Jim Dey: Can pension dream become pension deal?
Just as a thirsty man in a desert envisions a lush oasis out in the distance, so too do top state officials have dreams of a legislative fix to Illinois' $100 billion pension underfunding problem.
But, like the oasis, the closer legislators get to an apparent solution, the greater the chances it fades away.
Illinois' next pension oasis looms in the week of Dec. 2. Legislators have been informed by the four House and Senate legislative leaders to keep their schedules open for a special session, but the stars have yet to align.
Late this week, Steve Brown, a spokesman for Democratic House Speaker Michael Madigan, said he might have an announcement later about whether the special session will be held. He called back several hours later to say that he could add no further clarification.
Asked if a special session is less or more than likely, Brown said, "I just don't know."
Brown's four words — "I just don't know" — pretty much sum up the General Assembly's long-running effort to come up with a pension fix. Terrified of taking action, terrified of not taking action, legislators have been paralyzed for years by this vexing problem. They have seen it grow worse by the day but repeatedly opted for inaction.
It won't get much easier for them. Union leaders in Illinois already urged public pension fund members to bombard legislators with calls and letters expressing opposition.
The specifics of the pension plan they oppose remain unknown, but union leaders figure they won't like whatever is proposed.
They're not the only ones who see it that way. State Rep. Chad Hays, a Catlin Republican, said "my guess is that you will see retirees who are extraordinarily unhappy" if a pension bill passes.
Legislators eased the pressure a bit by pushing possible action back after Dec. 2, when the filing period for the November 2014 election expires. That way an unpopular vote won't result in a primary challenge. Further, the vast majority of legislators will be insulated from electoral challenge by the gerrymandered districts in which they run.
Unfortunately, the undeniable reality is that dramatically reducing the underfunding of the state's public pensions will require more money going into pensions and less money coming out.
It's the latter that has current workers and retirees concerned. They're guaranteed generous pensions, can retire far earlier than private-sector employees and are entitled to annual 3 percent cost-of-living increases.
Proposals that would reduce pension payouts include raising the retirement age, modifying the cost-of-living increases and putting limits on pensionable income. Details remain a topic of discussion.
Other proposals include reducing the amount of money current workers must contribute each year, a proposal designed to offer legal "consideration" in a contractual exchange for the employee givebacks on the payout end. The exchange is intended to address a state constitutional provision that bans any diminution of retiree pension benefits.
Increased pension fund revenue could come from using money that now goes to pay interest on pension bonds, once the bonds are paid off. The state is paying on two bond issues — one due in 2015 and the other in 2019. Interest is roughly $1 billion a year on each, money that could go to the pension systems if legislators can resist the temptation to spend it elsewhere.
It's impossible to say whether plans will go forward. But one sign that action may be forthcoming is a recent legislative vote to approve pension changes in the system for retirees and employees of the Chicago Park District. That legislation includes a dramatic modification of the annual cost-of-living increases, a reduction that sets up a court test that could determine what the state constitution's pension diminution clause means.
That constitutional issue must be resolved by the Illinois Supreme Court before any meaningful pension decisions can be fully implemented.
Brown described the park district pension bill as an "example that it is possible for employers and employees to negotiate a plan to stabilize their pension funds" and get it approved by the Legislature.
However, Brown said state employee union leaders "have largely circled the wagons and fought every step of the way.
Illinois' legislative process on pensions is far different than the traditional bill passing described in civics textbooks.
A special 10-member House/Senate committee has been formed to study the issue in private. There are five Democrats and five Republicans. The four House and Senate legislative leaders — Speaker Madigan, House Republican Leader Jim Durkin, Senate President John Cullerton and Senate Republican Leader Christine Radogno — also have been meeting in strict secrecy.
When and if they agree on a proposal, Hays said, he expects the leaders to start twisting arms to attract enough votes to pass both chambers. They will rely on what is known as a "structured roll call" to pass the bill.
A structured roll call reflects a bipartisan conspiracy of party leaders to each get legislators from safe districts in their parties to vote yes so that Democrats and Republicans in more problematic districts can vote no.
Hays said "there is no question it will be a structured roll call," and that means legislators with large constituencies of public pension members — teachers, university employees, retirees — will vote no. That group would include virtually all of this area's local legislators.
But no legislators can vote either yes or no if there's no agreement on a bill, or no agreement to schedule a special session or no agreement to twist arms to get the necessary number of yes votes.
A pension deal is glimmering off in the horizon, but there's no guarantee it won't fade away — again.
Jim Dey, a member of The News-Gazette staff, can be reached by email at email@example.com or at 351-5369.