* Gov. Pat Quinn and Senate President John Cullerton have rejected a proposal pension floated by labor unions yesterday…
The union group’s plan was a nonstarter for Gov. Pat Quinn, who is pushing for a more comprehensive pension overhaul. A Quinn spokeswoman dismissed the suggestions as “nothing new,” adding that the proposal “would not solve the state’s pension challenges, nor is it feasible.”
Union officials say the proposal is a “fair alternative” to the plan that House lawmakers could vote on Friday when they return to the Capitol. […]
With an election looming Nov. 6, others dismissed the union’s move as an attempt to derail any vote for pension reform.
“Passing a bill that takes on the pensions of legislators and state employees wasn’t easy,” said a top aide to Senate President John Cullerton, D-Chicago, who sponsored the measure. “The latest efforts by (unions) should prove that it’s far from politically convenient.”
The proposal’s outline is here.
Quinn, meanwhile, tried to increase the pressure on lawmakers to shift some pension costs away from the state. He released an analysis in Chicago showing that state funding for higher education will continue to drop if pension funding continues to squeeze out the money available for other state programs.
Universities and community colleges will lose more money if the state continues to cut support for higher education than they would pay if they had to assume pension costs for their workers, the analysis says.
It parallels an analysis Quinn released a week ago purporting to show that local school districts would be better off if they pay their teacher pension costs than they would be if lawmakers continue to reduce state aid to schools.
The idea of shifting state pension costs to schools has not drawn much support so far in the legislature.
* In other news, state Rep. Mike Fortner has some very interesting and apparently quite doable pension reform ideas. Here’s one of the revenue streams…
HB 6204 introduces a new revenue stream allocated to paying down the state’s unfunded pension liability. Money currently allocated to paying back existing bonds once the bonds have matured will be invested into the pension system to fully fund the system by 2045. Under former Governor Rod Blagojevich and current Governor Pat Quinn, the state sold bonds instead of making the required payments for pension liability from the general fund. We are still paying back these bonds, with interest. Under HB 6204, when the bonds mature, the money currently allocated to repaying the bonds will be redirected into the state’s pension fund. Fortner claims these new revenue streams, combined with the cost-savings effect of HB 5754, will fully fund the pension obligation by 2045 years without a tax increase.
Fortner would also require an eight percent employee contribution, which is the same as the State University Retirement System uses.
He would also cap pension benefits at a certain level, which for most workers would be the “annual salary of the participant during the 365 days immediately before the effective date of this Section.” Beyond that cap, a “defined contribution” program would kick in. Employees would pay six percent of their salary above the cap into that fund.
* From Fortner’s Power Point…
HB 6204 requires a total of $5.1 billion in FY 2014.
HB 6204 pays 100% of unfunded liability by 2045.
The bill also allows workers to transfer all their pension contributions, plus interest, into a defined contributions plan. And it shifts the three percent employer contribution costs above the cap to Downstate and suburban school districts.