The long-simmering battle over government-employee pensions in Illinois took another turn this week. The Illinois Senate will be going its own way on a plan to change the drastically-underfunded system, potentially setting up a showdown with the House of Representatives.
The plan was negotiated by Senate President John Cullerton with several prominent labor unions representing thousands of state workers, public school teachers and university employees.
It tries to nudge people into accepting cutbacks in pension cost-of-living increases. In exchange for agreeing to the cuts, they'd get to keep access to state health insurance in retirement, and count future salary increases toward their pensions.
The idea of a choice is crucial to Cullerton, who thinks cutting benefits without it would violate the Illinois Constitution.
"This bill is not as risky as the bill that the House passed, because the House bill could end up saving zero dollars," Cullerton said.
Cullerton says because the House plan unilaterally cuts retirement benefits, he thinks it could be overturned by the courts. Not so, his plan.
"It's supported by the unions. They're not going to sue us. It's going to save a substantial amount of money. We're going to start reaping the benefits starting a year from now." Cullerton said.
He says he expects the savings from the legislation would free up hundreds of millions of dollars to spend on education beginning with the 2014 school year.
Illinois Public Radio's Brian Mackey contributed to this report.