Madigan's pension plan speaks volumes
People have been waiting for months for Illinois House Speaker Michael Madigan to take the lead on the public pension issue.
Michael Madigan finally laid his cards on the table when he introduced pension legislation Tuesday. Or did he?
One never knows with the inscrutable Madigan, who operates by the theory that he who says least has the most power. Perhaps the most one can say is that Madigan introduced a bill that purports to reflect his idea of what is necessary to fix Illinois' underfunded public pension systems.
Reflecting Madigan's dominance of legislative proceedings in Springfield, the House Personnel and Pensions Committee voted 9-1 Wednesday morning to send the proposal to the House floor.
Madigan's proposed legislation is sure to raise howls of protests from public employees and public employee unions. But, significantly, it's already received an endorsement of sorts from the governor's office. Brooke Anderson, a spokeswoman for Gov. Pat Quinn, described it as a "solution that fixes the problem," an overly generous assessment. A spokeswoman for state Rep. Tom Cross, leader of minority Republicans, said he "welcomes any sort of comprehensive look at pension reform."
But it would be a stretch to say this is a done deal. Madigan appears to remain at loggerheads with his legislative junior, Senate President John Cullerton, who has a different interpretation of what's constitutionally permissible and a different proposal.
Since the two plans are incompatible, someone will have to cave. Madigan doesn't cave very often.
But his proposal includes one significant concession — it abandons his plan to shift the cost of teacher pensions to local school districts. That's a big deal to some legislators, particularly downstate Republicans concerned about holding the line on local property taxes.
But in our view, Madigan went too far. While dropping the cost-shift plan makes sense, it is perfectly reasonable to hold local school districts responsible for the end-of-career salary boosts they've handed out for years to retiring teachers. We're talking about outsized pay hikes, those in excess of annual increases given to non-retiring teachers, to encourage veterans to leave. They forced extra costs on the Teachers' Retirement System, and there's no reason that local school districts should not pick up the tab.
Unfortunately, Madigan's plan would place the lion's share of the concessions on public employees by requiring larger retirement contributions while reducing benefits.
The plan would limit the salary on which a pension could be based to $110,000 and reduce annual cost-of-living increases. It would also require the state to make the annual pension contributions it skipped in previous years, self-destructive decisions that created this financial nightmare.
Madigan's action, however, does nothing to address the overriding question — what's constitutionally permissible? No pensioners would get less than they currently receive, but they would get less than they have been promised. Is that allowable under the state Constitution's guarantee that pension benefits cannot be diminished? Only the Illinois Supreme Court can answer that question.
Nonetheless, the Madigan plan — despite its unfortunate impact on state employees — is a welcome addition to the debate in Springfield. The General Assembly cannot allow this ever-growing financial problem to fester, and the Legislature can't act until Madigan is ready. His push may well force necessary action.