Stymied by a Democrat-controlled General Assembly and still in a contract dispute with the largest state employee union, Republican Gov. Bruce Rauner is looking to Washington for help advancing his agenda to weaken the influence of organized labor in Illinois. […]
Speaking to a gathering of business leaders in late September, Rauner said he was turning to Washington for help with one part of that effort — getting control of Illinois’ massive pension debt, which stands at about $130 billion and ranks among the worst in the nation. […]
The governor thinks Congress can release the state from that restriction by passing a law that would give states permission to come up with cost-saving changes to their pension programs. The option would be available to states only after they had established that spending money on workers’ retirement plans is hampering other essential services.
After conducting hearings, a state would have to propose its changes to a court, which would hear arguments from people who would be affected. Options could include reducing benefits provided under a pension plan, changing the way benefits are calculated or limiting the number of pensions a person can collect.
* But what is he actually trying to do?…
Last week, Rauner (along with deputy governor Leslie Munger) made a surprise appearance at a New Trier Republican dinner. He created another surprise by making a couple of declarations, according to people in attendance: one, he singled out National Republican Committeeman Richard Porter for his role in a federal effort to allow the restructuring of public pensions. The state has the worst-in-the-nation pension liability, estimated now at an eye-popping $130 billion. […]
Politically, however, it’s a tall order to advance a federal law to circumvent state constitutions. And any agreement would need 60 votes in the U.S. Senate, which Republicans don’t have. At an event last month before the U.S. Chamber of Commerce, Rauner talked about his efforts.
“We’ve got a bill now, we’re working with Congress. (If) Congress passed a law, we’re lobbying right now, allow states to restructure their pensions, supercede the restrictions that the special interest groups have put on the state,” Rauner said at the Sept. 28 event. (Audio) “And I’m hoping to get it done with the tax overhaul that we’re doing. If we can get this bill passed — transformative for Illinois government and taxpayers.”
Roskam, the Ways & Means Tax Policy chairman, who is taking a lead role in the tax overhaul effort, said there isn’t a separate bill but added: “I’ve heard the concept discussed, I’ve not seen the language. Not pension funds — but there’s some theory about the capacity of federal courts to get the jurisdiction to allow some level of bankruptcy,” Roskam said in an interview. “There is some discussion … there is no language that I’m aware of. I think it’s conceptual.”