. Rutherford highlighted his ability to attract minority voters and support from voters in Chicago and the city’s suburbs. Rutherford cites these strategies as key to winning his treasurer bid in 2010. “We reached into people’s communities of diversity, whether it’s skin color or religion or cultural backgrounds, and resonated with what was important, not just to them but to everybody,” he said in Springfield. “And what I sense now is, we can win this race. I’m the only Republican looking to run for governor of Illinois that has actually won a statewide race.” He acknowledged that his party has work to do when it comes to finding supporters outside of its traditionally  Caucasian base in the state. “My Republican Party has got to do things differently. My Republican Party has got to understand and accept that the mosaic of Illinois is very diverse. And that there are people that pray to different god, and there are people that have different accents, and there people that have different skin, and there are people that have different mother countries.” “And with that being said, they have the same concerned that anyone else has, and that is about having a safe community in Chicago and elsewhere. It’s about having a job.”

Rutherford said he knows he will face a crowded primary election field, and if he survives that, a difficult general election. “We know this isn’t easy; it’s going to be a real challenge. And in my party’s primary, I know our front I’m going to be totally outspent. I understand that,” He said. “It’s going to be uphill. It’s not easy winning Illinois, as a Republican, and I know that it’s going to be a challenge. But we have the path to win, and I feel confident that we will.”

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June 3, 2013 GOPUSA ILLINOIS email is posted at www.gopillinois.com

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Saturday, June 01, 2013

June 1, 2013 GOPUSA ILLINOIS email is posted at www.gopillinois.com

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It's really about what didn't occur

By Jamey Dunn

The big stories on the last day of the spring legislative session were the things that did not get done.

Both chambers adjourned without sending to the governor’s desk Senate Bill 10, which would have legalized same-sex marriage, or comprehensive changes to public employee pensions. (For more on same-sex marriage, see this blog from Meredith Colias.) A gaming bill fell apart. (See blog here.) A bill to gradually shift future pension costs to universities and community colleges, which the institutions agreed to, could not even find enough support to pass in the Senate.

“Obviously this is a session where we have not enjoyed great success. That’s very obvious,” House Speaker Michael Madigan said during his annual end-of-session closing floor speech. “However, that does not mean that we are going to walk away from our responsibility.”

Madigan and Senate President John Cullerton each dug in behind their own legislation to change the pension systems for public employees. Madigan’s Senate Bill 1 was soundly rejected by the Senate Thursday, and the House did not take a vote on Cullerton’s SB 2404. Supporters of Cullerton’s plan say that model, which offers employees a choice in their benefits reduction, is constitutional. They argue that Madigan’s plan, which would unilaterally cut benefits, is not. Backers of SB 1 say Cullerton’s plan would not save enough to stabilize the pension systems, which have an estimated $100 billion unfunded liability.

“The state needs [pension reform], and we failed. And I’m not proud of myself,” Sen. Daniel Biss, who sponsored SB 1, said after the Senate adjourned this evening. “Here’s what could happen: We could not do anything until October, or we could sit down and talk. I feel like both options are inadequate.” Biss added: “People are going to be cynical about talks. ... They’d be fools not to be.” But he said that talks would be better than doing nothing at all.

Moody’s Investor Services issued a warning earlier Friday that if Illinois did not pass pension reform before the end of the legislative session, state government may face another credit downgrade. Illinois already has the lowest Moody’s bond rating of any state in the nation. “We shouldn’t be worried about whether or not Moody’s is going to downgrade us; we should worry about how hard they’re going to laugh at us,” said House Minority Leader Tom Cross. Cross said on the House floor that “the only thing on the financial side that we needed to do is pensions,” and it didn’t get accomplished.

Senate Minority Leader Christine Radogno said she thought some “good stuff” was accomplished this session, including a compromise on concealed carry of firearms and the passage of hydraulic fracturing regulations. “But I really believe that every positive thing is absolutely overshadowed by the catastrophic failure to accomplish pension reform,” she said.

