AFTER YEARS of delay and failed attempts, Illinois lawmakers last week took the difficult but necessary step to begin paving the way for the state to emerge from a crippling financial crisis by approving historic pension reform legislation.
The landmark overhaul is expected to save the state about $160 billion over three decades and guarantees Illinois will make its full annual contribution to the pension funds. The plan is expected to fully fund the retirement systems by 2044.
Clearly, this is not a perfect solution, and it undoubtedly will face court challenges. But in judging this legislation, it should be noted that the pension systems that cover state workers have an unfunded liability of $100 billion, the worst in the nation, and failing to address the issue would have been catastrophic.
This hard-fought compromise, three years in the making, addresses Illinois' most pressing issue and the top priority of Gov. Pat Quinn, gets the state going in the right direction and helps avoid what surely would have been a financial collapse.
"It's the right thing to do, a long time in coming," House Speaker Michael Madigan said Thursday after Quinn signed the bill into law. "There's plenty of congratulations that should be spread around to the people that were willing to take a tough vote but to do the right thing for the fiscal stability of the state ... It's a lot better than bankruptcy."
The unfunded pension liability had led to 13 credit downgrades for Illinois since 2009, meaning the state had to pay more every time it borrowed money to carry on its business. Trying to meet that growing pension obligation came at the expense of education, law enforcement, health care and other vital state services. Left unchecked, it eventually would have consumed the entire state budget.
Continuing to do nothing would have plunged Illinois into insolvency.
A 10-member joint pension reform committee was formed last spring to develop solutions after the Senate and House reached an impasse during the regular legislative session. The six Democrats and four Republicans were unable to reach a majority opinion, however.
Madigan, the driving force behind the final legislation, and the other three legislative leaders -- Senate President John Cullerton, Senate Minority Leader Christine Radogno and House Minority Leader Jim Durkin -- then agreed to meet in a series of sessions that produced a compromise bill they felt could be passed.
The law curbs the 3 percent compounded cost-of-living-allowance, raises the retirement age for workers 45 or younger and caps the salaries that factor into pension benefits. State workers will pay 1 percent less in payroll contributions to pension systems and they will be offered a 401(k)-style defined contribution plan to enhance money available at retirement.
Admittedly, this may not be what the thousands of employees who met their pension obligations while the state failed to meet its wanted to see happen, but the alternative would have been much worse -- a bankrupt pension system. The legislative leaders understood state workers faced bigger risks if the plans became insolvent.
That's why Tuesday's bipartisan vote, as difficult as it was, will be remembered as one of the biggest legislative achievements in decades.
Republican state Rep. Jil Tracy of Quincy was a member of the joint House-Senate pension reform committee that failed to reach a consensus. She voted for the compromise bill crafted by the leaders because she believed it was the best solution that could be achieved now.
Going forward, legislators must realize more work must be done for the state to get its financial house in order. Illinois owes more than $8 billion in unpaid bills, it continues to underfund its schools and it has massive infrastructure needs.
These and other looming crises could use the same kind of hard work and commitment that made pension reform possible.