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Unions: Pension bill forces choice ‘between harm ... or more harm’

Dan Montgomery is president Illinois FederatiTeachers.  |  Sun-Times file photo

Dan Montgomery is president of the Illinois Federation of Teachers. | Sun-Times file photo

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Updated: July 3, 2012 12:25PM

SPRINGFIELD — A House Democratic push to force state workers and retirees to either surrender their automatic 3-percent pension increases or give up their state health insurance appeared to combust Tuesday in a flame of partisan bickering and heavy union pushback.

Pension-reform legislation pushed by House Speaker Michael Madigan (D-Chicago) advanced out of a House committee but stalled when Republicans bellowed bitterly about a provision to shift teacher pension costs to Downstate and suburban school districts, and public-employee unions condemned the speaker’s bill as “immoral” and unconstitutional.

“There’s no free choice here, but a coercive dilemma where a public servant must choose between harm on the one hand or more harm on the other,” Dan Montgomery, president of the Illinois Federation of Teachers, told a House panel hearing the proposal Tuesday morning.

The legislation’s main thrust, patterned after a framework Gov. Pat Quinn put on the table last month, would encourage current and retired state workers, university and community college employees and Downstate and suburban teachers to accept less-lucrative, post-retirement pension increases of 3 percent or half of the consumer price index, whichever is less.

Those unwilling to give up their automatic 3-percent annual pension increases would have to surrender their generous, state-subsidized health-care coverage, and current employees would be barred from having future pay increases factored into the size of their pensions.

The long-awaited plan was estimated by Quinn’s administration to save up to $115 billion over the next three decades, completely righting the state’s drastically underfunded public pension systems.

Unfunded pension liabilities in the state’s five retirement systems stand at $83 billion, positioning Illinois among the most poorly funded retirement systems in the country and strangling funding for education, public safety and other government operations.

“We are on the verge of historic reform in Springfield, reform many predicted never would happen,” said state Rep. Elaine Nekritz (D-Northbrook), a lead sponsor of the legislation along with Madigan. “With this change, we can move away from being financial laughingstocks.”

But Republicans railed against the Madigan-Nekritz plan because of a gradual cost shift from the state to suburban and Downstate school systems, which for the first time would have to pay teacher and administrator pension costs instead of the state.

That “poison pill,” as critics described the provision, would increase pressure on school systems to raise property taxes or, for those districts constrained by property tax caps, make crippling cuts in the classroom — options making the pension package completely unpalatable for Downstate and suburban Republicans.

“It became clear over the last couple of days that he was going to go down a route that reminded me of the old days of Mike Madigan.  No more collaboration, no more bipartisanship.  But, this will be my way, and if you don’t like it, too bad,” said House Minority Leader Tom Cross (R-Oswego).

Cross ridiculed Madigan for justifying in a House committee that Downstate and suburban school districts need to “take responsibility” for shouldering their share of teacher pension costs, rather than leaving those costs entirely to the state.

 “Maybe you need to take responsibility, Mr. Speaker, for your actions because think about this, Mr. Speaker: For the last 40 years, you have had your fingerprints on the mess we have today. Not making pension payments?  Go find Rod Blagojevich and ask him what it was like a few years ago when he and Speaker Madigan decided not to make a pension payment,” Cross said.

But the speaker calmly swatted down his GOP critics without showing his cards in classic Madigan style, leaving his next step with the pivotal legislation unclear as a Thursday legislative adjournment deadline looms. 

“I don’t plan to issue any threats. I don’t plan to issue any kind of statements which are designed to be derogatory toward anybody,” Madigan said. “So I would simply ask everyone, let’s not get swept up in the emotion of the minute. Let’s keep our focus. Move toward good solid decisions as to how we can solve these problems.”

Despite the speaker’s call to tamp down the rhetoric, the GOP attack against Madigan ratcheted up another level when one of Cross’s lieutenants went on a profanity-laced tirade against Madigan from the House floor.

“You should be ashamed of yourselves!” Rep. Michael Bost (R-Murphysboro) screamed acidically at House Democrats during one of the loudest and most acrimonious floor speeches in recent memory. “I’m sick of it!  Every year!  We give power to one person!  It was not made that way in the Constitution!”

Late Tuesday, a top Madigan aide said the speaker did not have plans to strip out the cost-shifting provision from his legislation but would not divulge whether he would press for a House vote Wednesday, which would string out his suburban and Downstate Democratic members on a politically difficult decision.

“The supporters of the bill are still at work, lobbying the bill,” Madigan spokesman Steve Brown said.

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