There was plenty of finger pointing to go around once it became apparent that the General Assembly was going home well before the midnight adjournment deadline without passing a pension bill. Cross said to Madigan during his floor speech: “When you want to get something done, you always find a way to get it done.” Madigan refused to talk to reporters as he left the House floor.

“The governor is going to bring Squeezy [the pension python] out again tomorrow because you guys couldn’t figure out how to communicate with the super majority of the same party on the other side of the building,” said Palatine Democratic Sen. Matt Murphy in reference to the cartoon mascot Quinn adopted to try to bring public attention to the pension problem. “We have not seen the governor. He has not done his job,” said Rep. Jack Franks, a Democrat from Marengo. Franks said Quinn should immediately call a special session on pensions.

But the last pension special session Quinn called produced nothing but bad press. Instead, the governor has instead called for a meeting with the legislative leaders next week. “I will not stop fighting until pension reform is the law of the land. But as I said in my budget address, I cannot act alone. If I could issue an executive order to resolve the pension crisis, I would. And I would have done it a long time ago. “Today, Moody’s issued another warning to legislators that Illinois’ credit rating would soon be downgraded — again — if they did not act on pension reform. Downgrades hurt our economy, waste taxpayer money and shortchange the education of our children,” Quinn said in a written statement. “Yet every time Illinois is downgraded — legislators leave Springfield without getting the job done.”

Cullerton was less in a mood to throw stones. “It’s not because we didn’t try. There’s no blame to go around. It just people have different positions, and it’s difficult to get 30 votes on it,” he said after the Senate adjourned. “You can’t criticize the governor for not passing a bill on to the governor’s desk.”

Madigan said Thursday after his bill failed in the Senate that Cullerton had shown a “lack of leadership.” But Cullerton, whose bill is backed by public employee unions, said he could not force his members' hands. “I can’t order people to vote for bills that they clearly don’t want to vote for,” he said. He noted that the unions had lobbied heavily against Madigan’s bill.

“We applaud Senate President John Cullerton and the strong, bipartisan majority of state senators who voted for responsible, constitutional and comprehensive pension legislation — Senate Bill 2404,” the We Are One Union Coalition said in a written statement released after adjournment. “President Cullerton called House Speaker Michael Madigan's bill, which could not garner majority support in the Senate. Now the speaker should show true leadership and call SB 2404. A bipartisan majority of House members and Illinois citizens have been demanding a vote for weeks. It is the democratic thing to do.” Cullerton said he thinks his bill would have the votes in the House to pass, but a spokesman for Madigan said Thursday that he thinks there is no interest in the House for taking a vote on the bill.

For all the doom and gloom over the lack of pension legislation, Madigan ended his floor speech on a positive note. “I don’t think that we should take our lack of success today as a reason to give up.”

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Gaming talks fall apart on the final day of legislative session

By Meredith Colias 

Efforts to pass gambling legislation fell apart as the Illinois House adjourned its spring session.

Blue Island Democratic Rep. Robert Rita told reporters earlier in the week he hoped to have a bill by the last day of the session, but that did not pan out. He said more time for compromise will “be worth it if we can have a greater dialogue.”  Rita did introduce an amendment that he said he hoped would start a conversation about issues such as the tax structure for casinos and racetracks with slot machines, where revenue from gaming would go and the regulation of a proposed Chicago casino.

Senate sponsor Sen. Terry Link, a Democrat from Waukegan, said Rita was still learning the issue and may have tweaked the bill too much. “It was a ridiculous amendment in my mind,” Link said. “We should be working the agreements that we had with people.”

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Same-sex marriage isn't called for a vote in the Illinois House

By Meredith Colias

The spring legislative session ended in disappointment for gay rights advocates when the House failed to take a vote on same-sex marriage.

