Illinois Pensions
11:14 am
Fri September 27, 2013

Pension Committee Update

A special committee has been negotiating over how to solve the pension problem for more than 12 weeks. 

Rep. Darlene Senger, R-Naperville (left) and Rep. Elaine Nekritz, D-Northbrook, discuss estimated savings of a previous plan designed to cut the state's pension costs.
Credit Brian Mackey / IPR

State Rep. Elaine Nekritz, D-Northbrook, is careful these days when she talks about the status of pension deliberations, and especially when asked how close legislators are to reaching a deal.

"I have actually stopped making predictions publicly, because I have been so wrong, that I'm a little bit embarrassed at this point," she says.

Nerkitz is the House Democrats' point person on pensions, and a leader of the so-called "conference committee" charged with finding a compromise. The bipartisan, bicameral panel was formed after a disagreement between the House and Senate this spring over the best way to reduce the state's pension costs ended in a stalemate. Illinois has yet to find a way to pay for nearly $100 billion in future pension liabilities. There's repeatedly been word the committee is close to completing its mission -- but that's been going on for weeks. Members, including Nekritz, continue to sound both optimistic, and cautious.

"I believe that the conference committee continues to take steps forward and we are very, very close to having an agreement," she says. "That being said there are still some open issues that could throw up a real roadblock. So far we've been able to work our way thorough those as they've come up, but one never knows."

Nekritz says the committee is focusing on the most expensive benefit paid out to Illinois' retired state workers - the automatic, three percent, compounded payment increase retirees receive, every year.The main idea would reduce those increases to one-half the consumer price index, with details yet to be worked out. The loose plan also calls for delaying when current state workers would begin recieving those pension bumps. In exchange, workers -- and public school teachers and university employees -- would have less of their paychecks deducted to pay for retirement.

The fact that the committee's been fixed on this version of a pension overhaul for at least a month indicates it could be the real deal. But the lag time also hints at serious problems with it.

Rep. Jil Tracy, R- Quincy, a member of the conference committee, says when House Republicans were briefed on the plan, "for a multitude of reasons they did not favor the framework that was laid out." For some, it goes too far. For others -- including Tracy -- not far enough; she says it means about 20-percent of Illinois' budget could still go toward pensions, and that is unrealistic.

Republicans have a list of five points they want considered -- all of which are aimed at saving the state more money: things like raising the retirement age from its current 55, adding the option of a 401-K style plan, and requiring the state to pay its share.

"We don't want to see us have to revisit this on down the road," she says. "We want to make these pension systems solvent, sustainable in the long term and have a stable budget as a result."

As Republicans continue bringing up additional ideas, the "cost shift" favored by Chicago Democrats is making a comeback. This involves having schools, rather than the state, pay for the employers' share of teachers' retirement benefits. It's opposed by Downstate Democrats and most Republicans. The conference committee's chairman, Sen. Kwame Raoul, D-Chicago, says that idea's never really been off the table.

I think we're moving closer to resolution. Yes there's some things we're still debating. But that's what this is all about," he says. "It's about negotiations. And you don't start out a negotiation saying hey, we all agree on everything. You have conversations. There's give and take and you work toward a consensus. The end product will be for everybody."

Of course, legislation cannot become law just by pleasing "everybody" -- it first must get the support of the two men at the heart of the pension stalemate -- Senate President John Cullerton and House Speaker Michael Madigan. Madigan is not backing down from his more drastic proposal to cut to pension benefits.

"I think the House passed an excellent bill," he said on Sunday. "And I would say that any report coming out of the conference committee for me would have to be meaningful in terms of pension reform."

Madigan's statement is characteristically vague. Regardless of whether the Democrats and Republicans on the conference committee can agree -- the question of whether it's "meaningful" enough for Madigan and other key players remains the big question hanging over the pension debate.