Gov. Quinn signs pension reforms into law

Wednesday, April 14, 2010

Gov. Pat Quinn said he’s not inclined to accept any changes to a series pension reforms he signed into law Wednesday.
Following a signing ceremony in his Capitol office, Quinn also shot down suggestions raised by some that the state should go even further and change benefits for employees already on public payrolls. The changes Quinn signed Wednesday apply only to workers hired after Jan. 1, 2011.
“That’s the wrong way to go because it’s unconstitutional,” Quinn said.
Quinn signed into law Senate Bill 1946, which raced through the General Assembly in a matter of hours last month. The bill changes a number of pension benefits, including raising the retirement age, limiting pension raises, capping the maximum benefit and prohibiting someone from drawing a public pension while working another public job.
The changes affect all five of the state-funded pension systems -- for state employees, downstate teachers, university workers, lawmakers and judges
Senate Minority Leader Christine Radogno, R-Lemont, supported the changes in the bill, but said the state should do more.
“I know there’s differing opinions as to whether or not we can impact current employees,” Radogno said. “I think we owe it to the state of Illinois to fully flesh out that argument.”
The Civic Committee of the Commercial Club of Chicago said it has determined that benefits for current employees could be changed, but only for future benefits. Any benefits earned up to that point could not be reduced.
But Quinn produced former Illinois Appellate Court Justice Gino DiVito to back his assertion that would be unconstitutional. DiVito said he and a colleague “reached the undeniable conclusion that the pension benefits of present employees, those who belong in a pension plan, cannot be diminished or impaired. All the General Assembly and governor could do is affect the pension benefits of future employees.”
Quinn also said he will resist any efforts to tinker with the pension reforms. Some lawmakers have suggested that parts of the bill should be revised – like the retirement age for teachers – while preserving other reforms.
“The framework we’ve enacted is the basic framework,” Quinn said. “I’m not interested in rolling back something that we just signed into law today.”
Sen. Bill Brady of Bloomington, Quinn’s Republican opponent for governor, wants to go even further and put new employees into a 401(k)-style retirement plan.
“I don’t think that’s the right way to go,” Quinn said. “I think he’s wrong about that.”
The state expects that the five state-funded pension systems will be 90 percent funded by 2045. Because of the changes, the state will cut its pension obligations by $220 billion over that time. In next year’s state budget, officials expect the savings will be worth $400 million.
Quinn said he will resist the temptation to book greater savings into next year’s budget.
“It’s important, given the history of this issue, to be conservative,” Quinn said.
What people are saying about the pension changes signed into law Wednesday.
*“This is a historic occasion for our state and indeed for our whole country. This is the most far-reaching bill of its kind in the United States.” Gov. Pat Quinn
*“The changes for some people might be apparently painful, but it’s the right thing to do.” Senate President John Cullerton, D-Chicago.
*“This is really a good first step in setting our state finances on the right track. I think we can still do some more with pension reforms.” Senate Minority Leader Christine Radogno, R-Lemont.
*“In the (budget) office, you have to get used to dealing with some big numbers, but this pension reform dwarfs them all. This is a very significant, major reform, the largest anyone knows about in any state.” Budget director David Vaught.
*”I make no bones that about the fact that I think this was an extremely significant step that the Illinois General Assembly did.” Illinois Chamber of Commerce President Doug Whitley.
*”The bill which Governor Quinn signed into law today does not address the state’s budget crisis. The legislature exempted current legislators, current state employees, and other current members of the pension funds from these ‘reforms.’ Thus, the pension reform applies to no one.” R. Eden Martin, president of the Civic Committee of the Commercial Club of Chicago.
“Politicians created a mountain of pension debt, but this bill doesn’t provide a penny to pay it down. It cuts modest pension benefits, but does nothing to address the state’s severe budget shortfall.” Henry Bayer, executive director of Council 31 of the American Federation of State, County and Municipal Employees.