House Speaker Michael Madigan late Wednesday said he was dropping his proposal to make Illinois school districts and colleges pay retirement costs for teachers.
Madigan said he reached the decision after Democratic Gov. Pat Quinn asked him to set the idea aside.
"I had an interesting meeting this morning with Governor Quinn," said Madigan. "I was surprised that the governor disagreed with me on the issue. He agrees with you. He agrees with the Republicans. He thinks that we ought to remove the issue of the shift of normal cost out of the bill."
Madigan said he disagreed with the governor but was following his request.
House Republicans had balked at shifting pension costs, saying it could lead to property tax increases. The issue threatened to derail other efforts to reduce the state's annual pension contribution.
Madigan said Wednesday night that he's handing the pension bill -- SB1673 -- over to Republican leader Tom Cross (R-Oswego).
The decision by the Chicago Democrat appears to clear the way for a plan to cut pension costs by reducing annual cost-of-living increases for retirees.
It came as tempers flared and the clock ticked away to a deadline to pass a new state budget. Republicans accused Democrats, and especially Madigan, of cutting funds from diabetes research, knowing that Cross' daughter suffers from the disease.
The Illinois General Assembly is scheduled to adjourn by midnight Thursday.
The Associated Press contributed to this report