House should send message to bond agencies, Cullerton says


SPRINGFIELD -- Illinois Senate President John Cullerton renewed his call Wednesday for the House to take up pension changes affecting only state employees and state lawmakers.

The Chicago Democrat said acting on even a portion of the state’s pension funding dilemma should send a message to bond rating agencies that the state is addressing its financial problems, including underfunding of its pension plans.

“The rating agencies should look to the vote that we took in the Senate and hopefully the vote that they’ll take in the House and see we passed major, major pension reform,” Cullerton said.

The Senate approved House Bill 1447 in the closing hours of the spring session, but the House didn’t take up the bill before it adjourned.  That’s the bill Cullerton wants the House to consider when the General Assembly returns Aug. 17, in a special session called by Gov. Pat Quinn.

Effective date

The problem is the bill has an immediate effective date, which means it would need 71 votes (rather than the normal 60) to pass the House.  Finding the additional 11 votes would be difficult, if not impossible.

As an alternative, Cullerton said, the House could put the pension reform language in a different bill with an effective date of July 1.  That version would need only 60 votes.

“In that case, we (the Senate) would vote for it,” Cullerton said.

The bill would require participants in the State Employees Retirement System and the General Assembly Retirement System to make a choice about their pension packages.

They could choose to keep the 3 percent compounded cost of living allowance currently promised by state pension plans.  People making that choice, however, would no longer have access to retiree health insurance, and any future salary increases, if they are still working, would not count toward their pensions.

As an alternative, they could keep access to state retiree health insurance and continue to have raises count toward their pensions. But their annual retirement COLAs would be one-half the urban Consumer Price Index or 3 percent, whichever is less.  The COLAs also would not compound.

Cullerton said the bill would save the state $30 billion over the next 40 years.

Quinn: Include teachers, college employees

Quinn didn’t specify in his special session proclamation exactly what pension reform legislation he wants lawmakers to consider. 

However, his office later said lawmakers should consider a plan that also covers downstate teachers and university workers, along with a cost-shifting proposal under which local school districts would pay the pension costs for their teachers, rather than the state.

Cullerton said he thinks a cost-shifting plan that eases the financial impact on schools can eventually be worked out, but there’s no agreement yet.

“We’ve talked about it, we’ve made progress on it,” Cullerton said.  “We could do it in the next two weeks, but we could do it in November, too.”

Quinn spokeswoman Brooke Anderson said applying pension changes only to state employees and lawmakers wouldn’t go far enough.

“Senator Cullerton’s bill is a good step, but it would only create one-third of the necessary savings to eliminate the unfunded liability,” Anderson said.  “It’s certainly in the best interest of Illinois taxpayers and our bond rating for the General Assembly to act to stabilize all four systems and finally restore fiscal stability to Illinois.”

Doug Finke can be reached at (217) 788-1527.