Public Pensions' Fate Rests Largely With Divided Democratic Leaders

May 3, 2013

A plan that will leave state employees and teachers with reduced retirement benefits made it out of the Illinois House Thursday, potentially paving the way for the pension overhaul that has thus far eluded lawmakers.  But it also ignites a face-off between two of the state's top Democrats — with the potential to keep a pension overhaul as elusive as it's ever been.   

State workers, teachers and university employees — current and retired —have been fighting to hold on to their promised retirement benefits for years.There's widespread sentiment that with the House's action, they may be losing that battle.The measure, narrowly approved by the House on a bipartisan 62 to 51 vote, with six members voting present, was immediately hailed by Governor Pat Quinn as the "biggest step to date towards restoring fiscal stability in Illinois."A key negotiator on pensions, Democratic Representative Elaine Nekritz of Northbrook, says she has a "feeling" about it. 

NEKRITZ: "I don't have a crystal ball ... I just feel like this is ... that there's so much consensus around this particular bill ... and so I feel like that will be the place where we will end up."

 And — perhaps most notably — House Speaker Mike Madigan made a vow that he'll do all he can to get it through the General Assembly.  

MADIGAN: "I’m committed to the bill, I'm committed to solving the issue. I've spoken to this publicly.  That the state's fiscal problems are so bad that they require radical surgery and this is the first step."     

 Madigan's legislation is a combination of ideas from a variety of earlier proposals, and is designed to eliminate Illinois' nearly 100 billion dollar pension debt by the year 2045.It would significantly reduce the yearly 3-percent, compounded pension boosts retirees receive, instead giving a less generous increase based on a  formula that rewards employees with the longest careers working for the state. Employees would also have to contribute 2-percent more of their paychecks toward their retirement. And the measure hikes the retirement age to 67, for any worker 45 years old or younger. They're changes decried by labor leaders like the Illinois Federation of Teachers’ President, Dan Montgomery: 

MONTGOMERY: "Well this is a gut punch to the state's teachers, university workers, firemen, nurses ... all our public employees. And it's unnecessary."

 A coalition of unions say they recognize Illinois' underfunded pensions are a problem — an ever-growing one that's eating into money that could instead be going to schools, healthcare, environmental causes, anything.   But unions say it's unconstitutional, not to mention unfair, to cut workers' promised retirement benefits. They're working with Senate President John Cullerton — like Madigan, a Democrat — on a SEPARATE proposal. Cullerton's not sharing details of the plan he's working on with unions. But when asked Wednesday about Madigan's plan, this was his reply: 

CULLERTON: "The fact that the president of the Senate and the unions are putting their full  weight behind something means something too. So if we're able to get our caucus to support a position the unions are for, that would be significant as well.”

 Union support would be significant — many legislators are wary of angering the politically-active voting bloc. A union backlash helped to kill a package similar to Madigan's when it was in the Senate earlier this year. But the Speaker didn't appear to think much of whatever it is unions are working on with Cullerton: 

MADIGAN: "I don't expect that they'll be able to come to an agreement such that people would be prepared to back away from this bill.  There's two chambers here. And both chambers have to pass the same bill."

 Whatever the Senate does, Madigan says it won't save as much money as  his plan.   

MADIGAN: "My expectation is that the Senate will approve this bill."

 Speaker Madigan has built a reputation for getting his way during the 43 years he's been a member of the Illinois House. It may be that with all of the momentum surrounding it, Cullerton will be pressured into giving in and ushering Madigan's plan through the Senate. Or the conflict between two of the state's leading Democrats could continue to stand in the way of a pension overhaul. Either way, it's clear that state workers' pensions rest in the hands of Madigan and Cullerton. One of the state's other top Democrats — Governor Pat Quinn — is staying out of the details. While commending the House vote, he says he respects the role of both chambers.  

QUINN: "The bottom line for me, and I think for the taxpayers and people of Illinois, is to get the job done this month. We must have — through both houses of the legislature — a  final bill, that arrives on my desk, that I will promptly and quickly sign and move our state forward."

 Quinn has appeared willing to support just about any plan that appears to be gaining traction.  The governor says he just wants SOMETHING passed that will ease Illinois' pension burden.