Quinn wants pension reform this year

Wednesday, January 11, 2012

Gov. Pat Quinn said Tuesday he will jump into the fight over how to reform Illinois’ pension system.

“Our rendezvous with pension reality will come this year,” Quinn told reporters at a Chicago news conference. “This is a major mountain to climb, and I’m willing to lead the expedition. We’re going to get this done once and for all.”

The governor pledged that pension reform would be done in a “fair and constitutional manner.”

Quinn's statement echoes those made in recent weeks by Senate President John Cullerton, indicating the two Democrats want an alternative to a proposal sponsored last year by House Minority Leader Tom Cross, R-Oswego, and House Speaker Michael Madigan, D-Chicago.

Cross’ proposal, which is backed by Chicago’s top business leaders, would create a three-tiered pension system and sharply increase contribution rates for public workers who want to stay in the first tier, a defined benefit plan that covers the vast majority of state workers today.

Quinn said he would model his working group after a panel convened by Senate Democrats last year that produced a bill that streamlined the process for firing teachers and made changes to other education laws. That group included teachers’ unions, principals, education reform groups, lawmakers and others in the education community. It produced a nationally praised law signed by Quinn earlier this year.

No prejudgments

The governor wrote the four legislative leaders on Monday asking them each to appoint one representative to the committee.

Signaling the importance of the issue to him, Quinn appointed senior adviser Jerry Stermer, a close confidant and the governor’s former chief of staff, to lead the group.

“We’ll look at the whole subject together. I think it’s important not to say what we’re going to do until everybody has a chance to speak,” Quinn said.

Quinn did hint at one possible component of a plan – shifting the costs of teacher pensions to school districts instead of the state, which pays nearly all of the employer share today.

“About 21 percent of what the state puts in … is for state employees,” Quinn said. “More than half of the money we contribute every year is for teachers who are outside of the city of Chicago – suburban and downstate teachers.”

Cross warned that shifting costs to school districts and universities alone won’t solve the problem.

“That’s not reform,” Cross said. “It’ll result in perhaps a local property tax increase. It’s a different way to pay for it,” Cross said.

AFSCME: Real problem underfunding

But cost-shifting could be an element of any reform package, he said.

“The school of thought would be that it gives school districts a little skin in the game … they will have to analyze what they do for pay raises, both during and at the end of (teachers’) careers,” Cross said.

Anders Lindall, spokesman for the American Federation of State County and Municipal Employees, said the union welcomes the governor’s plan “if it is focused on the real problem,” which is successive governors and legislatures failing to fund the systems properly.

“Our union and our partners in the One Illinois coalition have been urging a collaborative process for a very long time,” Lindall said. “It’s critical to understand ... the real problem in Illinois public pensions is not benefits but funding.”

Cross also said the governor’s involvement is welcome.

“He’s a little late to the game, but assuming it’s real and not an exercise to delay, I’m glad he’s here. I’ve always said this needs to be done in a bipartisan way,” Cross said.