Illinois was poised to become the 13th state to legalize gay marriage, but it appears the measure did not yet have enough strongly committed support to pass. Gov. Pat Quinn was supportive of the legislation and pledged to sign the bill. Chicago Democratic Rep. Greg Harris, who sponsors Senate Bill 10, choked up as he told those in the galleries he was sorry he could not risk the vote. “I apologize to families who were hoping to wake up tomorrow as full and equal citizens of this state,” he said. Advocates reacted with emotion and deep disappointment as Harris took to the House floor to announce he did not want to risk the bill’s failure. Spectators in the gallery shouted out for Harris to call the bill for a vote. Equality Illinois CEO Bernard Cherkasov said the lack of a vote was “very painful and disgusting.”

Less than two years after Illinois legalized same-sex civil unions, public opinion polling indicates that residents are more supportive of granting full marriage rights, but a majority of House members apparently did not agree. A centerpiece of Equality Illinois’ push to legalize same-sex marriage was highlighting the public’s shifting stance on the issue. President Barack Obama also publicly supported the push when he made a visit to Chicago this week. “They looked at all of that and waved their hands and walked away,” Cherkasov said.

Sources familiar with negotiations estimated the vote count for months to be just under the 60 required to pass, and Harris was tight-lipped on lobbying efforts for much of that time. Harris said that he was uncertain that he had the backing to pass the bill, and he wanted to wait for a floor vote because some members said they would consider voting “yes” in the fall. Harris would not name names as to who was sitting on the fence. But lobbyists on both sides have been battling over the votes of the members of the House’s black caucus. With a potential roll call constantly shifting since the bill's passage in the Senate on Valentine's Day, it was uncertain if Harris had enough solid support to push the measure through the House. Even some lawmakers who that said they were open-minded to supporting the legislation would not publicly commit before a floor vote.

Seemingly, Illinois would be able to pass same-sex marriage without a problem because Democrats hold a veto-proof majority in the legislature. But the votes of many members of the caucus could not be  guaranteed because of the state's regional and cultural diversity. Theories on what factors were to blame for the lack of a vote followed Harris’ announcement, but he simply said he wanted to give the bill the time he hoped it needed to pass. Some lawmakers said they wanted more time to talk with their constituents before they would come back to support the bill. “I take my colleagues at their word that they shall,” he said.

Longtime gay rights advocate Rick Garcia, political director of the Civil Rights Agenda, criticized Harris for failing to share his estimated roll calls. He said community and minority groups that had a real life stake in the bill’s passage were not effectively employed, and Harris relied too heavily on House Speaker Michael Madigan to secure the vote. “That is why we lost,” he said. “This is a textbook case of how other states shouldn’t do it,” he said.

Harris’ fellow sponsor, Chicago Democrat Rep. Ken Dunkin, said the 20-member black caucus should not be blamed for the failure for a vote. He said other Democrats in the 71-member majority could have stepped up to support the legislation. He said he would still be an outspoken advocate for the bill, but he thought it may have been an a mistake for supporters to equate the ability to marry with the long struggle by African-Americans against racism and discrimination. “That may have actually offended African-American legislators, for that to be equated,” he said.

If same-sex marriage is brought back up in the legislature's fall veto session, it is not known how more time will help lobbying efforts. At least one representative, Chicago Democratic Rep. William Davis, who supported civil unions as a compromise in 2010, said he was not sure if he was ready to support full same-sex marriage rights.

The religious aspect of same-sex marriage is also underlying the debate. The bill protects religious institutions if they refuse to perform same-sex marriage ceremonies or lend their halls for receptions. Aurora Democratic Rep. Linda Chapa LaVia said she thought Harris genuinely wanted to include religious exemptions in the bill. “His intentions are not to impose this on anybody, and I take him for his word,” she said. Only one lawmaker during the Senate debate said its inclusion swayed his decision to vote for the bill.

Chicago Democratic Rep. Deborah Mell spoke of her life with her partner, whom she traveled with to Iowa to marry. She vowed the issue would reemerge. “This vote will be taken,” she said.

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