WIUM Tristates Public Radio

Pension Reform Moves Ahead in Illinois

May 9, 2013

The Illinois Senate has approved an overhaul of the state's pension systems.  

The vote comes one week after the Illinois House approved a more severe set of benefit cuts.

The differences in those plans were at the heart of the debate.

Senate President John Cullerton (D-Chicago) negotiated this latest proposal with several labor unions.

I think we should have the best bill... We must get this done for the good of our economy.

He acknowledges his plan would save less money than the House proposal, but he says it's about as far as lawmakers can go without violating the Illinois Constitution, which says government pension benefits "shall not be diminished."

Senator Matt Murphy (R-Palatine) had a simple answer for that: to not worry about it.

"Don't get bogged down by these constitutionality arguments, because frankly we have a court for that."

Senator Kwame Raoul (D-Chicago) had a different slightly different take.

"You can't just say, 'Aw screw the Constitution, let's just proceed without it.'"

While the Senate plan would save less money than the House proposal, Democratic Senators point out that there would be zero savings from a plan that's not capable of surviving a court challenge.

The measure now goes to the House, where Speaker Mike Madigan (D-Chicago),  says he remains committed to the other pension overhaul he pushed through his chamber.

Governor Pat Quinn says the House plan is "comprehensive" and deserves a vote in the Senate.

It would require employees to pay 2% more towards retirement benefits, reduce annual cost-of-living increases for retirees and raise the retirement age for workers under 45.

Gov. Quinn says while there is time for lawmakers to decide on a plan before they adjourn for the summer, it's important for them to act sooner rather than later.

"I think we should have the best bill," says Gov. Quinn.  "I think that's what the legislature is addressing right now.  I think I've given an outline of what addresses comprehensive pension reform.  We must get this done for the good of our economy."

Illinois has nearly $100-billion in pension debt following years of state underfunding.

Meanwhile, Speaker Madigan says downstate school districts will eventually have to pay for their employees' pensions.

While presiding over a special House panel, Madigan said school districts have had a year to consider how to fund their pensions, and it’s time to move forward.

“School districts deserve support from the state government. They do get support from the state government, but this is a government that’s in a lot of trouble, and we have to call upon everybody that comes to the capitol building and asks for financial support, and that’s what we’re going to do.”

Madigan says there’s no timeline for when this might begin.

Some past plans have called for gradual phase-in over a number of years.

The Illinois Association of School Boards says it would be in favor of the so-called “cost shift” if schools could choose which state-mandated programs to fund.

It says schools could re-direct savings toward paying for pensions.