Big question is whether bill will pass in Senate
The Illinois House of Representatives today approved by a
62-51-2 vote a pension reform bill that would reduce pension benefits, increase
the retirement age, and cap pensionable salaries. Senate Bill 1, which contains
an amendment by House Speaker Michael Madigan (D-Chicago), now goes back to the
Senate, where it faces an uncertain vote.
The House vote was bipartisan in nature, with 22 Republicans,
led by House Republican Leader Tom Cross (R-Oswego), joining 40 Democrats in
voting for the bill. The bill closely resembles an earlier proposal put forth
by Cross and Rep. Elaine Nekritz (D-Northbrook).
The Senate adjourned during the House debate on the bill and
is not scheduled to return until 3 p.m. Monday. In fact, some members of the
Senate came into the House to observe the debate.
Senate President John Cullerton (D-Chicago) long has
maintained that in order to pass constitutional muster a pension reform bill
would have to include a "choice" provision for employees and retirees
to accept a reduction in pension benefits. Cullerton had been meeting with
union representatives, who had submitted a proposal, but it is unclear whether
that effort will continue or whether Cullerton instead will call SB 1 for a
vote. Senate Republican Leader Christine Radogno (R-Lemont) endorsed SB 1.
During the debate, Madigan listed 14 features of his bill, a
listing of which can be accessed by clicking here.
In response to questions,
Madigan said that language in the bill included a state "guarantee"
to make its payments to the pension systems, but then acknowledged that future
General Assemblies could choose to circumvent that intent -- much like past
General Assemblies have shortchanged the pension systems or skipped payments,
the main reasons the pension systems are underfunded.
The state "guarantee" as well as a plan to start
making $1 billion payments to the Pension Stabilization Fund beginning in 2020
is tied to a reduction in the cost-of-living adjustment (COLA) in terms of
severability. [In other words], if the courts strike down the reduced COLA then
the funding guarantees also would be removed.
The bill includes four of the state's five pension systems,
the Judges Retirement System being excluded, Madigan said, because a court
challenge is expected and he wanted to relieve the judges of the
conflict-of-interest burden. The controversial cost shift is not part of SB 1,
but Madigan said he planned to bring that issue up as a separate piece of
SB 1 includes a new section (Section 7.5) that eliminates
pension benefits from collective bargaining. The bill also begins with a nine-page
preamble that seems to be laying the groundwork for the inevitable
constitutional challenges if the bill becomes law. Those nine pages lay out in
detail the fiscal problems facing the State of Illinois, an attempt to lay out
the foundation for an argument that the Illinois Supreme Court should overlook
the very clear pension protection language (Article XIII, Section 5) in the
Madigan on Wednesday predicted that "at least four" of
the Illinois Supreme Court's seven justices would uphold the language in the
bill, and Nekritz, speaking during the debate, said she thought proponents of
the bill had a strong case based on the courts balancing the pension protection
clause against the state's fiscal crisis.
Governor Pat Quinn praised passage of the bill in the House
saying, "Today the Illinois House of Representatives took the biggest step
to date towards restoring fiscal stability to Illinois. With the passage of
this comprehensive pension reform solution, Illinois is closer than ever to
addressing a decades-long problem that is plaguing our economy, our bond rating
and the future of our children."
If the bill passes the Senate, Quinn clearly would sign the
bill into law. Madigan predicted the next step would be a court challenge and
most likely a stay issued by the courts while the case over constitutionality
plays out over a period of time many observers think will be one to two years.
Diane L. Hendren
Chief of Staff/ Director of Governmental Relations
Illinois Association of School Administrators
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