Illinois closer to solving state pension crisis
Fri, 03 May 2013 14:03:19 GMT —
The Illinois House of Representatives has approved a massive overhaul of state pensions.
It's the first time the House has passed such a plan after more than a year of negotiating and many failed attempts over the years.
House lawmakers approved the plan with a vote of 62-51 Thursday.
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The plan would require most public employees to work more years before retirement. It also reduces the annual cost-of-living increases on pensions and requires state employees to pay 2 percent more toward their own retirements.
Illinois has nearly $100 billion in unfunded pension debt.
Governor Pat Quinn praised the vote, but hasn't said whether he'll sign it.
Gov. Quinn said Thursday Illinois House lawmakers took the "biggest step to date" toward restoring the state's financial stability.
The proposal is sponsored by House Speaker Michael Madigan. It requires Illinois to guarantee that it would make its required contribution every year.
Madigan says he expects his legislative proposal to reform the state's pension systems will trump all others and reach the governor's desk. Madigan's remarks Thursday followed House lawmakers sending the speaker's comprehensive pension-reform plan to the Senate on a 62-51 vote.
The measure now goes to the Illinois Senate where President John Cullerton has his own ideas on ways to reform the pension system. Cullerton is proposing an alternative plan to solve Illinois' $97 billion pension crisis. He has being negotiating a solution with union leaders.
Still, Madigan says he expects the Senate to approve his bill. Madigan acknowledges that the difficulty in passing his bill in the House came from opposition from unions and retirees. He says he doesn't expect Cullerton and unions to reach such an agreement that would persuade legislators to back away from his bill.
Rep. Elaine Nekritz says the Illinois House does not have a "Plan B" should the courts rule a comprehensive pension-reform plan is unconstitutional. Nekritz is a Democrat from Northbrook. She has worked for years to address Illinois' $97 billion pension crisis.
The legislation requires employees to contribute two percent more of their earnings to their pensions. They would also have to delay retirement and accept less-generous annual cost-of-living increases.
Members of the American Federation of State, County and Municipal Employees do not think pension benefits should be reduced.
Opponents say the bill is unconstitutional because it diminishes the benefits of existing retirees. They have vowed to challenge the bill in court should Gov. Pat Quinn sign it into law. Nekritz believes the Illinois Supreme Court could be swayed by the state's desperate financial situation.