Pension reform going nowhere in Legislature’s lame-duck session
BY DAVE MCKINNEY AND ZACH BUCHHEIT Staff Reporters January 7, 2013 10:22PM
Illinois Rep. Elaine Nekritz, D-Des Plaines argues pension legislation while testifying during a House committee hearing at the Illinois State Capitol Monday, Jan. 7, 2013, in Springfield Ill. The long-awaited plan to address Illinois' $96 billion pension problem cleared an early hurdle as the Illinois House committee approved a proposal that freezes cost-of-living increases and calls for higher employee contributions. (AP Photo/Seth Perlman)
Updated: February 9, 2013 6:32AM
SPRINGFIELD — A plan to solve Illinois’ $95 billion pension crisis appeared to be in its death throes Monday in the Illinois House as sponsors conceded they hadn’t rounded up enough votes to pass it as an adjournment clock ticked ever closer to conclusion.
A bipartisan plan passed out of a House committee Monday despite claims from government employee unions it was an “illegal” breach of the state Constitution, a stance that Senate President John Cullerton (D-Chicago) appeared to share.
Even with the 6-3 vote by the House Personnel & Pensions Committee, it was clear afterward that backers hadn’t assembled anywhere close to the 60 votes they need to get the plan out of the House in the time remaining in the lame-duck legislative session.
“Roll calls tend to be a little bit squishy, but we still have quite a ways, quite a bit of work to do,” said Rep. Elaine Nekritz (D-Northbrook), the bill’s chief House sponsor.
The inertia places Nekritz and her backers at the brink with the lame-duck legislative session winding down to a close most likely on Tuesday though possibly as late as noon Wednesday, meaning the process of drawing up a pension plan would have to start all over again and the state would risk getting beaten up anew by Wall Street bond-rating agencies.
Just a day earlier, Quinn had signaled a breakthrough, with House Speaker Michael Madigan (D-Chicago) dropping his insistence that Downstate and suburban school systems accept $2 billion in costs the state bears in paying their employees’ pensions.
But some rank-and-file city Democrats balked at Madigan’s move, because it would mean Chicago taxpayers would be on the hook for paying both Chicago teacher pensions through property taxes as well as Downstate and suburban teachers through the state income tax.
There also have been doubts that Cullerton would allow a Senate vote on the House plan, which would string supporters out on a roll call that labor unions have fought bitterly against because it would freeze cost-of-living increases for state retirees for six years, among other things.
A time when the Senate might come back Tuesday remained in flux even late into the evening Monday, with a Cullerton aide saying simply her chamber was “on standby.”
Cullerton has been pushing his own proposal dealing with only two of five state retirement systems. It would give existing government workers and Downstate and suburban teachers the choice of keeping annual cost-of-living increases or state-subsidized health care, but not both.
He had demanded a vote on that proposal in the House before he would be willing to entertain a Senate vote on anything the House might pass. But the House sponsor of his pension bill, state Rep. Kelly Burke (D-Evergreen Park), told the Chicago Sun-Times that the Senate president’s plan was “dormant” in the House.
Before Nekritz gave up on a House vote Monday, the day started with a bit of momentum as the plan that she and state Rep. Daniel Biss (D-Evanston) put together passed out of committee.
“To me, the choice is clear,” Nekritz told the committee. “The time is now to end the excuses and say yes to reform for our pension systems and to long overdue relief for our great state.”
Under the 175-page House bill, known as Senate Bill 1673, cost-of-living increases would be frozen for six years and disallowed for retirees until they reach 67.
Those retirement cost-of-living increases would be based on only the first $25,000 of a retiree’s pension; pensions would be capped at the Social Security wage base or an employee’s current salary, whichever is higher, and employee pension contributions would jump by 1 percent of their wages for two years.
The House plan, which would fully fund the pension systems in 30 years, would apply to four of the state’s five pension systems and, most significantly, would not give existing workers or retirees a choice of accepting reduced pension benefits.
Unions lined up to fight the package, arguing that it would not stand up in court because of constitutional protections against the impairment or diminishment of government pensions. But their criticism didn’t stop it from reaching the floor.
“While there’s truth to the statement the Constitution is not a suicide pact, what we have here is an all-out assault on employees,” said John Stevens, a lawyer for the We Are One Illinois labor coalition, which opposes the pension deal.
The head of the Illinois Federation of Teachers, Dan Montgomery, called the language in the pension bill “illegal.”
“You’re considering plunging ahead with an illegal plan from our point of view that we would propose violates your oath of office, does not solve state’s fiscal or pension crisis and disrespects hundreds and thousands of public servants,” Montgomery told the panel.