Pension proposal faces local opposition
SPRINGFIELD — Four area state representatives say they're likely to vote against the pension reform measure agreed to earlier this week by the Legislature's top four leaders.
But it may pass anyway, the lawmakers said Friday.
"From the overview that I see right now, I would say from my brief perusal of it that I'd be highly likely to be a 'no' vote," said Rep. Chad Hays, R-Catlin, a member of the House Republican leadership. "First, I think this bill is punitive to retirees, specifically retirees who have been retired for some time. It's pretty tough to go to your high school English teacher who made $30,000 in the 30th year of teaching and has been retired for 26 years and say, 'Sorry, new deal.'"
State Reps. Naomi Jakobsson, D-Urbana; Adam Brown, R-Champaign; and Josh Harms, R-Watseka, said they too are likely "no" votes on the revised Senate Bill 1, and also cited new limitations on cost-of-living adjustments for retirees.
"I'm most likely going to vote no," said Jakobsson, who said the emails and phone calls she's gotten from her Champaign-Urbana constituents are overwhelmingly against the proposed deal.
"The (cost-of-living adjustment) is the big eye-catcher for me," she said. "As I wrote a long time ago, an automatic raise isn't always a good thing but taking a COLA away with a reduction in it is, to me, not the way to go."
Harms said he's "inclined to vote no" and believes the agreement essentially takes money from state employees and retirees to help finance Medicaid expansion.
"It drives me crazy," he said. "I don't understand why we have to take money away from workers to help nonworkers."
Brown said he's probably a "no" vote, and cited the COLA provision and another part of the agreement that excludes judges from the pension reforms.
"I likely won't support it. (The previous version of) Senate Bill 1 was one that I didn't support also and this sounds a lot like that and from all indications they'll leave judges out of this one too," Brown said of a provision in that left the Judges' Retirement System of Illinois untouched in the revised pension funding plan.
"I think this will affect all four pension systems except that judges. For me that's a point that, when teachers and other folks come to you and say, 'Is this constitutional? Is this fair?', it's hard to look them in the eye and say, 'Oh yeah, it's fair' when the judges aren't affected by it. It's a huge red flag."
Brown said he's troubled by the provision limiting COLAs for retirees, now 3 percent a year, to a formula based upon a retiree's years of service and the consumer price index.
"The average pension for the teacher retirees in my district is $27,000 a year, and about 95 percent of those folks don't draw Social Security," Brown said of his largely rural district that covers all or parts of Champaign, Douglas, Edgar, Macon, Moultrie, Shelby and Vermilion counties. "The statewide figure for the average teachers pension is about $32,000.
"I think there's a misconception out there probably driven by suburban pensions. You've got some principals and administrators who are really making a killing, but down in my district it's not the case. You're to be affecting elderly folks who are just scraping by in the first place. This does vary greatly geographically."
Brown called the cost-of-living adjustment "the biggest benefit reduction" in the pension deal and said he believes it is unconstitutional.
"The state Constitution spells it out pretty plainly that current employees and retirees shall not see a benefit reduction. Personally I think it is," he said. "In one email I got this morning a man said that his pension will be affected by over a hundred thousand dollars over the lifetime of the pension, just based on that simple COLA change. That's real money. That's going to make a substantial impact in someone's livelihood, especially so late in the game that they're not going to be able to adjust. I don't think it's right. I don't think it's moral."
Hays agreed that the law, even if passed, might be overturned by the courts.
"I think there are still going to be some constitutional problems with this," he said.
Jakobsson said she didn't want to opine whether she thought the proposal was constitutional.
"I'm not an attorney and I'll let them work that out if this bill passes," she said.
Still, both Jakobsson and Brown believe the measure will pass, although it will get little if any support from downstaters.
"I have not talked to a lot of my colleagues yet although it sounds like it will," Jakobsson said. "I think it might pass."
"I think personally it's going to pass, based on all four leaders signing off on it," Brown said of the agreement reached by House Speaker Michael Madigan, Senate President John Cullerton, House Minority Leader Jim Durkin and Senate Majority Leader Christina Radogno. "I think you're going to see some key geographic frustrations. Here in the Champaign area you're going to see a lot of folks opposed to it.
"It's also interesting that these pension changes don't affect Chicago teachers. That's worth mentioning. You're going to ding suburbanites and downstaters again, and the Chicago teachers win out because they have a separate pension system. It doesn't pass the smell test to me."
Hays was more skeptical that the pension reform bill would be approved Tuesday.
Steve Brown, a spokesman for House Speaker Michael Madigan, said the bill could start in either chamber of the General Assembly.
"Keep an eye on the Senate," Hays said. "I think the Senate will be very, very telling. I'm hearing that (Senate Republican leader) Christine Radogno has 12 votes to put on it. I don't know if that's accurate or not. That means you'd have to have at least 18 Democrats vote yes on it. That's more Democrats voting yes than Senate Bill 1 had in totality the last time. I think the action, so to speak, is going to be in the Senate."
In its previous version, Senate Bill 1 got 10 Republican votes and only six from Democrats on a roll call taken May 30. Five of the "yes" votes came from Downstaters.
Sen. Chapin Rose, R-Mahomet, said he was still getting details about the legislation and couldn't say how he would vote.
But he said he was "extraordinarily frustrated by the whole process" in which the legislation was developed.
"When you have four guys and a gal go behind closed doors and then suddenly come out the day before Thanksgiving at 2 o'clock in the afternoon with a solution, and they call everybody up and explain it to them and then they read in the paper something entirely different from what was explained to them, it's slightly frustrating," Rose said.
He also said he was skeptical of several provisions in the bill, including one that professes to contain a guarantee that the pension funds will be appropriately funded.
"Look, I've got five decades of data points that shows that the Illinois General Assembly can't manage a pension fund, and we're supposed to just assume that for the next five years no one's going to change their mind? The funding guarantee is not there," he said. "If the funding guarantee is as weak as I think it is, that alone is very troublesome."
Rep. Brown said the pension changes undoubtedly will wind up in the courts.
"The judge (who hears the case) will have two options," he said. "I think the judge can either hold off until this thing is hammered out in the courts or he can say, make these contributions and we'll put them aside in a separate account that can be refunded as necessary. I don't know which one he would."
Jakobsson said that in one respect she's glad the issue finally seems headed for a vote.
"I have mixed feelings. I think it's time we have something to look at. In that way I'm glad they feel they have come to some kind of an agreement that can at least be put forward," she said.
If the reform measure doesn't pass, Hays said he had ideas for improving it.
"I think there are some much more creative ideas that are out there that aren't included in this concept. In some ways this is Senate Bill 1 but kind of a warmed-over version," he said. "The pension bond that matures in 2019 being rolled into this, that's an improvement. But I think there's a lot more that can be done. I think you still have a very punitive situation, particularly toward retirees."