Quick Hit Aricka Flowers Tuesday December 3rd, 2013, 5:15pm

Illinois Lawmakers Ram Pension Reform Bill Through, Labor Preps For Legal Fight (UPDATED)

The Illinois General Assembly passed a controversial pension reform bill Tuesday, and labor is now prepping for a legal fight.

The House voted in favor of the bill 62-53 and the Senate barely passed the measure with a 30-24 vote. The bill needed 30 votes to pass through the Senate.

State Sen. Linda Holmes (D-Aurora), who was the lone member of the ten-person, bipartisan conference that didn't vote for the bill to move out of committee said the state's pension debt is the fault of the state legislature — not public employees and retirees. She also pushed back against House Speaker Michael Madigan's (D-Chicago) assertion earlier today that the pension system was "too rich" for what the state to afford.

“I believe this was actually more caused by the fact that we as a state did not make our pension payments as we should have even though the employees worked and their full payments were made,” Holmes said. “So I think a lot of this problem stems from the fact that we actually didn’t do what we were obligated and should have done.”

The We Are One coalition, which vehemently opposes the bill, released the following statement in response to the bill's passage, which noted their readiness to take the issue to court:

This is no victory for Illinois, but a dark day for its citizens and public servants.  

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 in Senate Bill 2404.  

It’s bitterly ironic that, on the same day legislators used the state’s troubled finances to justify stealing the retirement savings of public servants, they approved millions of dollars in new tax giveaways for big corporations.  

A majority of legislators ignored and defied their oaths of office today—but Governor Pat Quinn doesn't have to. He can stay true to his oath and the legal promise made to public employees and retirees by vetoing this unfair, unconstitutional bill. If he doesn't, our union coalition will have no choice but to seek to uphold the Illinois Constitution and protect workers’ life savings through legal action.

Republican gubernatorial candidate and venture capitalist Bruce Rauner denounced the general assembly's vote in the following statement:

Springfield politicians today voted to slap a small bandage on an open wound. While it may help them temporarily feel better, it does little to fix the real problems facing Illinois. The pension system remains broken and badly underfunded. State spending has never been higher, or less productive. Another tax hike is looming around the corner. State government is in desperate need of reform. Our economy continues to suffer, and far too many Illinoisans remain out of work. The fact is after decades of career politicians running things in Springfield, expectations of what Illinois can accomplish are far too low. We can and must do better. I’ll shake things up in Springfield and deliver results that will truly bring back Illinois.

Meanwhile Gov. Pat Quinn is applauding state legislators for their passage of SB1.

Since I took the oath of office, I’ve pushed relentlessly for a comprehensive pension reform solution that would erase a $100 billion liability and restore fiscal stability to Illinois.

Today, we have won.

The people of Illinois have won.

This landmark legislation is a bipartisan solution that squarely addresses the most difficult fiscal issue Illinois has ever confronted.

This bill will ensure retirement security for those who have faithfully contributed to the pension systems, end the squeeze on critical education and healthcare services, and support economic growth.

I applaud House Speaker Mike Madigan, Senate President John Cullerton, House Minority Leader Jim Durkin and Senate Minority Leader Christine Radogno for their leadership and good-faith negotiations. I thank Senator Kwame Raoul and members of the conference committee for their hard work over the past six months.

I salute the members of the General Assembly who showed great political courage by voting yes for pension reform.

Among many provisions, the pension reform bill, which critics say is a "repackaged" version of Madigan's original SB1, is set to raise the retirement age by five years depending on the workers' age; could affect collective bargaining rights (taking many pension-related issues off the table), places caps on pensionable income; and allows some workers to opt out of the pension system in favor of a defined contribution system, which resembles that of 401k plans.

The bill will also reduce cost-of-living adjustments (COLAs). Under the new bill, COLAs would be calculated by giving retirees 3 percent of an amount for each year they have worked; placing a cap on future COLA increases at $800 or $1,000 for every year the employee has been on the job. The $800 or $1,000 depends on whether they collect social security. The plan also calls for up to five years of COLA holidays, depending on the pensioner's age. The full bill can be seen here.

Read more about the controversial pension reform bill here and check back with Progress Illinois for updates on this story.

UPDATE 1 (5:26 p.m.): Of the general assembly members running for the governor's mansion, State Sen. Bill Brady (R-Bloomington) voted in favor of the bill, while State Sen. Kirk Dillard (R-Hinsdale) voted against the legislation. Meanwhile Illinois Treasurer Dan Rutherford, who is also running in the Republican primary for Illinois governor, has said he opposed the bill and does not think it will pass legal muster.     

Here is the full list (PDF) of how lawmakers voted on the bill.

UPDATE 2 (5:33 p.m.): Quinn just wrapped up a press conference on the pension reform bill's passage. During the presser, Quinn said "it's up to the voters" when asked how the bill's passage will affect his chances at re-election. Quinn plans to sign the bill as soon as it gets to his desk, saying "Our number one challenge was to address pension reform. I look forward to signing the bill.

The governor also took the opportunity to tout what he believes have been his accomplishments in office.

"I was confronted with 3 major crisis: cleaning up corruption, economic recovery, and solving pension crisis ... we've done that," Quinn said.

Quinn also said he was going to "look into" receiving the five monthly paychecks he refused to receive until a pension deal was done.

UPDATE 3 (5:49 p.m.): Dillard has reiterated his concerns about the bill's ability's to withstand a legal challenge, according to a tweet by @BlueroomStream:

 

Comments

For generations the Democrats in the Illinois legislative body have given away from the states money to union pension requests and in return got the support and votes to get elected again and again.

Those legislators have retired or gone on to higher office. The teachers and public servants have moved on as well.

But the union collectively has remained and is now going to have to return the costs of all of the promises and agreements that never should have be done in the past.

You can't turn back the clock but you can repay the money that wasn't deserved - and the time has come to do that.

Bob Kastigar
IBEW Local 1220, Chicago

@ Bob - number 1, teachers and other union members would not likely vote for Republicans in the first place, so there was no need for Democrats to "buy" votes as you imply. No. 2 there were plenty of chances when Republicans had majorities in both houses & the Governor's mansion to pass reform, and didn't. No. 3 Rutherford is correct, there will probably be a successful court challenge to the reform as it doesn't meet the requirements as set forth in the Illinois constitution. No. 5 and most important, teachers are underpaid, they contribute over 20% of their compensation to the pension system, and will not collect social security when they retire, they do a necessary yet thankless job and they most certainly do deserve the modest pensions they receive, the State did not live up to its end of the contract and is therefore guilty of breaking it, they're trying to balance the books on the backs of the public sector workers (who did keep up their end of the contract), while giving millions in tax breaks to profitable corporations (sounds like Wisconsin to me).

@Bob: I'm surprised and disappointed to read these comments by someone claiming membership in a labor union. Bob, as a Union activist I've walked many picketlines in support of my sisters and brothers, including members of the IBEW. By repeating talking-points that might have been lifted straight from the Chicago Tribune you are, in effect, crossing our picket line. Public employees in Illinois have bargained in good faith with our respective employers for many decades and we have the right to expect that the employer kept its side of the bargain, which in this case, was to make its payments into the pension system - just as we did, with payments taken out of every paycheck. What we could not prevent was that the State of Illinois funded everything else - including the roads you use to drive to work, Bob - by using our pension system as a piggy-bank. We knew they were stealing our pensions and we took them to court but without result because the courts are biased against working people. No public employee would rejoice to see your employer steal your hard-earned pension or health benefits: you should not be doing the same to us.

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