Illinois pension reform

Rich Egger

Standard & Poor's downgraded Illinois' credit rating Wednesday, citing concerns over the state's inability to address its massively underfunded employee pension plans.

The action was taken less than two weeks after a special session in which Illinois lawmakers failed to reach an agreement on changing the state pension systems. Illinois still ranks 49th among the states, better only than California.

Rich Egger

Republican Illinois State Senate candidate Randy Frese of Paloma said the state's pension problems are a sign of broken government, which he said was caused by a lack of leadership.

Frese said the pension reform program in Rhode Island could serve as a template for Illinois. He said Rhode Island raised the retirement age, froze the cost of living adjustment (COLA), and implemented a 401K style plan. Frese said the state did so long before it got into a financial hole as deep as the one in Illinois.

Rich Egger

Conservative estimates indicate Illinois is $83 billion short of what it has promised state workers in retirement benefits.  But Ralph Martire of the Center for Tax and Budget Accountability said said there is nothing inherently wrong with the state's pension plans.

He said the problem is that for 40 years the state “borrowed like a credit card” from pensions to pay for other services. But instead of acknowledging that, state leaders and lawmakers have played politics with the issue.

No pension legislation moved through the Illinois General Assembly during Friday's special legislative session.

Democrats pushed along a plan to cut pension benefits for  state elected politicians and no one else, but opponents -- including Representative Darlene Senger (R-Naperville) -- called the proposal disingenuous.

"I am not going to vote for this. I think it's a farce," said Senger.

"I think we're basically coming out and saying we're doing something and we're absolutely not, and it's a real disservice for those who live in this state."

Rich Egger

Illinois Governor Pat Quinn's office is touting a one-page analysis claiming higher education will suffer if lawmakers fail to address Illinois' pension problem.

In the so-called study, Quinn's budget office estimates that state funding of higher education will steadily decline over the next five years.

The projections show more money would be needed to pay for university and community college employees' pensions, which would leave less for schools and scholarships for needy students.

Rich Egger

Democratic Illinois Governor Pat Quinn and House Speaker Michael Madigan (D-Chicago) support a proposal to shift the pension funding burden from the state to local school districts.

But State Senator John Sullivan (D-Rushville) said there are good reasons to oppose the plan.

“It's a triple whammy for the districts,” Sullivan said. He pointed out:

1) Local districts would be burdened with the responsibility for a major expense.

2) State financial support for school districts continues to decline.

Rich Egger

Governor Pat Quinn has called lawmakers back to Springfield for a one-day special session to reform the state's pension systems.

But so far he doesn't have a plan beyond that.

"We've had proposals this year, we've had a working group this year, we've had discussions and negotiations this year," Quinn said. 

15% of the state budget in Illinois this year is going toward pensions.  That means there's less to spend on other needs.
The gap between what has Illinois promised employees they will get when they retire and what the state has set aside to pay those pensions is $83 billion.  State government would have to completely shut down for two-and-a-half years, and use all of that operating budget money on pensions, to pay off that debt.

Rich Egger

It's doubtful Illinois' pension crisis will be resolved soon.

Legislative leaders and the governor met Thursday, June 21 to discuss whether the state or local school districts should pay retirement costs for downstate and suburban teachers. The state picks up the tab now, but it doesn't pay for Chicago teachers' retirement benefits.

After the meeting, top lawmakers said they're going to spend five weeks studying school funding equality. Then they'll work on what to do about Illinois' hugely underfunded government pensions.

B-PC School Superintendent to Retire

May 17, 2012

Bushnell-Prairie City School Superintendent David Messersmith will retire a year earlier than he wanted.

Other educators around the region are facing similar decisions.

He reconsidered his plans once Governor Pat Quinn proposed a number of changes to state pensions plans including reducing benefits for retirees.  Messersmith hopes to “lock-in” his benefits under the current pension rules. He thinks the state will suffer a  “brain drain” as other educators come to the same conclusion.

Rally Protests Potential Pension Changes

May 16, 2012

A rally in Macomb's Chandler Park united public school teachers, professors and other union members. They oppose Governor Pat Quinn's proposal to change their pension plans.

Chanting “Protect Our Pensions” about 400 participants signed petitions and listened to several speakers.

John Miller, president of the University Professionals of Illinois chapter at Western Illinois University, helped organize the local rally.

Illinois lawmakers are heading into the home stretch of their 2012 session. But they still need to approve a budget before they can adjourn.

They've been working for months to try figuring out how  they can cut two of the state's biggest expenses:  pensions  and Medicaid.

Some lawmakers are not pleased with the pace.

"Well, why would you be concerned? We've got two and a half weeks left.  We've got all the time in the world to fix our problems here in the state of Illinois,” remarked Representative Joe Lyons (D-Chicago).

Longtime state employees in Illinois would no longer be able get free health insurance  when they retire under legislation (SB 1313) approved by the Illinois House on May 9.

The  vote is part of a push to cut pension benefits for government retirees.  The governor, House speaker and other politicians want to save money  by cutting pensions, health care and other costs.

State Faces Hard Choices for Budget Reform

Feb 22, 2012

In his budget address, Governor Pat Quinn, said three-quarters of Illinois'  pension burden is for people who don't work for the state. It covers some of the pension costs for teachers and others who are employees of local government bodies.

State Senator John Sullivan (D-47)  said the state must bring all the stakeholders to the negotiating table to find a long-term solution to funding pensions.