Illinois lawmakers fail to approve pension overhaul

llinois lawmakers failed to address the state's massive pension problem Friday

August 18, 2012

Associated Press

Illinois lawmakers failed to address the state's massive pension problem Friday but did expel a legislator over bribery charges during a day of frustration for officials in a state government already burdened by a reputation for paralysis and corruption.

Even the gesture of cutting just legislators' retirement benefits failed to unite lawmakers. Democrats called it a first step, Republicans called it a political stunt and the measure was shelved.

"We all look like idiots," said Rep. Daniel Biss, D-Skokie. "We all — not the governor, not the other side, not our side — we all look like idiots."

Gov. Pat Quinn, who called legislators into special session to address fast-rising pension costs, said he was disappointed by the failure. He largely blamed Republican leaders, saying they "sabotaged" every proposal offered.

The Chicago Democrat said he plans to build public pressure on legislators by reaching out to taxpayers, civic leaders and businesspeople.

"We're going to bring together the people of our state in a mighty way," he said.

Republicans rejected blame, instead accusing Quinn of doing little to push negotiations and other Democrats of intentionally trying to stall progress — for instance, by insisting on a provision that would shift some pension costs to schools.

"I think what has happened here has been orchestrated chaos to make sure that nothing happens," said Senate Minority Leader Christine Radogno, R-Lemont. "It's a catastrophic failure of leadership."

Earlier Friday, the House voted to oust Rep. Derrick Smith, D-Chicago, who faces federal charges of accepting bribes.

The twin images of finger-pointing politicians and a disgraced lawmaker seemed to sum up the recent history of state government: Two governors sent to prison, stubborn budget troubles, billions of dollars in unpaid bills, periods of intense partisanship.

For years, the state has failed to contribute enough money to the retirement systems for state employees, university staff, elected officials and downstate and suburban Chicago teachers. That, combined with a poor economy, has left the systems about $85 billion short.

Trying to reduce that gap each year eats up state government's limited funds, leaving little for other needs. Plus, bond-rating agencies are threatening to lower the state's credit rating yet again, which would make it more expensive to sell bonds for road construction and similar projects.

State leaders want to reduce annual payments by cutting benefits. Future retirees would see their pensions grow more slowly, instead of the current 3 percent increase compounded annually. Employees who reject that offer would lose their state-subsidized health insurance and not get any future raises included when their pension checks are calculated.

Public employees' unions vigorously oppose pension cuts as both unconstitutional and unfair to workers who, unlike the state, have always made contributions to the pension systems. The idea seems to have widespread support at the Statehouse, however.

But the two parties are split on what to do about teachers. Democrats want downstate and suburban Chicago school districts to start paying the employers' share of pension costs for teachers, instead of having the state pay. Republicans object, predicting major property tax increases if that were to happen.

In negotiations Friday, Democrats offered variations that would sidestep the school issue by leaving out the Teachers' Retirement System for now, but Republicans rejected anything that wasn't comprehensive. For their part, Democrats insisted that any comprehensive approach include shifting pension costs to schools.

When it became clear there would be no significant action, Democrats proposed a bill that would apply only to legislators and some of their staff. It was supposed to slow the growth in pensions for current legislators and end pensions entirely for all future legislators.

The proposal's backers said it would start the process and demonstrate that legislators will share in the financial pain. Noting that the proposal would save only $111 million over the next three decades, Republicans called it political cover for Democratic inaction.

The idea got only 54 votes when it was added to an existing bill, far short of the 60 needed to send it to the Senate. There was no final vote.

"Demand that we stay here," Rep. Mike Bost, R-Murphysboro, urged his colleagues. "Demand that we fix the problem instead of playing these political games that continue to go on in the state of Illinois to the point that people around the nation laugh at us."