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No progress on pension reform as credit agency pans state

Updated: June 6, 2012 6:12PM

SPRINGFIELD — Gov. Pat Quinn and legislative leaders didn’t appear to draw any closer Wednesday to a pension-reform deal as one top bond-rating agency issued an ominous warning over Illinois’ continued inaction toward solving its $83 billion pension crisis.

The governor and leaders met in Chicago to bear down on the one big issue that caused pension legislation to blow up last week — shifting pension costs for suburban and downstate educators and college employees away from the state.

The only news to come out of Wednesday’s closed-door talks involved plans to survey suburban and downstate school districts about their finances and abilities to shoulder more of the pension tab and to reconvene the talks sometime between June 19th and 21st.

“It was felt by many [that] the more facts we could gather regarding what the impact would be on school districts in the city and suburbs, downstate as well, it would be a very important fact we’d need to know. We’ll be gathering that with dispatch,” Quinn told reporters.

“We must do this on behalf of the people of Illinois. The people are counting on us. They don’t want stalemate. They don’t want gridlock,” the governor said.

But Republicans at Wednesday’s meeting showed no signs that they were willing to sign on to what has commonly become known as the cost-shift. The GOP fears that moving more of the pension tab to suburban and downstate school systems would trigger property-tax increases, and universities and community colleges being asked to pick up more of the pension-funding burden would simply hike tuition.

“It’s not a viable proposal,” said Patty Schuh, spokeswoman for Senate Minority Leader Christine Radogno (R-Lemont).

During his remarks, Quinn seemed to take a slap at legislation pushed by Senate President John Cullerton (D-Chicago) that would have stripped out the two pension systems caught up in the cost-shift discussion — the Teachers’ Retirement System and the State Universities Retirement System.

“I think it’s very important to understand this issue cannot be delayed. It can’t be a partial solution,” Quinn said.

Cullerton’s plan, which passed before lawmakers went home, would have applied only to the State Employees’ Retirement System and General Assembly Retirement System and required current and retired workers to accept less-generous, post-retirement cost-of-living increases in exchange for preserving access to state-subsidized health care.

The inertia that has clouded the pension-reform discussion between the governor and leaders could be a prelude to higher borrowing costs for the state.

On Wednesday, the Standard & Poor’s credit-rating agency panned the state for dropping the pension-reform ball when lawmakers concluded their spring session last Thursday, noting that the missed deadline means more votes likely will be needed to pass legislation between now and the end of the year.

“There was no action during the regular legislative session on pension reform, and we consider this negative from a credit standpoint,” the agency reported. “Given that the pension-reform legislation did not pass during this session, it will now be a much more significant challenge to implement ... requiring a three-fifths majority if addressed in a special session in 2012.”

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