Legislature passes 'historic' pension vote

December 2, 2013

WBEZ/Tony Arnold
Jennifer Edwards, a retiree from the University of Illinois-Chicago, rallied outside some Illinois House members’ offices Monday to encourage them to vote against a pension overhaul plan set for debate on Tuesday.

Illinois lawmakers Tuesday passed a deal on pension reform proposal that’s been developing for about three years.

The House voted 62-53 in favor of the plan, sending it to Gov. Pat Quinn, who has said he will sign it. The Senate approved the measure 30-24 just minutes earlier.

"There will be changes here, much-needed changes, but this bill is a well thought out, well-balanced bill that deserves the support of this body, the state Senate and the approval of Gov. Quinn," House Speaker Michael Madigan said at the start of the House debate. "Something's got to be done. We can't go on dedicating so much of our resources to this one sector of pensions."

Public employee unions, who oppose the bill, vowed to quickly take legal action. They say the legislation is unfair to workers and retirees who for years made faithful contributions to retirement systems but now will see benefits cut because of government mismanagement. They also argue parts of the measure are unconstitutional.

"This is no victory for Illinois, but a dark day for its citizens and public servants," the We Are One Illinois union coalition said in a statement soon after the votes. "Teachers, caregivers, police and others stand to lose huge portions of their life savings because politicians chose to threaten their retirement security, rather than pass a much fairer, legal, negotiated solution ..."

It comes after the leaders of the state Democratic and Republican parties in the legislature said last week they had reached a long-awaited agreement on how to structure the state pension funds for the next 30 years.

The announcement also prompted a call to arms by organized labor groups, who immediately started fiercely mobilizing against the measure under one umbrella organization. These opponents say the plan punishes workers for the state’s financial problems.

Illinois Democratic Gov. Pat Quinn on Monday said lawmakers’ scheduled action on the packaged pension deal will be one for the ages at the Capitol.

“This is a historic vote,” Quinn told reporters during an appearance in Chicago. “Probably the most important fiscal vote a member of the legislature will ever take in their lifetime in the legislature.”

Quinn made addressing the problems of state’s pension system his top legislative priority during his current term as governor. The four retirement funds in question, which cover legislators, university employees, suburban and downstate teachers, and other state workers are all underfunded. Those pushing for changing the benefit structures often say Illinois’ retirement funds are the worst-funded systems in the country.

In that time, Quinn has said he’d start a grass-roots campaign around the theme of pension reform. He unveiled a series of videos (including one featuring a pensions mascot and a explainer video produced by the Khan Academy educational website). And, for several weeks earlier this year, he suspended the paychecks of lawmakers and himself to pressure them to pass a plan he supported. A Cook County judge eventually allowed legislators to collect their checks, but Quinn has still rejected his own until he signs a pension measure into law.

But negotiations have been slow, and all of Quinn’s campaigning behind the issue alienated a group of big potential Democratic campaign supporters ahead of his bid for re-election next year. Labor groups rallied at various lawmakers’ district offices Monday to encourage them to vote no on Tuesday.

“We feel that cutting our pensions that we paid into is wrong,” said Jennifer Edwards, a retiree from the University of Illinois-Chicago who rallied with a small group outside the office of State Rep. Christian Mitchell, D-Chicago. “They need to figure out some other way to handle it. We paid in and we want our money.”

“I don’t think this bill’s going to pass,” Henry Bayer, president of the American Federation of State, County and Municipal Employees, said Monday on WBEZ’s The Morning Shift. “We’re doing everything we can to stop it. But if it should pass, it’s gonna be challenged in court and if it gets overturned in court, it will not save the taxpayers of Illinois one dime. We’ll be right in the same predicament we’re in today.”

Meantime, the political reality behind Tuesday’s pension vote is also present on the Republican side of the aisle.

“You hear folks on the Republican side saying, ‘Well this is not enough. Vote no. Let chaos reign. And then let a new governor come in,’” said state Senate Republican Leader Christine Radogno. “ I think that is manipulating it for political purposes as well.”

Of the four Republicans challenging Quinn for governor, only state Sen. Bill Brady has said he supports the proposal. State Treasurer Dan Rutherford said he does not think the plan is constitutional. State Sen. Kirk Dillard said he wants hearings into the proposal. And venture capitalist Bruce Rauner sent an email to supporters Sunday saying the bill does not save enough money.

The legislative leaders who support the bill say it will save the state $160 billion over 30 years. It does that in large part by adjusting the increases retirees get to keep up with cost of living. The proposal would tie annual increases to inflation, rather than keep it at a set percentage rate.

The bill also requires employees to pay less into their own retirement system as a consideration for cuts to other parts of their benefits. It calls for increasing the retirement age for younger workers and establishes a funding schedule for the next 30 years.

The bill would also remove many pension matters from the collective bargaining process with labor groups, and it allows a limited number of certain employees to enter into a retirement plan that looks more like a 401(k). It also calls for a so-called funding guarantee, which says a pension system can utilize the courts to make the state pay into the fund.

Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold.