House panel approves amendment making it harder to enhance pensions
Wednesday, April 18, 2012
Illinois House members could vote as early as today on a proposed amendment to the state Constitution that would make it more difficult to enhance pension benefits for public employees.
The House Personnel and Pensions Committee voted unanimously Tuesday to send the amendment, sponsored by House Speaker Michael Madigan, D-Chicago, to the full House.
If also approved by the Senate, voters could adopt the amendment during the November elections. Madigan’s plan would require a three-fifths vote of the General Assembly to approve any bill that enhances pension benefits for workers covered by the five state-funded pension systems.
The supermajority requirement also would apply when local governments consider bonuses or other financial benefits that would enhance employees’ pension benefits.
“Some people will say this is real tough medicine. It is.” Madigan told the committee. “The (pension) record would say we need this medicine.”
Illinois has the worst-funded state pension systems in the country. Together they have a debt of more than $83 billion in obligations owed by the systems, but not covered by their assets.
Many public employee unions oppose the amendment, including the American Federation of State, County and Municipal Employees, the largest union representing state workers.
“This is the wrong medicine for the disease,” said AFSCME executive director Henry Bayer. “The failure is one to properly fund the pensions.”
State officials for decades have used money that could have been used to support state pensions for other purposes. It’s considered the major reason the pension systems now face such a large deficit. But Rep. Elaine Nekritz, D-Northbrook, said the amendment is still needed.
“In addition to the underfunding, which clearly is the largest portion of the problem, there have been benefit enhancements and things that have caused problems over the years,” she said.
Madigan said the amendment could get a vote by the full House as early as Wednesday. If it gets on the ballot, it will pass, he predicted.
“I think the people will approve this,” he said.
Lawmakers and Gov. Pat Quinn also are expected to recommend changes to state pensions designed to cut costs. Madigan Tuesday again indicated support for shifting some pension costs for downstate teachers and university workers to schools instead of the state.
“If you look at the current (state pension) payment, 78 percent of the payment goes to two systems where the members never worked for the state of Illinois,” Madigan said, referring to the Teachers Retirement System and State University Retirement System. “There’s got to be a sharing of the cost.”
Downstate school districts fear that shifting pension costs to them will force serious cutbacks in other areas, including education programs.
Nekritz, Madigan’s representative on a working group trying to control pension costs, said that if overall pension costs can be reduced, the expense to school districts may be 1 percent to 1.5 percent of their payrolls. She said many districts should be able to absorb that cost.
Nekritz declined to be specific about other possible pension recommendations.
“What we don’t want to do is be in a position where we’ve made a proposal and then some flaws are pointed out and we are locked into something we don’t really want to be locked into,” Nekritz said.