Madigan, Cullerton push dueling pension visions –

2 May

House Speaker Michael Madigan on Wednesday predicted that not only would his sweeping government worker pension overhaul pass the General Assembly, but it would be upheld by the Illinois Supreme Court.

The Democratic speaker’s prognostication on one of the state’s most pressing issues came as Senate President John Cullerton indicated he’s got a new pension reform plan drafted by organized labor that he wants considered.

While Cullerton was mum on the specifics of the union pension proposals, he said it is based on giving retirees a choice. For example, Cullerton has offered retirees a chance to opt between scaling back pension benefits or giving up health care. Cullerton has long favored pension reform that offers a choice rather than unilateral benefit cuts, saying that approach is more likely to pass a legal test.

Madigan’s plan, however, is based on benefit cuts. The speaker suggests taking 2 percent more from worker paychecks over two years, raising the retirement age to 67 for younger workers and scaling back cost-of-living increases. The idea is to try to straighten out the nation’s worst-funded state retirement system that is nearly $100 billion in debt.

The speaker quickly moved the bill through a House committee Wednesday with only one of 10 lawmakers voting against the measure — a Republican whose Springfield-area constituency is loaded with state workers. Madigan could call it for a vote in the full House he controls on Thursday.

House Republican leader Tom Cross, of Oswego, predicted the legislation, which includes elements he has advocated, would pass the House. But Madigan went further, saying it also would pass the Senate and be found constitutional by at least four of the high court’s seven members following an expected challenge by unions.

The speaker, who has been instrumental in the rise of many judges and doubles as Illinois Democratic chairman, emphasized that he had no communication with any members of the state Supreme Court — four of whom are Democrats.

Madigan’s bill would impact state rank-and-file workers, public school teachers outside of Chicago, lawmakers and university employees. Unions representing public workers immediately branded it illegal, contending it would violate a provision in the state constitution that says pension benefits cannot be “diminished or impaired.”

Illinois Federation of Teachers President Dan Montgomery, one of numerous union leaders who testified against the bill, made it clear public employees were more than disappointed by the committee action: “This is a gut-punch to the state’s teachers, university workers, firemen, nurses — all our public employees. It’s unnecessary.”

The bill is garnering strong support from both political parties in the House partly because Madigan did not include a provision to shift the costs of paying for retired downstate and suburban schoolteachers from the state treasury to the local school districts. But Madigan said he would bring up the matter in separate legislation “very soon.”

The speaker also said he anticipated his plan would lessen the large pension payments in the state budgets, but suggested it would not be “prudent” to assume savings in the next budget year because a court challenge will take a while to resolve.

Madigan’s point person on pensions, Rep. Elaine Nekritz, D-Northbrook, estimated the bill could save $150 billion over 30 years to bring the retirement system funding level to 100 percent.

Under the bill, a worker’s longevity would be factored into pensions under new limits put on the 3 percent automatic cost-of-living increases retirees receive. Cost-of-living increases would be limited to an amount equal to no more than $1,000 multiplied by the number of years a person spent in public service. For example, a retiree who worked 30 years would get to base yearly cost-of-living increase on the first $30,000 of a pension.

Cullerton said he would present Madigan’s bill to the Senate Democrats for consideration, but he noted the speaker’s pension plan contains many elements of a proposal that failed in the Senate this year.

“It’s not like we haven’t voted on this already,” Cullerton said.

via Madigan, Cullerton push dueling pension visions –

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