* Hannah Meisel at NPR Illinois recently interviewed all four legislative leaders. This post will focus on pensions…
“Right now I don’t get a sense of urgency out of the Democrats to say that we’re going to stop this insane, insane appropriation to our pension systems without at least reining in the cost,” Durkin said.
Durkin says he wants to at least try to pass the other option lawmakers could have gone with in 2013: a negotiated pension reform dubbed the “consideration model” in which organized labor would agree to certain cuts in pension benefits. Then Senate President John Cullerton championed the approach, but ultimately lost out to Madigan’s proposal.
McConchie agrees, noting the extreme political unlikelihood that Illinois’ constitution would be amended to weaken or remove the pension protection clause — an idea floated by groups like the libertarian-leaning Illinois Policy Institute. McConchie says attempting a negotiated settlement would at least help guarantee both the state’s pension systems and smaller municipal pension systems don’t implode for future generations of public employee retirees like teachers.
“We need to have reforms that actually get our pension systems onto the track that they can fulfill the promises that were made to the people who essentially have put all their eggs in that basket,” McConchie said. “These people do not qualify for Social Security…And if counted on this pension, we need to do what we can to guarantee them that their pension will be there long-term.”
* Here’s Senate President Don Harmon’s take from the audio recording…
Well, first of all, I am one of those who thinks a constitutional amendment would do nothing to erase the legacy debt. And I don’t even think a constitutional amendment would change benefits for people participating in the system. Those benefits are protected, not only by the Pension Clause, but also by the Contracts Clause of the state Constitution and the United States Constitution. So, there are a lot of people who would like to wish away the Constitution when it’s inconvenient.
But the short answer is, on the legacy debt, we’re going to have to pay it. The consideration model that has been in play may have worked at the time, but in the face of a seven to nothing Supreme Court decision that, as you said, pretty much closed the door on changing current benefits. It is ironclad.
But also lost in this entire conversation is the enormous reforms enacted in 2010 to create a second tier to pension benefits for every public employee in the state hired after January 1 of 2011. A much-reduced set of benefits, so low in fact, Social Security may ding us and force us to raise some of those benefits. That’s a $50 billion by the estimates I remember from the time, and it got almost no coverage in the press because it didn’t take any pensions away from anyone. But that transition from a tier one pension model to a tier two pension model will solve this problem over time. It’s a problem that took a century to get into this deeply, it’s going to take decades to get out.