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Long way to go after pension deal

Lobbyists visitors Illinois State Capitol wait along 'Brass Rail' while lawmakers return for special sessitackle pensitax incentive legislatiTuesday Dec. 3

Lobbyists and visitors to the Illinois State Capitol wait along the "Brass Rail" while lawmakers return for a special session to tackle pension and tax incentive legislation Tuesday, Dec. 3, 2013 in Springfield Ill. (AP Photo/Seth Perlman)

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Updated: January 5, 2014 6:38AM



An eerie quiet filled the hallways of the state Capitol on Tuesday afternoon moments after lawmakers took one of the most important votes in Illinois history — to cut public employee pensions.

Was there relief and a deserved dose of pride after years of failed effort? Yes.

But joy? No.

Few legislators took pleasure in the difficult vote to scale back pensions for teachers, state workers, university employees and legislators. Plus, the honest ones know their work has only just begun.

The cost-cutting pension bill that passed is just the latest and largest step Illinois needs to take to climb out of a massive financial hole. Next up is the job of crafting an austere budget for the fiscal year that begins July 1. To be smart, that budget can’t possibly count on the roughly $1.2 billion in year-one savings promised in the pension bill.

A lawsuit challenging the constitutionality of the bill is all but guaranteed, opening the door to a protracted court battle with an uncertain outcome. Until the courts rule, Illinois should not count on a dime of savings.

When Gov. Pat Quinn was asked his intentions on that question Tuesday evening, he dodged. After an impressive showing here, Quinn — the dyed-in-the-wool, pro-labor Democrat has been a cheerleader for comprehensive pension reform for years and in June established the legislative committee that set the stage for Tuesday’s vote — has to keep up the fight for continued fiscal restraint.

There’s no sign of that pressure letting up. Under the bill, the state will be obliged to make its annual pension payments. The so-called funding guarantee will for the first time allow the retirement systems to sue if the state fails to make its annual pension payments. Drafters of the bill insist there is real wiggle room, despite what some critics say. In any given year the Legislature could vote to reduce their pension payment and the retirement systems would be able to sue only to force payment of the lower amount. But the risks over decades are real. If the pension obligations one day are not met, taxes could rise.

The Legislature also has to get cracking on passing legislation to cut pension costs for the Chicago Public Schools and city police and firefighters. Those pension systems are in even worse shape than the state’s. Lawmakers also have much work ahead to make Illinois more business-friendly and competitive, starting with an overhaul of the tax structure. The aim should be to broaden the tax base, reflecting the realities of an increasingly service-sector economy, rather than raise tax rates.

But before the to-do list gets too long, a word of congratulations.

Ninety-two Democrats and Republicans on Tuesday took a courageous and, in many quarters, a deeply unpopular vote. They did it, most of them anyway, because they believed it would help save the retirement systems from potential ruin and to slow massive cuts to education and other services that have been forced by growing pension bills. This was a true bipartisan effort, marking a significant milestone, though the majority of yes votes came from Democrats. That’s not the party that typically lines up first to hurt union members.

Tuesday’s vote would never have come to pass were it not for the hard work of the legislative pension committee that launched in June, most notably its leader Sen. Kwame Raoul and longtime proponents of pension reform, including Sen. Dan Biss and Reps. Elaine Nekritz and Darlene Senger.



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