State Government

State pension reform back to square one

An 11th-hour attempt at a pension reform bill in the last days of a lame-duck General Assembly became 12th-hour desperation by Gov. Pat Quinn, and then became nothing.

With a bill stalled to rein in the state’s $96 billion unfunded pension liability, Quinn and the bill’s author pitched a plan Tuesday afternoon to put the political hot potato of pension reform into the hands of an eight-member commission whose recommendations would become law unless both the House and Senate ­objected.

But that proposal shared the same fate as the previous bill – both passed the House Personnel and Pensions Committee, but never came to a vote in the full House. With the swearing-in of the new General Assembly at noon today, any attempt at pension reform will have to start over.

Quinn said his proposal was based on the federal commission that was empowered to close unneeded military bases over the objections of congressmen in the bases’ districts. “It’s time to realize under this emergency ... that we have to take extraordinary action to help break the gridlock,” Quinn told the personnel and pensions committee.

The bill would have created an eight-member Pension Review Commission made up of two members each chosen by the General Assembly’s four top legislative leaders. The commission would have had until April 30 to determine needed changes to the law to ensure that four of the five state pension systems for teachers, state employees, university professors and state lawmakers are fully funded by no later than the end of 2045. The recommendations would go to Quinn to be signed into law within 30 days, unless a majority of both houses voted to reject the commission’s report.

Conspicuously absent was the pension system for retired judges, who successfully sued, heard their own case and won when former Gov. Rod Blagojevich tried to eliminate their annual 3 percent cost-of-living adjustments. The last major attempt at pension reform excluded judges for the same reason.

The pension committee on Monday voted to move forward a bill sponsored by Chairwoman Elaine Nekritz, D-Northbrook, which would have limited retirees from collecting their cost-of-living increases until age 67, capped it to the first $25,000 of income and required higher contributions from existing employees. Nekritz acknowledged Tuesday that she was short of the 60 votes needed to pass it.

Even if either bill had passed the House, with lawmakers overcoming resistance to curtail their own pensions, success was far from certain. Bills would have had to pass the Senate, which preferred the plan it approved at the start of this General Assembly. Furthermore, public-sector unions vowed to go to court to defeat any bill that curtails existing pensions, citing the guarantee in the Illinois Constitution that public-sector benefits cannot be diminished or impaired.

State Rep. Jack Franks, D-Marengo, called Quinn’s idea of a commission an unconstitutional “affront to the [General Assembly]” that he would have opposed had it come for a full House vote.

“What the governor is basically saying is that he’s out of ideas, he can’t lead, so he’s coming up and ceding authority to eight people who may have a vested interest in the outcome,” Franks said.

The Senate passed a bill in March 2011 protecting benefits accumulated to date, but giving current employees three options going forward: keep their benefits and pay more, enter a new less-generous tier created for hires after 2011, or go to a 401(k)-style plan. The legislation did not advance in the House.

In a rarity for a lame-duck session, House lawmakers shelved side issues such as same-sex marriage and a ban on assault-style weapons and went all-in on a pension deal when it appeared earlier this week that an agreement could be reached. One of the catalysts was an agreement by powerful House Speaker Michael Madigan, for the time being, to drop language that shifted the cost of teacher pensions to local school districts. That proposal was considered a deal-killer for suburban lawmakers, who said that local property taxes would skyrocket.

Springfield lame-duck sessions are famous for last-minute efforts to pass profound and controversial legislation – the number of votes needed to pass bills reverts to a 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.

Lawmakers in the lame-duck session after the 2010 election raised the state income tax 67 percent, abolished the death penalty and approved civil unions. Six of the 12 lame-duck lawmakers who approved the tax increase, including two who campaigned against it before losing, since have been appointed to higher-paying, pension-boosting government jobs.

• The Associated Press contributed to this report.

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