* Gov. Pat Quinn said this week that he’s creating a pension reform “working group” to tackle the complicated issue. While many would say this is preferable to allowing the corporate titans at the Civic Committee and their little “me too” buddies at the Chicago Tribune editorial board to dictate all the terms of pension reform, it’s a whole lot easier said than done…
Quinn said the working group will be led by Jerry Stermer, a senior advisor in his office, and will be made up of a mix of Democrat and Republican lawmakers from the Senate and House. Union groups and other organizations will also have a seat at the table, Quinn said. […]
Quinn said he modeled the makeup of the group on similar panels that have brought about major education overhauls and changes to the state’s workers compensation system.
“This process seems to me to be the very best way to make sure that everyone has a voice,” Quinn said. “We will work together to go forward on the common good when it comes to pensions, public pensions in Illinois.”
The school reform negotiations were long and tedious, but most of the groups at the table were OK with the general reform goals, which put pressure on the Chicago Teachers Union, for instance, to get in line. I highly doubt we’ll see the same willingness by the unions to compromise on sweeping pension reform, but correcting some of the more egregious abuses (like getting rid of the magic wand that universities have to put anybody they want into the pension system) is possible. So, good luck, Jerry, you’re gonna need it.
*** UPDATE *** Steve Schnorf ought to be on this panel. There isn’t a better big picture and small details guy in all of Illinois. If the governor wants this panel to succeed, then Schnorf most definitely needs to be on it. Period.
[ *** End Of Update *** ]
* Meanwhile, one of the most significant developments in pension reform this year just happened in Rhode Island…
Retired police and firefighters from Central Falls, R.I., have agreed to sharp pension cuts, a step thought to be unprecedented in municipal bankruptcy and one that could prompt similar attempts by other distressed governments.
Matthew J. McGowan, who represents the retirees, said the agreement could be groundbreaking if the courts approved it.
If approved by the bankruptcy court, the agreement could be groundbreaking, said Matthew J. McGowan, the lawyer representing the retirees.
“This is the first time there’s been an agreement of the police and firefighters of any city or town to take the cut,” he said, referring to those already retired, who are typically spared when union contracts change. “I’ve told these guys they’re like the canary in the coal mine. I know that there are other places watching this.”
As cities, towns and counties struggle with fiscal pain, there has been speculation that they could shed their pension obligations in bankruptcy. Some have said it might, in fact, be easier for local governments to drop those obligations than it is for companies, which use a different chapter of the bankruptcy code. Large steel companies, airlines and auto suppliers like Delphi have terminated pension plans in bankruptcy.
Illinois municipalities can’t declare bankruptcy without the state’s permission, and the state Constitution is written in such a way that they probably couldn’t discharge their pension obligations in bankruptcy anyway. But, hey, you never quite know what will happen when an issue reaches the courts.