A pension reform package pushed by Gov. Pat Quinn and House Minority Leader Tom Cross collapsed late Thursday, leaving the last big issue of a productive spring legislative session a casualty of partisan bickering and a heavy union pushback.
Cross (R-Oswego), who took sponsorship of the pension package from House Speaker Michael Madigan (D-Chicago), announced shortly after 7:30 p.m. that he would not call the pension measure for a vote before lawmakers adjourn for the spring.
“The governor’s office asked me this afternoon not to call the bill, and I’ve agreed to do that. It doesn’t do us any good to fight. We have a problem. We need to take a break,” Cross told colleagues in the House.
The package appeared to falter shortly after midday Thursday after Madigan indicated he wouldn’t support it because of dispute with Cross over whether suburban and downstate school districts should take some of the funding load for teacher pensions from the state.
Cross stripped out a controversial cost-shift requirement that downstate and suburban schools begin footing part of the teacher pension tab instead of the state.
With the need to reach at least 60 votes in the House, several sources said Cross could account for half — or a little more — of that amount, putting the onus on Democrats to come up with the balance before a midnight deadline when lawmakers are scheduled to adjourn their spring session.
But despite lobbying from Quinn, the likelihood of widespread Democratic support faced long odds with Madigan vowing to vote against the bill.
“He said he wouldn’t support that form of the bill and believes we should have the shift to have the local school districts who make decisions about salaries and others who make decisions about investments be responsible for those choices,” Madigan spokesman Steve Brown said.
The speaker’s position came after Cross’ measure passed the House Personnel & Pensions Committee overwhelmingly Thursday morning, even though there were a litany of complaints from Democratic members about the removal of the local cost-shift provision at the insistence of Republicans.
The original legislation wasn’t “perfect, but this is even more flawed,” said Rep. Elaine Nekritz (D-Northbrook), chairwoman of the panel. “But to keep the debate going, I will vote ‘aye.’ We have to get it addressed.”
Without offering specifics, Cross pledged to continue discussions long-term about requiring school districts, universities and community colleges to “have some skin in the game” for setting high salaries but passing the pension costs for those pay hikes onto state taxpayers.
“I think even if this passes today out of both chambers,” Cross said, “we still have work to do.”
A pension-reform package that Madigan (D-Chicago) carried until late Wednesday would have tackled the problem of the state’s vastly underfunded pension systems by forcing state workers and retirees to accept less generous annual pension increases or lose state-subsidized health insurance and, for current workers, the ability to have future pay increases factored into their pensions.
Madigan’s plan stalled amid Republicans’ complaints that the cost-sharing requirement would cause big property-tax increases or programmatic cuts by suburban or downstate school systems.
Late Wednesday, Madigan stunned the House in acknowledging the impasse and giving up sponsorship of the legislation to Cross, saying that Gov. Pat Quinn asked that the local cost provision be dropped.
Quinn’s administration testified in favor of Cross’ retooled legislation. But the governor’s budget director, Jerome Stermer, told the House panel that the package would result in less overall savings because of the removal of the cost-shift provision.
Stermer said Cross’ package could result in up to $88 billion in savings over the next three decades, rather than the maximum $115 billion he had predicted earlier in the week when school districts were going to have been asked to help the state shoulder teacher and administrator pension costs.
The state’s five pension systems have unfunded liabilities of $83 billion.
Even with the change, Stermer said the state can solve its pension problems during the next 30 years and “can hold our heads high so that we can provide more certainty to our own state budget [and] to the budgets of those who depend on it.
“We can find a way to pay our bills on time, so we can have greater certainty in the Illinois business climate,” Stermer said. “This would respond to profound concerns of the rating agencies and support the continuation of our state’s capital plan.”
“As I have repeatedly made clear, inaction on pension reform is not a choice,” Quinn said in a prepared statement. “We must fundamentally reform our pension system, and we must enact bold reform that eliminates the unfunded liability.”
The governor said he intends to call the four legislative leaders together for a meeting “in the coming week so we can forge a pension reform agreement as soon as possible and return to Springfield to enact it into law.”
“Many members rose to the occasion to take difficult votes to save our Medicaid system from collapse, enact retiree healthcare reform and abolish the oft-abused legislative scholarship program. But we have not finished our work to reform Illinois’ pension system, which is drowning in an ocean of unfunded liability,” he said.