SPRINGFIELD – Illinois lawmakers began putting the pieces in place Monday for a potentially historic vote to address the nation’s worst public-pension shortfall, as legislators scrambled to digest the complex deal and labor unions and other political heavyweights ratcheted up pressure for and against it.
The House and Senate are expected to vote Tuesday on the years-in-the-making agreement. Legislative leaders say the proposal, which emerged last week, would save an estimated $160 billion over 30 years and fully fund the state’s five pension systems by 2044 through benefits cuts for workers and retirees.
As of Monday evening the plan had the support of a clear majority of members on a pension conference committee – enough to send the measure to the floors of both chambers. But its passage in the Democrat-controlled Legislature was not seen as assured.
Several lawmakers said they still were reviewing the 325-page piece of legislation, and a number of big questions remained for lawmakers to consider with little time before an expected vote. Republican state Rep. Tom Cross of Oswego said he was waiting for more information on the possible impact of the monumental deal.
“This is going to be the biggest vote most legislators make in their career,” he said. “You’ve got one shot at this and you want to do it right.”
Illinois’ pension funds are $100 billion short of what’s needed to pay benefits as currently promised to employees and retirees, largely because lawmakers for years have failed to fully fund the state’s payments to the systems. But until last week, legislative leaders were unable to agree on how to fix the problem – even as pension payments grew to take up about one-fifth of the state’s general funds budget and the major credit rating agencies repeatedly downgraded the state’s rating. Illinois now has the lowest credit rating of any state in the country.
A number of cities and states have dealt with similar pension troubles, but Illinois has notably lagged behind in finding the political will to deal with its ballooning financial problem.
The proposal would push back the retirement age for workers ages 45 and younger, on a sliding scale. The annual 3 percent cost-of-living increases for retirees would be replaced with a system that only provides the increases on a portion of benefits, based on how many years a beneficiary was in their job. Some workers would have the option of freezing their pension and starting a 401(k)-style defined contribution plan.
Language to prevent “pension abuses” is also part of the plan, as nongovernment employees such as union bosses couldn’t participate and new hires wouldn’t be able to bank sick or vacation time to boost pensions.
Republican and Democratic legislative leaders and Gov. Pat Quinn, a Chicago Democrat, have spent recent days drumming up support for the plan through conference calls and meetings with individual members. At the same time, Illinois unions spent Monday flooding the offices of lawmakers as they work to oppose the measure. Labor groups say it’s unfair to retirees and believe that some parts of the plan are unconstitutional. Union leaders planned to speak against the proposal during a Tuesday morning hearing.
Some conservatives also criticized the plan as not going far enough, saying public employees’ retirement benefits will still be far more generous than those provided in the private sector. There also was criticism that the process was too rushed.
Some members, including Democratic state Rep. Greg Harris of Chicago, said they were comfortable with the short turnaround.
“These concepts have been talked about for a long time,” Harris said, acknowledging that there was “natural fear or concern of if this is the best possible solution.” Harris plans to vote yes.
Only one of the three Republicans seeking their party’s nomination for the 2014 governor’s race supports the agreement. State Sen. Bill Brady of Bloomington, a pension committee member, said it was a difficult decision. And U.S. Sen. Mark Kirk, the state’s highest ranking Republican, said Monday the General Assembly should reject the bill “that neither lawmakers nor the voters have had the time to read.”
But a coalition of 11 influential business and civic organizations, including the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association, sent a joint letter to legislators calling it “a good bill” that deserves their support.
“While not a solution to all of the state’s fiscal problems, this bill is a significant step forward,” the letter stated.
Quinn said at an unrelated event in Chicago earlier in the day that he was traveling to Springfield Monday night and would talk to and meet with as many lawmakers as possible to try to get their yes votes.
“I think the most important fiscal vote that will ever be taken by the general assembly in my lifetime,” he said. “We need to erase the liability and move Illinois forward. That’s what I’m committed to and I think everyone who is interested in the future of Illinois, the common good, what’s good for taxpayers should join us in urging a yes vote.”