The fate of a last-minute pension reform plan is in doubt after the Illinois House adjourned Monday afternoon without calling for a vote.
The House is scheduled to reconvene today, but local lawmakers are skeptical that the attempt to tackle the state’s $96 billion unfunded pension liability will be approved.
Today is the last full day of the lame-duck session. On Wednesday, the General Assembly elected in November will be sworn in. If the House approves the measure, the Senate would have to be called back into session to vote on it for it to pass.
A House committee Monday afternoon approved a compromise bill that would freeze cost-of-living increases and require higher contributions from employees in the five state-run pension systems. Controversial language to shift the burden of teacher pensions to local school districts was dropped for the time being.
McHenry County’s two veteran House members expressed doubt at the bill’s chances – not only of passage but also of surviving an inevitable court challenge from the state’s powerful public-sector unions.
Rep. Jack Franks, D-Marengo, said he needs more information on what Senate Bill 1673 will accomplish if approved. “I need to see hard numbers, and I need to see the analysis of the constitutionality,” he said Monday afternoon. “I’m not convinced this is the right bill yet.”
The bill before the House is an amended version of a bill proposed in December by House Pension Committee Chairwoman Elaine Nekritz, D-Northbrook. It would push back the age that retirees can get their automatic 3 percent cost-of-living increases to 67 years, and increase employee contributions by 2 percent of salary, spread out over two years. Furthermore, the cost-of-living increase would be applied only to the first $25,000 of a retiree’s pension.
Another provision would require the state to fully fund its contribution to pensions under threat of legal action by the accounts’ administrators. The requirement is aimed at placating state workers who have spent decades paying their share from each paycheck into the system while state lawmakers have either underfunded their contribution or skipped it altogether to spend it on other things.
Public-sector unions have vowed to sue should the bill become law, citing the provision of the Illinois Constitution that states that public pension benefits cannot be diminished or impaired. Although state Rep. Mike Tryon, R-Crystal Lake, fully supports pension reform, he has said that Nekritz’s bill would have no chance of holding up in court.
“This bill, I believe, is probably the most unconstitutional [pension] bill we have seen,” said Tryon, who is not attending the lame-duck session because of a death in the family.
But newly sworn Rep. David McSweeney, R-Barrington Hills, said he will support the bill should it come for a vote, and believes it will pass constitutional muster. He said the bill is not perfect but reduces costs without raising taxes and without shifting the cost of teacher pensions toward local property taxes. McSweeney said he would have opposed the bill had the cost-shift provision remained.
“The unions will challenge any reform legislation that is passed. The state right now is in dire financial straits, and we need to make these changes,” McSweeney said.
Almost all of the revenue generated by the historic 2011 income-tax increase – 67 percent on individuals and 46 percent on businesses – has been swallowed by the state’s public pension obligations. Supporters had touted the tax as a way for the state to pay down its multibillion-dollar backlog of unpaid bills.
Franks said Nekritz is to be commended for proposing the bill – she and other supporters, frustrated over the lack of leadership in moving reform forward, took the initiative and proposed the fix on the last day of the fall veto session. He said any failure should be put at the feet of Gov. Pat Quinn, whom Franks alleges has shown little leadership aside from giving lawmakers a Wednesday deadline to enact pension reform.
“He has said that the reason he was put on God’s green Earth was to solve the pension problem, and all he’s done is brought out Squeezy the Pension Python,” Franks said.
Squeezy the Pension Python is a cartoon character introduced in fall as part of a Quinn-led awareness campaign to draw attention to Illinois pension problem.
Any legislation that does not become law dies with the Wednesday swearing-in of the new General Assembly. Springfield lame-duck sessions are famous for last-minute attempts to pass profound and controversial legislation – the number of votes needed to pass bills reverts to simple majority with the new year, and outgoing lawmakers who no longer have to worry about the political consequences of their votes may be persuaded to pass laws they otherwise would not.
On the Net
The pension reform bill as presented is Amendment 10 of Senate Bill 1673. You can read the text of the bill at www.ilga.gov.