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Analysis: Madigan pushes pension plan; unions balk, Senate vote uncertain

Updated: June 3, 2013 3:43PM

SPRINGFIELD — There’s a political axiom at the Statehouse that embodies House Speaker Michael Madigan’s record-setting tenure as the Illinois House’s overlord: Never bet against the speaker.

And so it goes with the pension-reform package that the Southwest Side Democrat muscled out of a House committee on Wednesday — putting it on a clear track toward Gov. Pat Quinn’s desk despite anger from unions and an uncertain reception in the state Senate.

With Madigan putting his name and full weight behind this plan, an aura of inevitability on pension reform descended on the state Capitol for the first time since Quinn began noisily beating the drum on the issue shortly after taking office in 2009.

“There is an air of finality that’s attached to this,” one top Democratic insider said. “I think this probably is the ballgame.”

Madigan gutted a Senate-passed plan, written by Senate President John Cullerton (D-Chicago), that applied to only one of the state’s five retirement systems. Cullerton’s plan also adhered to a legal theory he championed that would have retirees decide for themselves whether to give up a compounding, annual 3-percent pension boost or forego state-subsidized health insurance — an approach Cullerton insisted was the only way to reel in pension costs and still be constitutional.

Madigan abandoned both concepts in his plan.

“This amendment would offer comprehensive reform to the Illinois pension systems,” Madigan told members of the House Personnel and Pensions Committee. “It would bring solvency and stability to the four [pension] systems.”

If the speaker’s authorship of the new pension bill weren’t enough, the top House Republican, Minority Leader Tom Cross (R-Oswego), signed on to Madigan’s plan Wednesday, making it a virtual lock to get out of the House when it comes up for a likely vote Thursday.

“I just got the sense in the room today that this is real,” Cross said after the committee vote. “It’s just a gut. I don’t like to predict anything in this building, but I think this is real in the House. But again, I think the million-dollar question is what happens over in the Senate.”

Traction for Madigan’s bill rests partly with his decision to re-channel his longstanding demand that Downstate and suburban school districts pick up the state’s tab for funding educators’ pensions. That provision, a nonstarter for Republicans in Springfield, isn’t in Madigan’s plan, though he said he will try to move it separately later this month.

The speaker’s measure would wipe out as much as $30 billion of the nearly $100 billion unfunded pension liability the state faces and fully fund the pension systems by 2045, though unions bashed the approach from the get-go Wednesday.

“It reminds me a little bit of the Corvair,” said Dan Montgomery, president of the Illinois Federation of Teachers, comparing Madigan’s bill to the popular 1960s automobile whose design made it a death machine. “There were things about that car, I guess, that people liked. But it was unsafe at any speed.”

As Cross said, even with bipartisan support in the House, Madigan’s plan isn’t a slam dunk in the Senate — yet.

A similar package pushed by Sen. Daniel Biss (D-Evanston) failed last month, drawing only 23 of the necessary 30 Senate votes to pass. Cullerton said he intended to vote for Madigan’s bill if it reached the Senate, just as he was one of the 23 yes votes on Biss’ bill.

But Cullerton stopped short of saying he would work a roll call to pass the Madigan rewrite or predicting whether it could reach the 30-vote threshold for passage in the Senate.

In fact, Cullerton indicated he was working on developing an alternative to Madigan’s rewrite by working with public-sector unions that have fought tooth-and-nail to keep the pension cost-of-living boost intact. He and the union leaders met privately on Wednesday.

“We’re also working on another proposal, and the speaker’s aware of that, too, which we may pass out of the Senate. We’re still working toward getting an agreement,” Cullerton told the Chicago Sun-Times.

Pressed on whether Madigan’s endorsement of a specific pension bill trumped all other ideas at the Capitol, Cullerton turned edgy.

“The fact the president of the Senate and the unions are putting their full weight behind something means something in the building, too,” he said.

With a month until the scheduled May 31 legislative adjournment, Madigan left Cullerton time to save face and eventually pivot and work the Madigan measure if a union-backed alternative doesn’t fly in the Senate.

For Quinn, Madigan’s push carries important ramifications heading into the 2014 election cycle. The governor’s inability to rally the Legislature behind a pension-reform package after repeated efforts has made him look ineffective in some quarters.

Coming up with a signature accomplishment that could be portrayed as a partial cure to the state’s massive budget problems could boost his re-election hopes, even if the speaker’s daughter, Attorney General Lisa Madigan, opts to take on Quinn in a primary.

The governor wasted no time in commending the House committee Wednesday after its vote.

Madigan, meanwhile, spent no time Wednesday publicly ruminating on the political aspects of his pension push. In a building where his words carry an almost holy significance, the speaker predicted House and Senate passage — then went so far as to presage backing from the seven-member Illinois Supreme Court, which likely will be the final arbiter of the state’s great pension debate.

“I think that there will be at least four members of the Illinois Supreme Court that will approve the bill,” Madigan told reporters while later insisting that he has had no contact with the justices.

“No, no absolutely not, and I don’t plan to. Be very clear about that. I’ve had no conversations with any member of the court concerning anything, especially this,” he said.

Madigan’s plan takes aim at the single biggest driver of the state’s pension crisis: the compounding 3-percent annual increases state retirees get. Now, it’s an automatic based on whatever annuity a retiree gets and has exceeded the rate of inflation 13 times in the past 20 years.

Madigan has recalculated that cost-of-living increase in a far less generous manner, using a template offered by Senate Minority Leader Christine Radogno (R-Lemont). A retiree would get 3 percent of an amount equal to the number of years they worked for state government, a university or Downstate and suburban school district, multiplied by $1,000.

For a retiree who worked 20 years for one of those employers and has a $35,000 annuity, for example, the current formula would give him or her $1,050. Under Madigan’s revision, the cost-of-living boost would drop to $600.

Even if Cullerton may be holding out hope for a bill that he thinks would better withstand a constitutional challenge, Madigan’s approach seemed designed to win over Senate Republicans and limit Cullerton’s options — down to using one of Radogno’s ideas.

Madigan also seemed to craft his plan with an eye toward the courts. The pension system to which judges belong, including those on the Supreme Court, wasn’t included in his rewrite.

Asked why not, Madigan said, “That’s a practical judgment that was made. No further comment.”

Radogno, however, wouldn’t predict an outcome in her chamber given Cullerton’s unwillingness to be on board yet, but she acknowledged the significant political reality of Madigan picking up the pension ball and running.

“I certainly think having the speaker put his name on it gives it a lot of momentum. No question about it,” Radogno said, before acknowledging one of Springfield’s age-old realities that may mean the pension question doesn’t get resolved fully until later this month. “You know in this business, there can be a lot of twists and turns and things we can’t anticipate.”

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