* I have yet to hear anyone say that the pension reform bill is definitely moving forward to a floor vote this week. And even if it does, and even it it passes, barring a miracle, there’s little to no chance of Senate passage by Thursday.
So, keep that in mind as you read the stories…
An Illinois House committee has approved a measure to change pension costs and benefits for state employees.
The bill heads to the full House where its fate is uncertain. It would create three different “tiers” of pension benefits and costs. One of those is a 401k-style “defined contribution” plan.
Supporters say the state needs to change its pension plans because it can’t afford them. Unions strongly disagree with the changes being proposed.
* But a provision designed to calm the nerves of current employees will also end up costing the state a lot more cash than the original bill. Read carefully…
Unlike the version of the bill considered in the spring, Tier 1 employee pension contributions would not be re-calculated every three years to determine the actual cost of Tier 1 pensions as Tier 1 members die or migrate to other tiers. Unions had protested that the payments would become so cumbersome as to eventually make Tier 1 unaffordable.
The current version of SB512 allows a review of employee contribution rates in 2015 and allows them to be raised by 2 percentage points. After that, no further increases would be permitted.
But that would mean employees in Tier 1 would receive a larger contribution from the state than employees in other tiers, noted Rep. Kevin McCarthy, D-Orland Park, the pension committee chairman. It will also reduce savings – estimated by supporters to be in the the tens of billions of dollars – supporters believe the state will achieve under the bill.
Biss asked an actuary from the Civic Committee of the Commercial Club of Chicago, a group of the city’s top business leaders pushing the legislation, whether she had calculated how much it would cost the state if no Tier 1 members migrated to another tier of benefits. She had not, leading Biss to wonder why the legislation had to be acted upon this week.
The proposal still saves the state money, just not as much.
* AFSCME’s Henry Bayer and House GOP Leader Tom Cross got into it a bit at the hearing…
“This bill is a bill that masquerades as pension reform and should have been introduced on Halloween,” Bayer said.
Cross, who said several times that he agreed with Bayer, said organized labor never presented a substantive alternative proposal.
“It started in January of this year, Henry,” Cross said. “We’ve had 11 months, and no one’s offered one thing to me.”
Bayer interrupted: “People said, ‘Why weren’t you at the negotiating table?’ I said, ‘Where’s the table?’”
“You were in my office a month ago,” Cross replied.
* Item of note…
In a recognition of the bill’s political sensitivity, state Rep. Karen May (D-Highland Park) voted for the measure during the committee roll call, but changed her vote to “no” after realizing the bill had enough votes to pass.
* And the SJ-R once again editorializes in favor of the proposal…
We’ve heard the overheated rhetoric from both sides of this issue. We’re not out to demonize teachers, firefighters or any other public employees. They have a right to be concerned and they deserve a fair deal. But all public employees need to realize what the numbers show. At some point, there will be no money to distribute to retirees under the current structure.
They also need to look at their situation in the context of the American work force as a whole. Many private sector employees have seen defined-benefit pensions end. Many employers no longer match employee contributions to their 401(k) plans. In Illinois, these are the workers who saw their income tax increase by two-thirds.
And the lawmakers who have the power to do something about this situation?
They need to stop quaking with fear of lost union endorsements and take responsibility for correcting years of irresponsibility.
* In related pension news…
In other action, the [House Personnel & Pensions Committee] approved a bill that would rescind a 2007 law that allowed lobbyists Steven Preckwinkle and David Piccioli of the Illinois Federation of Teachers to get in line for sizable state teacher pensions. They merely had to work a single day as substitute teachers. They had no prior teaching experience, prompting sponsoring Rep. Jack Franks, D-Marengo, to call their arrangement “obscene.”
“The bill is so blatantly unconstitutional on its face that Mr. Preckwinkle and Mr. Piccioli think it merits no other comment,” said David Ormsby, the lobbyists’ spokesman.
In the Senate, lawmakers introduced a separate proposal that would boot the two lobbyists from the teachers pension system but also sought to stop a series of pension abuses by leaders from a variety of Chicago-area labor unions.
It’s interesting that so many legislators say they can’t support the big pension reform bill because of its doubtful constitutional validity, but can support clearly unconstitutional legislation that does almost nothing except attract media attention.
I’m not going to defend what Preckwinkle and Piccioli did, but I’m also not gonna continue hanging them in the public square.