Not much time left for pension agreement

The state's legislative leaders and Gov. Quinn have been unable to resolve their differences over pension cuts, meaning the issue may not be addressed until after the November elections.

A sultry summer is passing by with little prospect of resolving one of the state's hottest issues — underfunded pensions.

Illinois is in dire financial condition and facing a debt of about $85 billion in its five pension systems, an amount that actually may be understated, and pension payments threaten to eat up all new state revenues and then some, leaving little for other important state services.

Legislators got close to an agreement in the spring session, but the plan foundered and they left Springfield without acting.

Gov. Pat Quinn has repeatedly said that the Legislature should act on pension reforms over the summer and not wait until the lame duck session after the election in November, but that is looking increasingly unlikely.

Quinn said solving Illinois' pension problem is imperative, and he's warned lawmakers not to go anywhere in August. Quinn says legislators can't "drift through the summer and do nothing about it." But that appears to be what's happening.

When the Legislature adjourned in May, leaders said they needed at least five weeks to study pension issues. The five weeks have passed, Quinn and legislative leaders have met during the summer, but no progress has been reported on the biggest disagreement holding up the deal.

The main sticking point is over a Democratic proposal for gradually shifting employer contributions for downstate teachers' pensions from the state to local districts. Republicans have balked at that proposal, instead saying it's a separate issue and that a pension reform package should be passed first. But Quinn and House Speaker Michael Madigan want a comprehensive deal including school pension payments.

There's one last glimmer of hope for an agreement this summer, but it appears to be a long shot.

Madigan has scheduled the House to convene in Springfield Aug. 17 to vote on expelling indicted state Rep. Derrick Smith of Chicago, who faces federal charges of accepting a bribe in exchange for agreeing to steer a state contract to a day care center. He pleaded not guilty. It would be the first expulsion from the House since 1905. Madigan told legislators to expect their work to be finished the same day.

Quinn said last week that legislators also should deal with the state's pensions problems while they're in Springfield. But Senate President John Cullerton has no plans to call the Senate into session, suggesting instead that the House pass a version of the pension plan that the Senate approved in the spring session. The Senate measure includes pension cuts for lawmakers and state workers but not teachers, but Quinn has said he wants a plan that deals with all state pensions. And there is no assurance the Senate measure would pass in the House.

While Quinn could call the Senate back into a special session, it would make no sense unless the parties reach agreement by then.

Each side accuses the other of stalling, and now it looks like no action will be taken on pensions until after the election when it will be easier for lame-duck lawmakers who are not accountable to vote on a proposal. If so, it will be the second time in less than two years that a lame-duck Legislature acted on major legislation that legislators were afraid to tackle before an election — the massive state income tax increase passed early in 2011.

In the meantime, each day without pension reform costs the state about $12.5 million by Quinn's calculation. If he's right, the cost of a summer of inaction could reach close to $2 billion.

Sections (2):Editorials, Opinion
Categories (2):Editorials, Opinions

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Sid Saltfork wrote on July 26, 2012 at 12:07 pm

The State of Illinois has been giving out "grants" for municipalities all this summer.  They even gave money for a "start up" business, a fish factory, in Grafton.  There is a big renovation for the west wing of the Capitol Building which costs millions of dollars.  The state is not broke.  The legislators continue to give pork barrel projects for campaign donations, and votes.  Sure, they have cut services to the children, the elderly, the Disabled, the working poor, and the poor; but they continue to spend for campaign donations, and votes.  They admit that years of employer pension payments were "skipped" (stolen).  Now, they want to steal more from the employees, and retirees.  SB1313 was passed to require employees to pay for their promised, and earned health insurance.  They signed a contract with the current employees; but refused to honor it.  The proposed "pension reform" requires giving up the state constitutionally guranteed COLA in retirement for "any" health insurance provided to employees, and retirees.  Two of the existing legislators are facing Federal corruption charges.  The spending is to be paid by reneging on obligations to employees, retirees, and vendors owed money.  The problem the state is facing is that bond holders are starting to worry that if the state continues to steal from employees, and stiff vendors; they will be stiffed next.  The state needs to meet it's obligations, and stop spending on pork barrel projects for campaign donations, and votes.  The bond holders would regain confidence.  However; it would mean that legislators would serve as public servants, and not financially benefit from being politicians.  The media which is owned by the wealthy supports the theft of pensions to protect their financial special interests.  It's the Illinois way; Corruption in politics.      

Sid Saltfork wrote on July 30, 2012 at 7:07 pm

Looks like you got your wish News Gazette.