New proposal could help spur Illinois pension deal

Originally Posted Online: Dec. 04, 2012, 5:00 pm
Last Updated: Dec. 05, 2012, 8:33 am
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SPRINGFIELD, Ill. (AP) — Lawmakers will have a new proposal to consider for fixing the state's multibillion-dollar pension crisis when a group of lawmakers introduce new legislation Wednesday, but it likely won't be clear until next month whether the new approach can help break a yearslong stalemate on the issue.

The new legislation — to be proposed by Rep. Elaine Nekritz, a Democrat who chairs the House Pension Committee, and about a dozen colleagues — is aimed at reducing the state's unfunded $95 billion liability by raising employee contributions, introducing a tiered retirement age and phasing in a plan to share costs with school districts.

The proposal would have to overcome lingering partisan divisions over the issue in Springfield, and it was unclear if it would get the support of Gov. Pat Quinn and Democratic legislative leaders who hope to have a solution in the works for the Legislature's planned lame-duck session in January.

A spokeswoman for the governor, Brooke Anderson, would say only that the new plan is "a welcome contribution."

Illinois' pension crisis is among the worst in the nation, but lawmakers have been unable to agree on sweeping legislation needed to fix it. Negotiations broke down last spring over a proposal to make the state's school districts pick up their own employees' pensions costs, and no progress was made at a later special session called by Quinn.

Nekritz would not comment on the details of the new proposal, described in a news release from her office as offering "a balanced plan to simultaneously bring state pension costs under control for the long term and provide retirement security for hundreds of thousands of state workers and teachers."

But Rep. Mike Zalewski, another Democrat involved, said it would require employees to contribute 2 percent more to their own retirement funds. It also would create a tiered system for retirement age eligibility: Older workers would be able to retire at the same age at which they are currently eligible, while younger employees would have to work longer.

The proposal shifts some of the cost of teachers' retirement contributions to school districts, but the shift would be phased in over time.

"I asked myself (when considering the proposal) 'Is this something workers can live with?'" Zalewski said. "Ultimately, I'd say it is."

Republicans and a few Democrats have opposed that cost shift in the past, saying local districts would have to raise property taxes in order to take on the added financial burden.

The plan being negotiated last spring from Quinn and Democratic legislative leaders had called for reducing the state's annual pension costs by cutting pension benefits, despite union opposition. It also limited the 3 percent cost-of-living increase for retirees, compounded annually, to 3 percent or half the rate of inflation, whichever is lower. The increases would not be compounded.

Wednesday is the final day of the fall veto session, so any progress on pensions wasn't expected until the first week in January. That's when the current General Assembly will reconvene for its final days before a new group of lawmakers is sworn in Jan. 9, creating a short window in which several dozen lame-duck legislators can vote without worrying about re-election.

Quinn has said he wants to get a deal on a pension fix by that date, and his office has said repeatedly that pension reform is his top priority. A spokesman said last week Quinn and his staff have been meeting with lawmakers to try to secure support, and the governor's office recently unveiled a grassroots campaign to garner public support for reforms.


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