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October 2, 2013
By: Bernard Schoenburg

Illinois Senate President John Cullerton said Wednesday he’s working to build support for a compromise pension reform plan that would save $138 billion over 30 years.

“There’s a compromise that we’re talking about right now,” Cullerton told the editorial board of The State Journal-Register. But he said that while the legislative pension reform committee  worked to develop and evaluate the plan, that group has yet to reach agreement.

The Chicago Democrat said he supports the plan, adding that he hopes it can be acted on during the veto session scheduled to begin Oct. 22.

Elements of the compromise include having what is now a 3 percent compounded cost of living adjustment added to pension payments changed to half of the Consumer Price Index. Cullerton said the COLA couldn’t drop below 1 percent.

“It has a ceiling of 4 percent,” he added, “which is important because if there is inflation, there could be an actual opportunity for people to … get more than they’re getting now.”

Estimates are that the proposal would have state pension funds fully funded by 2043.

The proposal would also decrease active employee contributions by 1 percentage point.

“It’s not that much money in the big picture in terms of the savings,” Cullerton said of that drop in employee contributions.

The combination of reduced employee contributions and “inflation protection” afforded by allowing the COLA to potentially rise to 4 percent,  Cullerton said, could solidify the argument that the plan meets requirements of the state constitution, which doesn’t allow pension benefits to be diminished.

‘Less unconstitutional’
During the spring legislative session, Cullerton had backed a plan, Senate Bill 2404, that he says would save $58 billion over 30 years and would have provided such “consideration” by requiring active and retired public workers to choose among options for raises and health insurance.

Cullerton said Wednesday that Senate Bill 1, which passed the House but only got 16 votes in the Senate, “had none of that.” He said that proposal, which was backed by House Speaker Michael Madigan, D-Chicago, would have saved $163 billion over 30 years.

The proposal now on the table, he said, is “less unconstitutional than Senate Bill 1.”

Cullerton said he expects unions, who had agreed to SB 2404, to oppose the hybrid plan now on the table, and added that it could end up challenged in court.

“That’s fine with me, because if it were to pass and be ruled unconstitutional, “we go right back to the bill we passed that the unions supported, tweak it some more, get some more savings — that’s my opinion — and then pass that.”

The proposal would need 30 votes this fall to take effect July 1.

“Hopefully, I can get to 18,” Cullerton said of Democrats in the Senate. That would mean, he said, that the GOP would have to provide at least 12 votes.

Incentives for ADM?
Meanwhile, Cullerton said he would like to see the corporate headquarters of  Archer Daniels Midland Co. stay in Illinois.

ADM officials recently announced the agricultural giant wants its headquarters to have better access to global customers than Decatur, it’s current corporate home, provides.

Cullerton said Illinois has a much better-educated workforce than surrounding states and a good transportation system, and if ADM moves, “Chicago is a great spot to think about.”

“Whether we should incentivize them is another question,” Cullerton said, noting Decatur’s high unemployment rate. He said any tax incentive should be tied to doing something to “make up for that loss of jobs in Decatur.”

ADM has said it would keep a workforce of 4,400 in Decatur, and that the corporate headquarters would employ about 100 people.

Cullerton noted that other businesses, including Sears, have been given state incentives to stay in Illinois, even though they changed locations.

“Lookit, that’s the game we’re in,” Cullerton said. “You have to play. Every state can offer incentives.”

Bernard Schoenburg can be reached at 788-1540. Follow him via

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