Legislators review vote on pension reform las
by CYRYL JAKUBOWSKI
All but two Northwest Side legislators supported the bill reforming the state’s pension system, with opponents of Senate Bill 1 saying they thought it was unfair and illegal under the state Constitution to reduce retirees’ benefits.
The measure was approved 30-24 with three legislators voting present in the Illinois Senate and 62-53 with one legislator voting present in the Illinois House of Representatives. Quinn signed the bill on Dec. 5, and it will go in to effect on June 1.
The plan covers the retirement systems of state employees, teachers excluding employees from Chicago, state university employees and the General Assembly.
Workers age 45 and younger will have to work longer to qualify for retirement. For each year an employee is younger than age 46 the retirement age will increase by 4 months. The automatic 3 percent compounded annual increase in retirement income will be replaced by a system based on years of service and tied to inflation.
Current liability will be reduced by about $21.4 billion when the plan takes effect, and long-term liability will be reduced by estimated $160 billion, according to an analysis provided by state Representative Greg Harris (D-13).
Harris said that the bill was passed after years of discussion and many proposals. He said that the underfunded pension system, the increasing outlay of general revenue funds to meet obligations and the ability to pay benefits to current and future retirees were the driving factors behind the bill.
Harris said that provisions in the bill regarding cost-of-living increases, funding guarantees and the funding schedule cannot be separated and would be struck down if any or all are found unconstitutional by the Illinois Supreme Court.
State Representative John D’Amico (D-15) said that he voted for the bill because it will preserve the state’s pensions.
"If we did nothing we would lose them in the long run," D’Amico said. "I’m not a constitution lawyer and I’m not sure what will happen with this if it gets challenged, but I want to preserve pensions.
"This did not happen overnight but through years of mismanagement. Everybody sacrifices, but I’m glad that we preserved the low-income pensions as well. We all understood that this was a tough vote."
State Representative Robert Martwick (D-19) said that he voted against the bill because it removes collective bargaining rights from public employees. Martwick also said that the bill fell short of what was needed to accomplish fair reform.
"In every bill there are challenges, and I wanted to vote yes, but I just could not get myself there because there were several flaws with this bill," Martwick said. He said that employees who have contributed to the pension system for years should have had a seat at the negotiating table.
Martwick said that former governors and legislators who skipped pension payments and borrowed against the system created the pension crisis. He said in a statement that when he ran for office he promised that he would demand that public employees who were without fault would be given the respect that they earned a seat at the negotiating table. "They were not," he said.
Martwick said that details about the bill were not released to the legislators until less than 24 hours before they were scheduled for a vote last week.
"It was sent to me at 2:51 p.m. on Dec. 2, and we are beginning discussion at 8:39 a.m. the following day," Martwick said. "From a philosophical standpoint, there is something wrong when the leaders think that if they debate something enough it won’t pass so lets just ram it through."
"I understand that they have been talking about this forever and some things did not need to be discussed again, but it is still a part of the process," Martwick said. "I am disappointed with the negotiations. I understand that negotiations are tough and it’s hard to reach consensus, but we needed to stick to the process."
"Ultimately I think that this pension reform is taking money away from peoples’ pensions," Martwick said. "We loaded busloads of people to protest (Wisconsin) Governor Scott Walker, and we do this now? I am fundamentally in disagreement with taking away peoples’ pensions."
Martwick also said that the legislation could harm the state’s university system because it will be difficult for the universities to attract and retain top professors and researchers.
The other Northwest Side legislator who voted no was state Senator William Delgado (D-2).
State Senator John Mulroe (D-10) said that his office received a lot of angry feedback from constituents after he voted in favor of the bill.
"It has been pretty tense," Mulroe said. "I’m not a very popular guy at the moment, and it’s not so much the angry sentiment from the teachers but from retirees who will get hurt.
"It was a difficult vote. The pension system was heading in the wrong direction and we could not do nothing."
Mulroe said that he is unsure what will happen when the bill is challenged in the courts. "I don’t think that deep down I would have voted for it if I truly thought it was unconstitutional," he said. "It’s just this grimy process we call democracy that we have to grind through to get to the right solution."
"Its very uncomfortable to talk about this bill because we are taking away funding from people when they were promised something," Mulroe said. "We over-promised as a state, and it’s breaking people’s hearts."
State Senator Heater Steans (D-7) said in a statement that arriving at a yes vote was not easy.
"Action on the pension crisis is necessary now to assure the long-tem health of state pension systems and to alleviate the extreme budgetary pressures that has prevented schools and human services from being adequately funded, endangered the affordability of a college education and necessitated reductions in the state work force, despite the temporary tax increase I supported," Steans said.
"Illinois is moving forward," Quinn said in a statement. "This is a serious solution to address the most dire fiscal challenge of our time . . . Working together, we will continue to build a brighter future for the people of Illinois."
The bills were sponsored by state Senator Kwame Raoul (D-13) and House Speaker Michael Madigan (D-22).
"I was convinced that standing fast for substantial savings, clear intent and an end to unaffordable annual raises would result in a sound plan that will meet all constitutional challenges," Madigan said.
"I applaud the governor for prioritizing this issue," Senate President John Cullerton (D-6) said. "I look forward to working with him and all legislative leaders to ensure that we continue on this path of fiscal leadership and bipartisan cooperation."
Under the law, the state will adopt a funding schedule that requires level payments and achieves 100 percent funding no later than the end of fiscal year 2044. The law includes a funding guarantee that gives the retirement systems the right to go to court if the state fails to make the required payment to its pension fund.
There will be no reductions in pension checks going out to current retirees, and the law is designed to minimize the effect on lower-earning and longer-serving employees.
Current employees will see cost-of-living adjustment pauses every other year after retirement, with the number of pauses determined by their current age. The law also reduces the amount of money current employees pay into their pensions by 1 percent, and there will be increases in retirement age based on the age of the employee, with a maximum increase of 5 years.