Illinois House postpones pension vote as time grows short

SPRINGFIELD -- Efforts to pass pension changes during the Illinois General Assembly’s lame-duck session took a serious hit Monday when the House failed to vote on a pension measure approved in committee hours earlier.

The bill’s principal sponsor, Rep. Elaine Nekritz, D-Northbrook, said she will continue working to round up the 60 votes needed for passage, but time is running out.

New lawmakers are seated at noon Wednesday. After that, the proposal will have to start over.

As of Monday afternoon, the Senate — which also would have to act if the House approves the measure — was not scheduled to return to Springfield before the new legislators are sworn in. However, at least two senators said they have been directed to be back in Springfield at 3 p.m. today. Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago, said that schedule is only tentative.

“Senators are on standby until we see action from the House,” she said.

’Quite a bit of work to do’

The House will be in session again at 11 a.m. today. Senators could act on pensions as late as Wednesday morning if the House musters the votes to pass the changes, which are incorporated in Senate Bill 1673.

“We still have quite a bit of work to do,” Nekritz said when asked how close she was to securing 60 “yes” votes. “I wish there was one principal objection (from lawmakers).”

Some Chicago legislators are upset that the bill does not shift the cost of downstate teacher pensions to local school districts and away from the state, she said. Chicago teacher pensions are paid from Chicago property taxes.

Nekritz said other House members are concerned about changes to pension cost-of-living adjustments contained in the bill, while another group is reluctant to consider the measure without some assurance the Senate will take action as well. The House Personnel and Pensions Committee approved SB1673 on a 6-3 vote Monday afternoon and sent it to the full House for consideration. The bill would limit retirement benefit increases and require those still working to increase their pension contributions, while also forcing state government to make its full pension payment each year.

Supporters said the bill would bring the state to 100 percent pension funding after 30 years. Illinois now has the worst-funded pensions in the nation at 39 percent. House Minority Leader Tom Cross, R-Oswego, called for approval of what he called a “pretty good product.”

“The pointing of fingers has got to stop,” Cross said. “We’ve got to quit talking and pass something.”

Unions: Unfair, unconstitutional

However, representatives of public employee unions called the plan unfair and predicted that courts would find that it violates the state Constitution.

“This bill attempts to shift the cost of pensions away from the state and onto the backs of (public employees),” said Henry Bayer, executive director of the American Federation of State, County and Municipal Employees.

“Our Illinois teachers are scared,” said Cinda Klickna, president of the Illinois Education Association. “We predict you are going to have more people who cannot make it in this city and state because you have cut what they rely on.”

The bill calls for downstate teachers, university workers, lawmakers and state employees to contribute 2 percentage points more of their salaries to their pensions. It also caps the salary that qualifies for pension benefits.

The greatest savings, however, would come from changes in pension cost-of-living adjustments. Retirees now receive an annual 3 percent boost, compounded, in their pension benefits.

The bill would stop COLAs for six years, and when they resume, they would apply only to the first $25,000 of pension benefits. Also, no retiree would get a COLA until he or she reaches age 67.

State’s role

Rep. Raymond Poe, R-Springfield, voted against the bill in committee. He said the COLA changes will hurt retirees.

“What happens if there is higher inflation?” Poe said. “How is a person going to survive on that?”

Poe also said the reform bill doesn’t demand enough of the state.

“They’re talking about saving $30 billion,” he said. “That’s mostly coming off of employees. The employees already have paid their half. What are we as the state putting in? We’re not putting anything in.”

Nekritz, though, said the state already raised the income tax, and nearly all of that money was used to make the state’s pension payment.

“There is some skin in the game by taxpayers already,” she said.

Public employee unions say the state could turn to some new taxes, such as an assessment on satellite TV service, and an end to a variety of business tax breaks, to raise money for pensions.

The state’s failure to pay its full obligation to the pension systems is the biggest reason for the growth in pension debt, although factors like poor investment returns and higher benefits also have contributed to the shortfall.

“The solution is to talk about revenue,” Klickna said.

“There isn’t enough revenue in the state to dig us out of this problem,” responded Rep. Darlene Senger, R-Naperville, who voted for the bill.

Cross warned that if lawmakers don’t act on pension reform now, the state’s credit rating inevitably will be cut again. He also said pension obligations will continue to draw money from other state programs.

Civic Federation President Lawrence Msall said Illinois is on a path to have one-third of its operations budget devoted to pensions.

“It is clear the state cannot devote exclusively to pensions such a large part of its budget,” Msall said.

Statehouse reporter Lauren Leone-Ross contributed to this report. Doug Finke can be reached at (217) 788-1527.