Ward Room
Covering Chicago's nine political influencers

Lawmakers Pass Budget, Delay Pension Reform

House Minority Leader Tom Cross said Thursday evening he couldn't find enough support to pass his version of the plan

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    NEWSLETTERS

    Illinois' regular legislative session ended Thursday night without a vote on legislation to rein in ballooning government pension costs

    House Minority Leader Tom Cross (R-Oswego) said he consulted with Democratic Gov. Pat Quinn before concluding the legislation could not pass during the final hours of the General Assembly's spring session.

    Cross said he couldn't find enough support to pass his version of the plan, which would cut annual cost-of-living increases for retired public employees.

    "This is a difficult issue," Cross said. "We need to find -- in a bipartisan way, both sides -- a solution to this pension issue.."
     
    Both Cross' version of the bill and the one supported by House Speaker Michael Madigan would close the state's vast funding shortfall for government pensions. The dispute is largely over who should pick up the tab and who might suffer the political fallout.
     
    Quinn said he'll call House and Senate leaders in for a meeting to hash out the details before calling all lawmakers back to Springfield for a vote.

    "While this has been a productive legislative session, our work is not done for the people of Illinois," he said in a statement after Thursday's collapse.
     
    "As I have repeatedly made clear, inaction on pension reform is not a choice. We must fundamentally reform our pension system and we must enact bold reform that eliminates the unfunded liability," he said.

    A special session raises the possibility of an extended battle over the issue not long before legislators have to face the voters back home.

    Legislators Shore Up Medicaid, Pass Budget

    Legislators were on the verge of ending the session with action on three big financial issues. They approved a $2.7 billion plan to shore up Medicaid earlier in the session, and they sent a Spartan budget to Quinn's desk Thursday, the final day of the legislative session.

    They also voted 30-26 to allow a casino in Chicago, four riverboat casinos in other cities and slot machines at race tracks. Quinn opposes the expansion and could veto it.

    Democratic leaders said the budget includes painful cuts that are necessary because state expenses keep climbing while revenues remain mostly stagnant. Education spending would decline by nearly 4 percent, child welfare by almost 7 percent and corrections by more than 3 percent.

    The planned cuts triggered opposition from a virtual army of organizations, including unions, advocates for the poor and health care groups.

    Sen. Heather Steans (D-Chicago) said it cuts $700 million from the parts of the budget where officials have discretion to make reductions. When mandatory items such as pensions are included, overall spending increases about $400 million, or one-tenth of 1 percent, to $29.36 billion.

    Republicans focused on that picture of the budget.

    "Two years in a row, spending is going up. There's no dispute about that,'' said Sen. Matt Murphy (R-Palatine).

    The budget also would cut the state's borrowing power to pay for road construction and other transportation needs. Instead of the $2.4 billion requested by the Transportation Department, the budget authorizes only $1.6 billion.

    IDOT officials said that will be enough to continue current road plans but, for technical reasons, could increase the state's costs.

    One reason money is so tight is that the state has to pay more for pensions each year. The increase in the coming year is $1 billion, enough to soak up all revenue growth in the rest of the budget.

    State leaders want to come up with a new payment plan that doesn't include such huge increases.

    They've settled on pushing public employees to accept smaller cost-of-living increases in their pension checks. It would apply to retired state employees, downstate and suburban Chicago teachers, university staff and other public employees. The major exception is judges, who were left out to increase the plan's chance of withstanding a court challenge.

    It would give public employees a choice to either stick with their current, higher pension benefits and lose the free health insurance the state provides or agree to the lower cost-of-living increase and keep their insurance. Cutting benefits is supposed to save the state billions of dollars in coming years, shrinking the eye-popping $83 billion gap between the money retirement systems have available and the money they'll eventually have to pay retirees.

    But that proposal, which might have enough support to pass, has been caught up in a dispute over who will pay the future retirement costs for schools, community colleges and universities. Right now, the state pays for all of that, except for Chicago schools, which handle their own pension costs.

    Madigan (D-Chicago) wants to shift those pension costs from the state to schools and colleges. Republicans and some Democrats objected fiercely, saying it would force schools to raise property taxes.

    After a bitter confrontation on the House floor Wednesday, Madigan dumped the issue in Cross's lap. Cross went forward with a plan that leaves out the pension shift but would make schools responsible for any retirement costs stemming from generous, late-career raises to employees.

    That approach, Cross said, will make employers pay the cost of raises they hand out instead of letting the state shoulder that responsibility. A House committee approved the Cross plan Thursday morning with Democratic support.