No vote on Illinois House pension plan today
The Illinois House adjourned for the day without voting a major government worker pension overhaul, casting grave doubt on the reform plan’s fate.
The bill passed out of a committee earlier today, but proponents are still trying to round up enough votes to get it out of the full House.
The clock is ticking down until a new legislature is sworn in Wednesday. The Senate is not in town, and it’s unclear whether enough lame-duck senators would return to vote on a pension plan even if it passed the House.
The House will return at 11 a.m. Tuesday.
“Sponsors will continue to work to find the votes and move the bill forward,” said Ryan Keith, a spokesman for Democratic Reps. Elaine Nekritz of Northbrook and Daniel Biss of Evanston.
Earlier today, the plan won approval from a House committee. Workers would chip in more from their paychecks and automatic cost-of-living increases would be reined in for retirees under the proposal. Retirees would not get automatic annual inflation bumps until age 67 and cost-of-living increases would be frozen for six years.
The legislation emerged as the most comprehensive pension overhaul for government workers to reach the House floor with bipartisan support since estimates of the nation’s worst-funded retirement system hit $96.8 billion. The proposal moved to the full House on a 6-3 vote.
Rank-and-file state workers, university employees, legislators, and suburban and downstate public school teachers and retirees would be impacted.
Sponsoring Rep. Elaine Nekritz called for action because the state’s pension finances are “in crisis.” She said the proposal is not the “ideal solution” but represented a solid compromise that lawmakers can pass before a new legislature is sworn in Wednesday.
“The choice is clear. The time is now,” Nekritz testified in the House hearing. Failing to act would mean less money for schools, health care, social services and other state operations, she said.
House Republican leader Tom Cross of Oswego hailed Nekritz and Rep. Dan Biss, D-Evanston, for jump-starting a “give-and-take process” that has resulted in a “very good product” that will lower the debt by $30 billion.
“This is not going to get better, the economy will not save it and it’s got to be fixed,” said Cross, who threw his support behind the bill after working two years for pension reform. “This is something that has to happen.”
He warned that the state must act or its already-poor credit ratings will drop farther and it will cost Illinois more to borrow money. Businesses already are wary about staying or moving to Illinois because of the uncertainty over the state’s financial albatross, and workers deserve to know the fate of their pension plans, he said.
Cross said the state pension systems are only 39 percent funded and “it’s not getting any better” because the state is on the hook for nearly $7 billion a year in pension payments —nearly a quarter of the state’s overall operating budget.
Biss maintained it is the only bipartisan legislation that has come forth that “truly solves theproblem” and has a “rationale, sensible framework.”
In stark disagreement, Michael Carrigan, president of the Illinois AFL-CIO and a leader in a coalition of unions fighting the changes, maintained the pension proposal would disenfranchise people who have made their payments over the years and “played by the rules.”
Proponents maintained the proposal would be constitutional, but opponents maintained it represented “an all-out assault on employees” and a violation of the state charter’s ban on diminishing benefits once they are given.
Illinois Federation of Teachers President Dan Montgomery charged lawmakers would violate their oaths of office if they supported the “illegal plan” and urged them to follow the “better angels of your nature.”
Henry Bayer, who heads the union representing the most state workers, contended the measure “shifts costs away from state and onto the backs” of public workers and retirees.
The plan represented a “Tea Party approach” of “cut, cut, cut,” said Bayer, executive director of the American Federation of State, County and Municipal Employees Council 31.
Among the key features of the House plan is a freeze on cost-of-living increases for all workers and retirees for as long as six years. Once the cost-of-living bumps resume, they would apply only to the first $25,000 of pensions. The inflation adjustments also would not be awarded until a person hits 67, a major departure public employees who have been allowed to retire much earlier in some cases and begin reaping the benefits of the annual increases immediately.
Under the proposal, employee contributions to pensions would increase 1 percentage point the first year and 1 percentage point the second year. A lid would be put on the size of the pensionable salary based on a Social Security wage base or their current salary, whichever is higher.
The goal is to put in place a 30-year plan that would fully fund the Illinois pension systems
Even if the House plan passes, the Senate would have to come back to the Capitol Tuesday or early Wednesday to vote on it. It’s unclear how many senators would return for such a vote and whether Senate President John Cullerton, D-Chicago, would help pass it. Cullerton prefers his own plan that he says would pass constitutional muster.