May 7, 2013
By: Benjamin Yount (submitted by Bill Smith)
SPRINGFIELD – Illinois’ public sector unions, and the state’s Democratic Senate president, are trumpeting a new pension reform proposal.
Senate President John Cullerton unveiled the plan backed by Illinois’ major public sector unions, chief among them the American Federation of State, County, and Municipal Employees, Monday evening.
The proposal is vastly different than a plan from Illinois’ top Democrat, House Speaker Mike Madigan, which cleared the other half of the General Assembly last week.
Here are the five things you need to know about the union plan.
Cullerton said the union-backed plan will save about $46 billion over the next 30 years, and close to $850 million next year alone. The House plan would save nearly three times that, saving just under $150 billion over the next few decades. But Cullerton said if the courts strike down the House plan, Illinois saves nothing.
Illinois needs to save as much as it can on pensions. The state’s five retirement systems are the worst in the nation. Illinois owes nearly $130 billion, and will pay close to $8 billion for pensions next year.
Cullertton has said for months that the only way Illinois can reform its pensions is to give public workers a choice. The union-backed plan gives employees a number of choices.
Workers can choose lower cost of living adjustments but keep their access to state health insurance and have all raises and salary increases added to their pensions.
Or workers can keep their existing three percent, compounding COLA in exchange for giving up access to state subsidized health care and not see their salary increases added to their pensions.
Or workers can choose to delay their COLA’s, pay two percent more toward their retirement and keep both their access to health insurance and their raises.
The House plan would impose COLA reform on all employees, force workers to pay two percent more for their pensions, and require some workers to stay on the job longer.
Illinois’ constitution protects public worker pensions, which is why it has been so tough to reform them.
Cullerton insists the union plan, and its choice component, is constitutional.
It may, or may not be. But the courts will not decide.
Cullerton said the unions have promised not to sue the state if the choice plan becomes law.
“We must calculate the risk associated with passing a plan that could save zero if the court throws it out. We need to remember that the unilateral approach is a gamble,” Cullerton said in a statement. “Betting against the constitution is risky.”
The union plan, as anyone would expect, is much softer on public employees than the legislation from the House.
Cullerton insists that giving employees a choice will make it easier to reform pensions.
“The unions are supportive of this bill, they will lobby for it,” Cullerton added. “Virtually every Democrat…will support this.”
Cullerton said the swift movement from the House drove the unions to the bargaining table.
The House approved its pension reforms last Thursday, the unions leaked word of their proposal the next day.
While the Senate President sounds confident, Illinois’ public sector unions sound defiant.
“This agreement is our coalition’s bottom line,” Mike Carrigan the head of Illinois’ AFL-CIO and the We Are One Illinois Coalition said Monday. “The union coalition has made a great effort to ensure fairness for the public employees and retirees who did not cause this problem, to ensure the stability of the pension systems.”
The union coalition has said in the past that Illinois should raise taxes before it looks to cut pension benefits.
But the bottom line may be that the unions are stalling.
Madigan, last week, accused AFSCME chief Henry Bayer of trying to delay pension reform by dragging out negotiations.
Cullerton said he hopes to call the union backed plan for a vote Thursday.
Illinois lawmakers have set a May 31 deadline to agree on pension reform, and send it to Gov. Pat Quinn.
Copyright 2013 Evanston Now LLC
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