The Illinois House has passed a far-reaching pension reform package muscled through by Democratic Speaker Michael Madigan.
The bill, a rewrite of a much weaker Senate proposal, on Thursday squeaked by on a 62-51 vote, with two voting “present.” Sixty votes were needed for passage. It now heads back to the Senate for concurrence, where the new proposal’s fate is questionable in the last weeks of the spring legislative session.
Madigan’s bill requires most state employees to pay 2 percent more for their retirement, limits their cost-of-living increases from the current 3 percent and raises the retirement age for workers under 45.
In exchange, the bill requires the state, which for decades has shorted its actuarial payments, to fully fund them.
The five state-funded pension systems have about $97 billion in unfunded liability. About 20 percent of fiscal 2014’s General Fund budget is anticipated to go to the state’s ballooning pension obligations.
All but one of McHenry County’s legislators supported the bill, which had Minority Leader Tom Cross, R-Oswego, as a chief co-sponsor. The new language builds on reforms proposed last session by Cross and House Personnel and Pensions Committee Chairwoman Elaine Nekritz, D-Northbrook, who also co-sponsored Madigan’s bill.
“I think this is meaningful reform to ensure the retirement security of Illinois workers, and taking steps to restore fiscal stability to the worst-funded retirement system in the nation,” said state Rep. Jack Franks, D-Marengo.
State Rep. Mike Tryon, R-Crystal Lake, cast the sole “no” vote among area legislators. He supports pension reform and has co-sponsored several bills, but said Madigan’s proposal will not survive an inevitable court challenge by the state’s powerful public sector unions. The Illinois Constitution states that public-sector pensions cannot be “diminished or impaired.”
Tryon said he believes pension benefits that already have been accrued are protected, but that future benefits can be altered. Labor unions already have vowed lawsuits as Madigan’s bill moved forward earlier this week.
“I’ve had problems with the constitutionality of this bill from the moment [Madigan] presented it,” Tryon said. “I believe you can change a lot of the pensions going forward, but I don’t think you can do it backward.”
The bill affects four of the five state-run pension systems for suburban and downstate teachers, rank-and-file state workers, university employees and state lawmakers themselves. The proposed reforms do not touch the pension systems for judges, who sued – and won – when former Gov. Rod Blagojevich tried a decade ago to eliminate their annual COLAs.
Madigan rewrote Senate Bill 1, sponsored by Senate President John Cullerton, D-Chicago. That bill, which passed the Senate in March on a 30-22 vote, only applied to suburban and downstate teachers and gave them the option of keeping their 3 percent annual COLA or having state health insurance.
McHenry County’s three state senators voted against the bill because they said it did not go far enough.
Franks and Rep. Barbara Wheeler, R-Crystal Lake, said they are confident that Cullerton will put the bill to a vote or work with Madigan to craft compromise language that still enacts meaningful reform. Cullerton, like Tryon, has long opposed proposed pension fixes that he says he believes will violate the state Constitution.
“This is probably the only comprehensive pension reform package we’re going to see this term, and we have to do something. We’re in fiscal crisis, and doing nothing would be disingenuous to our constituents,” Wheeler said.
The General Assembly spring session ends May 31. Special sessions aside, it will not reconvene until the fall veto session. After May 31, the number of votes needed to pass legislation through the end of the year increases to a three-fifths majority.