(Spring) Break From Pensions

Pension proposals darted across the statehouse last week.  But teachers, as well as  state and university workers, worried about what legislators will do to their retirement benefits can rest easy that there will be no major action this week.  The General Assembly is on its spring break.  Amanda Vinicky takes the opportunity to examine where things stand.

House Republican Leader Tom Cross and Rep. Darlene Senger (R-Naperville) hold a press conference after the House last Wednesday passed a cap on cost of living adjustments to pensions.

House Republican Leader Tom Cross and Rep. Darlene Senger (R-Naperville) hold a press conference after the House last Wednesday passed a cap on cost of living adjustments to pensions.

Remember as a kid the giddy, made-you-want-to-cheer-out-loud feeling you got when school was about to let out?

That’s how excited members of the Illinois House sounded when problems with the voting system put an early end to Friday’s session:

CLERK: “Members, due to technology issues, we’re going to adjourn for the rest of the evening.”     MEMBERS: “YEAH!”

That did come after a relatively long and busy week in Springfield.

A week that included action on pension legislation that may – or may not – become part of a final product.

The Governor and all four of the General Assembly’s top leaders say they’re committed to doing something about Illinois’ pension systems, which are in debt by almost $100 billion dollars.  As more of the state’s money goes to pay down that debt, there’s less to spend on things like education, health care, state parks and police.

And suggestions on what to do about it are bouncing around the capitol like ping pong balls.

The House and Senate have each hit a ball, or two – or three – over to the opposite chamber.

But those that make it over the net once have yet to be returned, in what’s becoming a House/Senate showdown.

Let’s start in the Senate, with President John Cullerton.

CULLERTON: “We’ve reached a crossroads.  We’ve had enough debate on these issues.  Now is the time to pass a bill.”

The plan Cullerton most wants to become law is backed by a specific legal theory.

On top of the pressure from powerful unions who say it’s unfair to reduce pensions employees worked hard to earn, the state constitution says pension benefits can’t be diminished or impaired.

Cullerton’s mindset is the way to get around it is to have workers break that contract.

His plan effectively forces their hand — employees would get a choice: keep their current, better, and more expensive pension plan; or maintain access to state-backed healthcare upon retirement.  But you can’t have both.

It took two tries, but Cullerton ushered a version of his plan through the Senate. It was watered down and ONLY applies to teacher.  The Senate President claimed victory – but admitted he couldn’t work up enough votes to pass a measure that would force that same choice upon state employees, as well as university workers and legislators themselves.

CULLERTON: “Well, we have to be patient because we have to eventually have to pass the bill.  It’s very difficult and complicated.  You can see it’s people voting no in both chambers, people on both sides of the aisle, people have different views in different chambers.  So we just have to keep on working and trying to get a consensus.  Which is what I did today.”

Still, that Cullerton had such a hard time scraping up enough votes may be telling.

And so far his theory has gained no traction in the Illinois House.

There, legislators for weeks have been taking votes on bits and pieces of the  Illinois’ pension code.

The outcome’s recapped here by House Speaker Michael Madigan:

MADIGAN: “This chamber has already passed two bills that deal with the problem.  We’ve passed a bill which put a cap on the pensionable income of $113,000.  that bill is in the Senate.  We’ve already passed a bill that raised the retirement age incrementally.  That bill is in the Senate.”

Now a third idea has surfaced, passed the House and is awaiting Senate action.  It cuts the cost of living adjustment to retirement  checks.  COLAs, as they are called, would only be calculated on the first $25 thousand dollars of a pension.  After that, retirees would get a lump sum of money — $750 every year.

House Republican Leader Tom Cross says it’s most significant of all.

CROSS: “The reality is, this was the toughest vote you’re going to face in this issue.”

It’s significant for two reasons.  As Representative Elaine Nekritz, who’s leading House Democrats’ negotiations on pensions – explains – COLAs are Illinois’ biggest pension cost.  And that means cutting them will save Illinois the biggest chunk of money.

NEKRITZ: “This single benefit is the most expensive, single component of the pension benefits and the systems have indicated this single benefit is 20% of the overall cost of the benefit.  So if we are to bring the cost of our pension system, and bring down the annual increases, the trajectory on which our annual increases on the pension payment are headed, this is the place that we have to look.”

But it’s also significant because by most accounts, cutting pension COLAs is the most controversial.

It’s the first time the House has approved such a major change.  And it proves that it can be done.

That’s not to say it’s a done deal.

House Speaker Madigan indicated the House may soon put together a comprehensive package – with all of those various elements — and try to get THAT through the House, then lob it over to the Senate.

There’s a chance that if it that happens, the Senate would feel enough pressure to pass it.

But just as the House hasn’t taken any interest in Senate President Cullerton’s constitutional stance, Cullerton hasn’t shown any sign of backing down from it.

And  – here’s where the legislative ping pong game gets complicated – the Senate already rejected a comprehensive package with elements of those measures approved by the House.

Getting away from all that may be why legislators were so excited to begin their spring break – but there’s PLENTY to be done – on pensions and otherwise – when they return.

– Amanda Vinicky

Bills: SB1, SB35, HB1165, HB1154, HB1166, HB3411

 

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