Five years after the conservative think tank criticized lawmakers for passing a pension bill it once called “grossly inadequate,” the group has changed its mind. “It turns out it was pretty darn good,” John Tillman, CEO of IPP, told POLITICO. His organization recently revisited SB1, the bill that passed in 2013 but was found unconstitutional in 2015.
Tillman said the measure would have saved somewhere between $1.1 billion and $1.4 billion a year in 2016, 2017 and 2018. “It would have put the state on a much better path to fully funding pensions,” he said, crediting Democratic state Rep. Elaine Nekritz for shepherding the bill and the bipartisan nature of it.
IPI’s turnaround signals an olive branch toward Democrats and the state’s new administration. And it follows a tumultuous four years working with Gov. Bruce Rauner. The anti-union, anti-tax group appeared aligned with Rauner when he first took office. That changed when the governor signed the controversial HB40 abortion law—after he said he wouldn’t. Tillman called him a “failed” leader. Their relationship spiraled downward. […]
He insists pension reform is still possible, but only with bipartisan support. Tillman hopes to talk to Gov.-elect J.B. Pritzker about creating a two-pronged pension system that would protect already-earned current retirees and current workers’ benefits (possibly with a 401K system) and also those of retirees.
Tillman is indeed on a mission here. We had a long off the record conversation in Springfield this week.
And while he is trying to position himself as extending an “olive branch,” I doubt that the governor-elect is all that interested. Pritzker has talked a lot about the CTBA plan to reamortize the pension debt, but has rejected all other reform ideas. Tillman claims the CTBA plan is unworkable because it won’t contain costs.
…Adding… The group’s opposition to SB1 was a lot harsher than described above. From 2013…
Government workers and taxpayers should call out Illinois’ pension bill for what it is – a farce. […]
Workers and taxpayers will need to say no to fake reforms and call for the only sustainable solution going forward: giving state workers control over their retirements through defined contribution plans that workers own and control.
…Adding… And the group knew the projected savings back then as well, but dismissed them…
The pension bill saves only $1.3 billion in its first year
…Adding… Tillman also says in that Politico piece that he hopes to meet with Madigan, but his group just published a cartoon comparing Madigan to Satan. I kid you not. Click here.
* From Craig Dellimore’s interview of Tillman…
Tillman admits he was wrong about SB1. It would have been good if it stayed in place, he said.
“It turns out it wasn’t just one good step, maybe it was five or six very good steps. If you look at what would have happened since that bill was passed and if the Supreme Court had not ruled it unconstitutional,” Tillman said.
So, now, the controversial think tank, at the center of some turmoil under Governor Rauner, is suggesting a bipartisan effort under JB Pritzker to change the Illinois Constitution and create a two-option pension system that, he said, won’t affect benefits earned by current workers or retirees. He is not expecting an easy sell.
“The most important thing to do is to fix the problem now and that’s why we are using the anniversary day of the 2013 reform to hold ourselves accountable and to encourage the General Assembly to look back at what they did in a bipartisan fashion and say hey there’s a lesson there,” Tillman said.
* And the Illinois Policy Institute’s Austin Berg kinda/sorta explains what they want to do via an op-ed for the Illinois News Network, which is based at the same address…
That’s why a constitutional amendment is so necessary. And it doesn’t have to eliminate the pension clause in order to allow cuts.
A solid amendment simply needs to allow for changes in future benefits, while protecting what has already been earned by public employees. Voters could approve the amendment as early as 2020, and lawmakers could pass specific reforms that trigger the morning after Election Day.
Those changes need to be a bit more substantial than in 2013, because the problem has grown tremendously since then. But the principles can remain the same.
* The institute itself recently released a white paper…
A constitutional amendment allowing reductions in the growth of future benefits could be followed with legislation that essentially reintroduces the 2013 reform concepts with differences in degree, including the following:
Increasing the retirement age for those not currently close to retirement
A cap on the maximum pensionable salary that grows at a rate pegged to inflation
Replacing Illinois’ 3 percent guaranteed benefit increases with a cost-of-living increase tied to inflation
Potentially suspending COLA increases for certain years to allow inflation to catch up to past raises
* But even Gov. Rauner told Crain’s this fall that a constitutional amendment was futile…
He wants pension reform, but said the idea of amending the Illinois Constitution to reduce such benefits likely is a political and legal non-starter.
If I recall correctly, Rauner specifically said he doubted that voters would approve such an amendment even if you could get it out of the House and Senate.
* And changing the state’s Constitution won’t help with this clause in the US Constitution…
No State shall… pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts