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State Dems agree to work on pension reform, but ready to point fingers if it fails

Michael Madigan John Cullerton

Michael Madigan, John Cullerton

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Updated: July 12, 2013 6:19AM

Illinois’ Democratic leaders agreed Monday to try to get comprehensive pension reform past a stumbling block in the state Senate on June 19, but appeared ready to blame each other if it fails again.

Senate President John Cullerton said he will seek passage of a new bill that will combine a limited pension plan his chamber already has adopted with a broader bill favored in the House. The concern is that the House bill might be unconstitutional, so the Senate provisions could serve as backup.

Gov. Pat Quinn suggested combining the bills during a private conference he called with the General Assembly’s top Democrats. No Republicans were invited to the session, which marked Quinn’s latest effort to get a pension bill on track.

Cullerton and House Speaker Michael Madigan spoke with reporters after emerging from a nearly two-hour meeting with Quinn at the Thompson Center. But the legislative leaders remained at odds with each other. Madigan made no commitment to call a revised bill in his chamber and said the House version of pension reform still reaches the furthest.

“This is like a lot of things in the Legislature,” Madigan said. “You can make it complicated if you want or you could make it simpler.” Madigan said the simple approach would be for the Senate to accept his approach to the pension problem and its unfunded liability estimated at $100 billion.

Asked if he can get the votes for House reform elements, Cullerton said, “We’ll find out.” Quinn has called a special legislative session for June 19.

Madigan said Quinn now has “one solid week where this is the only issue” and he can help lobby for votes.

One point of agreement was that any pension changes would take effect next June, not this year. That way, legislation would need only a simple majority for approval, not a three-fifths vote.

But the governor said his own support of pension reform is clear and that the onus is on lawmakers, especially Cullerton and Madigan, to act. Noting that the legislative leaders have a friendship of more than 30 years, Quinn said, “When they want to put their priorities on my desk for me to sign into law, they know how to do it.”

He called pensions “the most critical issue for the people of Illinois,” one that affects the state’s economic climate. The Legislature’s repeated failure to address pension deficits has resulted in downgrades of the state’s bond ratings accompanied by warnings of fiscal peril.

The Madigan-backed version, which the House passed but the Senate voted down with only 16 votes in late May, would end existing, compounding cost-of-living increases for retirees, hike retirement ages and increase employee premiums.

That plan, Senate Bill 1, is estimated to cut $21 billion off of the nearly $100 billion in unfunded pension liabilities that four of the state’s five retirement systems face. And over 30 years, the Madigan plan would save an estimated $187 billion in cumulative pension payments.

By contrast, the Senate-passed version that Cullerton and public-sector employee unions favor would give state retirees a series of choices in which they could keep or delay getting 3 percent, non-compounding cost-of-living increases in exchange for giving up state-subsidized health care.

The We Are One Illinois coalition of unions estimated the Senate version, Senate Bill 2404, would quickly trim between $6 billion and $9 billion off the state’s nearly $100 billion unfunded liability shortfall. It would also immediately account for up to $26 billion in reduced health-care costs for the state, the unions estimated.

Over the next three decades, it would save $46 billion in state payments for pensions and $88 billion for health care, the unions said.

Madigan also urged Senate support for a House-passed measure to end a so-called “free lunch” for state universities and community colleges and require them to start contributing to state pension plans.

One of the key unions in the We Are One Illinois bloc, AFSCME Council 31, said it would not favor the idea of pairing the two plans together so that if Madigan’s approach failed a court challenge, the Senate, union-negotiated plan would be the backup.

“There is a plan that has been developed with our union and others, and it has passed the Senate with strong bipartisan support. That’s [Senate Bill] 2404. It’s not easy for us to agree to the compromise embodied in that bill,” AFSCME spokesman Anders Lindall told the Chicago Sun-Times.

“Any changes to it will not be in keeping with that compromise. That bill should be considered and passed by the House with no changes,” Lindall said.

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