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May 30, 2013
By: Doug Finke

The Illinois Senate resoundingly defeated a House pension reform plan Thursday, leaving the debate on the issue wide open as the legislature lurches into its final scheduled day of the spring session.

Senators voted 16-42 on the plan supporters said would save the state billions of dollars, but which opponents predicted would be struck down by the courts. Senate Bill 1 got seven fewer votes than a very similar pension reform bill got in the Senate when it came to a vote in March.

After the vote Thursday, the leading reform plan still on the table is a Senate plan that gives workers a variety of choices for changing their pension benefits. That bill passed the Senate with 40 votes earlier this month. It has remained in the House Rules Committee ever since. House Speaker Michael Madigan, D-Chicago, has given no indication he is willing to call the bill for a vote.

Senate President John Cullerton, D-Chicago, also has indicated the Senate could consider three separate pension reform measures the House passed in March. However, there is no sign any of those bills would pass in the Senate.

The bill the Senate defeated Thursday made changes to pensions for downstate teachers, university workers, state employees and lawmakers. It reduced the annual cost-of-living adjustments to pension benefits, raised the retirement age by three to five years depending on a person’s age, capped the salary on which pensions would be based, and raised the contributions required of workers.

Actuaries determined the bill would save the state $187 billion in pension payments over 30 years. It also would cut the state’s $97 billion pension debt by about $22 billion.

“It is the most comprehensive (pension reform bill) we’ve seen,” Senate Minority Leader Christine Radogno, R-Lemont, said. “It’s the only bill that will save the pension systems. Retirees are worried, and they should be, that if we don’t take care of this problem, they may go to the mailbox one day and not have a check they were expecting.”

“If we don’t do something of this magnitude, you’re lying when you say to (retirees) they can rely on that check,” Sen. Matt Murphy, R-Palatine, said.

Murphy also urged senators — who just struggled to put together another state budget — to consider what could be done if the state cut its pension contribution by $1 billion to $2 billion by passing the House plan. Pension contributions from the state are steadily increasing and diverting money from other programs.

However, Sen. Linda Holmes, D-Aurora, said the better pension reform plan was the one the Senate passed that was negotiated with public employee unions. The House version is unfair to workers, she said.

“It takes away from the people we made promises to,” Holmes said.

Others said the bill is patently unconstitutional because it violates the clause that protects against diminishment of pension benefits. Cullerton and others have said the only pension reform likely to survive a court challenge is one that gives workers a choice.

“It is a fool’s errand this bill,” Sen. William Haine, D-Alton, said. “You will waste another year and another $1 billion.”

Gov. Pat Quinn said the Senate should reconsider its vote.

“The people of Illinois were let down tonight,” Quinn said in a statement. “Failure to send me comprehensive pension reform bill hurts our economy and costs Illinois taxpayers $17 million a day. I urge the Senate to reconsider tonight’s vote.”

Sen. Bill Brady, R-Bloomington, was the only Springfield-area lawmaker to vote for the bill. Sens. Andy Manar, D-Bunker Hill; Sam McCann, R-Carlinville; and John Sullivan, D-Rushville; all voted against the bill.

The three individual pension reform bills pending in the Senate were passed by the House in March as a series of test votes to gauge support among representatives for pension changes. One raises the retirement age and another limits the salary on which pensions are based.

The third bill limits cost-of-living adjustments to retiree benefits. Currently, retirees receive a 3 percent compounded annual increase in their pension benefits. The bill the House approved limits that 3 percent increase to the first $25,000 of pension income. After that limit is hit, retirees will get only a flat $750 annual increase in benefits.

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