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Madigan open to discussing cuts in state pensions

Updated: September 24, 2012 6:25AM

SPRINGFIELD — The top House Democrat delivered potentially sobering news Tuesday to the state workforce, saying for the first time publicly that he’s open to a discussion about scaling back existing state workers’ pensions thought to be sacred under Illinois’ Constitution.

The comments by House Speaker Michael Madigan (D-Chicago) set the stage for a contentious spring showdown in the Legislature with the state’s largest public-employee unions, who have vowed to go to the mat to protect retirement benefits for tens of thousands of existing government workers.

“I think we will take some action on the benefit level for state workers midstream,” Madigan said during an impromptu meeting with reporters on the House floor after his legislative chamber adjourned.

Last April, the Democratic-led Legislature and Gov. Quinn raised retirement ages and lessened benefits in a major pension-giveback package that pertained only to new state hires. It was estimated the move would save the state $220 billion in future pension outlays.

Since then, with the state’s five pension systems underfunded by more than $85 billion, statehouse Democrats have faced calls for deeper pension cuts from Republicans and business leaders who want to freeze existing pension benefits for existing state workers and transition them into an all-401(k)-type retirement program like many companies offer.

“You’ve already changed it going forward,” Madigan said of the pension changes for new hires. “But now we are working on bills that would change it midstream. A state worker would be told, ‘All right, you have a state benefit package up to today. Starting tomorrow, it’s going to be a different deal.’”

Afterwards, Madigan spokesman Steve Brown cautioned not to portray his boss as “an advocate” for such an approach but that he is merely saying there “is going to be a discussion, and we’ll see where that discussion takes us.”

Brown would not divulge details of any legislative package the speaker may be considering.

Told of Madigan’s comments, a spokesman for state government’s largest public-employee union, the American Federation of County State and Municipal Employees Council 31, insisted a pension rollback involving existing workers would be unconstitutional and described the push for that as the handiwork of “some of Chicago’s corporate tycoons who have been banging the drum for what are clearly unconstitutional attacks on pension benefits of current employees.”

“These corporate CEOs are out after public service workers and retirees. There’s no secret about that. Far too many politicians are listening to them,” AFSCME spokesman Anders Lindall said. “But all the corporate money in the world can’t change the plain language of the Illinois Constitution.”

The state Constitution dictates that those enrolled in any retirement system covering state, municipal or school employees cannot see their benefits “diminished or impaired.”

The head of the Civic Federation -- a Chicago-based financial watchdog that has called for raising the retirement age, increasing employee pension contributions and reducing post-retirement cost-of-living increases for existing state workers -- characterized Madigan’s statements as “significant.”

“I’m not aware of the speaker or anybody else in a position of Democratic leadership saying they’d consider benefits for existing employees,” said Laurence Msall, the Civic Federation’s president. “This is a very positive development as the state struggles, even after the tax increase, to find ways to fund the pensions.”

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