Illinois Legislature, unions eye competing pension plans

Posted: May. 6, 2013 9:26 am Updated: May. 27, 2013 12:15 pm

Herald-Whig Senior Writer

SPRINGFIELD, Ill. -- Illinois lawmakers now have two pension reform options that supporters say would fill the nation's largest unfunded liability.

House Speaker Michael Madigan recrafted a Senate bill last week and passed a pension overhaul designed to fully fund pension funds by 2044. Within hours of House passage, Senate President John Cullerton and union leaders announced their own pension overhaul.

John King, president of AFSCME Local 1787 of Quincy, still has to look at the competing plans. He doesn't like a Madigan plan to boost union pension contributions by 2 percent. He doesn't know anything about the plan Cullerton has agreed to with unions, but likes the fact that unions were involved.

"I think the 2 percent increase would bother people. We've been paying our part all these years. Now they want us to pay the part (the state) never put in," King said.

"They need to come back and talk to unions and let us be a part of it."

Lawmakers returning to the Statehouse today will be trying to judge which, if either, of the plans can survive court challenges. They also will be looking at how quickly the rival proposals will restore the pension programs to financial health.

The Illinois Constitution states that membership in a pension or retirement system "shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired." Union leaders have vowed to file lawsuits against any plan they think violates that language. If the Illinois Supreme Court sides with them, the state could be right back where it started -- but with an unfunded pension liability even larger than the current $97 billion shortfall.

Cullerton believes his plan is clearly constitutional and Madigan's is not. Madigan counters that his proposal will pass court muster, save more money and would reduce the liability by $30 billion. It also seems to be the measure with the most momentum and bipartisan support, as well as backing from Gov. Pat Quinn.

Madigan said last week that his plan "obviously does not make everyone happy," but that it's necessary to deal with the state's severe financial problems. Those problems are outlined in a nine-page preamble the Chicago Democrat included in the legislation to show the courts what the state was up against when the legislation was approved. He and other supporters believe justices will find that Illinois' dire finances justify cutting benefits, despite what's in the constitution.

The plan also has support from Senate Republicans, said Patty Schuh, spokeswoman for Senate GOP Leader Christine Radogno.

"We are certainly hopeful we get an opportunity to vote on (it)," Schuh said.

Rikeesha Phelon, a spokeswoman for Cullerton, said he will ask Senate Democrats to calculate the risks when they meet Monday afternoon.

"The end of that calculation may be ‘Let's go for it,'?" Phelon said, referring to Madigan's bill. "We'll have to see."

Local lawmakers came down on different sides of the issue last week.

Rep. Jil Tracy, R-Quincy, voted for Madigan's plan. She said the complicated bill may be the best chance to fix some flawed pension systems.

"I really believe the reform measures are the right way to go to make it solvent and sustainable," Tracy said.

Rep. Norine Hammond, R-Macomb, voted against the plan. She questions whether it is constitutional and she is concerned after hearing that Madigan plans to come back with a plan that would shift teacher pension costs to school districts outside of Chicago.


The Associated Press provided information for this story.




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