* Two things to think about before we move to the actual topic of this post. First, from the Illinois Constitution…
Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.
Pretty darned plain language there.
* And this is from the S&P downgrade back in January…
If there is meaningful legislative action on reform, we believe that there could be implementation risk based on the potential for legal challenges, and it could be several years before reform translates into improved funded ratios and budget relief.
* Now, on to today’s stories about the pension votes yesterday…
The Illinois Senate Wednesday approved a plan to cut working teachers’ pensions while rejecting a more sweeping plan, sending mixed messages about where the debate over one of the state’s biggest financial problems will go next.
A plan by state Sen. Daniel Biss to cut the pensions of public employees including teachers and lawmakers, which had appeared to gain bipartisan momentum in recent months, was instead soundly defeated 30-23.
Biss’ plan would have cut annual cost-of-living pension increases, raised the retirement age and required local school districts to start paying into a 401(k)-style plan for teachers, among other things.
But whether it would pass muster under an Illinois Constitution that says benefits cannot be “diminished” was a key question in the debate.
As a result, a proposal from Senate President John Cullerton was approved by a 30-22 vote.
I have yet to hear any credible arguments about how Biss’ plan survives constitutional muster. The best argument is that nobody ever knows for sure how a court will rule. That’s true. Other than that, the Constitution is pretty clear here.
The Senate voted 30-22 to reform just one state pension systems facing financial trouble, but it was the largest of five, the Teachers’ Retirement System.
True to the approach he’s taken previously, Cullerton, a Chicago Democrat, wrote the legislation to give teachers a choice between health care coverage during retirement or reduced annual cost-of-living increases. The “consideration” approach, Cullerton insists, would allow the state to sidestep a prohibition in the Illinois Constitution against reducing previously promised pension benefits.
“Benefits cannot be changed unless the Legislature offers public employees and retirees a choice and the opportunity to consider and accept that offer,” Cullerton said.
But between the slim victory on a narrowly drafted bill and the earlier defeat of another Democrat’s comprehensive approach to the pension crisis, the action Wednesday leaves questions about whether the General Assembly has the stomach to tackle the pension mess.
* The politics…
Biss, D-Evanston, and Cullerton took different approaches toward overhauling the retirement plans, and the divide broke down along partisan lines — as well as along Cullerton’s power base.
Biss’ broader pension measure picked up a dozen Republican votes, including that of Senate Minority Leader Christine Radogno of Lemont. She called Biss’ measure the most comprehensive approach and the “best path forward at this point in time.”
But only 11 Democrats jumped in with Biss. The 23 votes fell seven short of passage.
The Senate Democratic rank and file sided with Cullerton over Biss. No Republicans backed the Cullerton plan, noting it only affected active teachers. […]
The Biss plan would save an estimated $150 billion over 30 years. Cullerton’s plan would save an estimated $18 billion to $40 billion.
Biss’ plan won’t save a freaking dime if it’s kicked out by the courts.
* The breakdown…
These Democrats voted against the bill: Jennifer Bertino-Tarrant, Melinda Bush, James Clayborne, William Delgado, Mike Frerichs, William Haine, Linda Holmes, Toi Hutchinson, Emil Jones III, Dave Koehler, Dan Kotowski, Terry Link, Andy Manar, Iris Martinez, Pat McGuire, Julie Morrison, John Mulroe, Tony Munoz, Kwame Raoul, Martin Sandoval, Ira Silverstein, Steve Stadelman, John Sullivan and Donne Trotter.
These Republicans voted against the bill: Jason Barickman, Dave Luechtefeld, Sam McCann, Kyle McCarter, Dale Righter and Chapin Rose.
And these three Democrats voted “present,” which is tantamount to voting “no”: Democrats Jacqueline Collins, Tom Cullerton and Mattie Hunter.
There are some hardcore conservatives amongst those GOP “No” votes. But they also have state facilities in their districts.
* Sen. Rose was one of those “No” votes, but he wants to cancel spring break…
“I see all of this as a gradual progression,” said Sen. Chapin Rose, R-Mahomet. “If you start tweaking this cost of living adjustment cap on people who have already retired, you started putting this thing together.”
Rose said he wished the Legislature would stay in session for the next two weeks — when it is scheduled to take a recess — “on joint House and Senate meetings and just focus on this and not anything else. I would take everything else off.”
Sen. Jason Barickman, R-Bloomington, criticized the “piecemeal approach” of Cullerton’s bill.
But Barickman also voted against the more comprehensive bill.
* The Biss bill died because the Republicans, prodded by Ty Fahner and the business groups, killed Cullerton’s hybrid SB1 bill, which included his language and Biss’ language. It was a politically possible bill. Now, we’ve got a stalemate. The Sun-Times remains optimistic…
Illinois’ $97 billion unfunded pension bill demands a big, sweeping solution. If there was ever a time to make it happen, it’s now.
The answer lies in a separate bill that failed in a Senate vote Wednesday.
That plan, sponsored by Sen. Daniel Biss, is the only plan out there that truly reforms public employee pensions. It significantly cuts benefits — we won’t sugarcoat that — but does so in a fair and targeted way by phasing in an increased retirement age, shielding the pensions of the lowest income retirees from cuts and giving the retirement systems the right to sue if the state fails to pay its share.
Biss’ bill fell short by seven votes. Insiders tell us it simply can’t pass and it’s time to get real.
No doubt there is truth to that claim. But Illinois lawmakers can do better.
And really, 23 votes on a bill that wasn’t pushed by the Senate president is a pretty good showing the first time out of the gate. Picking up seven more votes as the spring legislative session continues is doable, particularly since Biss’ bill appears to be the favored approach in the House. A similar House bill is sponsored by Reps. Elaine Nekritz and Tom Cross.
There is almost no doubt in my mind that if Ty Fahner and the Tribune editorial board hadn’t stuck their big noses into this thing, Cullerton’s SB1 would’ve passed the Senate.
I’m starting to think that somebody doesn’t want anything to pass until 2015.
* And while I fully understand the criticism of Cullerton here (that he ought to just give up on his consideration idea and go with something else that might be able to pass like a stand-alone Biss plan), I’d point out that the Senate President strongly believes Biss’ bill is unconstitutional. So, this is something to keep in mind…
SECTION 3. OATH OR AFFIRMATION OF OFFICE
Each prospective holder of a State office or other State position created by this Constitution, before taking office, shall take and subscribe to the following oath or affirmation:
“I do solemnly swear (affirm) that I will support the Constitution of the United States, and the Constitution of the State of Illinois, and that I will faithfully discharge the duties of the office of …. to the best of my ability.”