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No grueling summer session in sight… yet

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Illinois

* My weekly syndicated newspaper column…

At least for now, it doesn’t appear that rank-and-file legislators will have to spend much time in Springfield this summer — even though they failed to finish their work on pension reform last week.

Aides to Gov. Pat Quinn claim that they’ve learned from the mistakes of his predecessor, Rod Blagojevich, and won’t drag legislators back to the Statehouse for a grueling overtime session to try to resolve the pension funding crisis, which has already overwhelmed the state budget.

Blagojevich convened numerous overtime sessions, and they were all divisive political circuses. Plus, forcing legislators back to Springfield to sit around and wait for the leaders to come to an agreement means they’ll have plenty of time on their hands to bad-mouth the governor to reporters, who won’t have much to do, either.

Quinn signaled his understanding of this dynamic in an official statement issued after it was apparent that pension reform was dead in the water in the spring session.

“I will convene a meeting with (Senate) President Cullerton, (Senate Minority) Leader Radogno, (House) Speaker Madigan and (House Minority) Leader Cross in the coming week so we can forge a pension reform agreement as soon as possible and return to Springfield to enact it into law,” Quinn said.

There’s really no need to convene the full General Assembly because the real problem here is a fundamental disagreement among the legislative leaders.

Speaker Michael Madigan (D-Chicago) is insisting on shifting teacher pension costs away from the state and onto downstate and suburban school districts. House and Senate Republican leaders are adamantly opposed to such cost shifting, saying it would substantially boost property tax bills and punish wealthier school districts that tend to have higher pay for educators.

Madigan handed off control of the pension reform package to Tom Cross (R-Oswego) earlier in the week and allowed the bill to be amended to strip out the cost-shifting language at the behest of the governor.

But the next day, the last day of the legislative session, Madigan let it be known that he would be voting against the bill. That was all it took for his members to jump off it as well.

House members from Chicago were among those against the bill. Some were told by Quinn aides that Mayor Rahm Emanuel supported the revised legislation, but the mayor’s Springfield crew never got the word to work for the proposal.

Emanuel has pushed hard for the cost-shifting plan, believing that it’s unfair for Chicago Public Schools to pay its full share of employee pension costs while school districts outside the city have the state cover most of those costs.

With Madigan opposed and Emanuel not working for the bill, it quickly became clear to the governor’s office that there was simply no way to pass it. Cross told the House that this would be a “summer issue” and that emotions needed a chance to cool down.

The Republicans (and downstate and suburban Democrats) are so completely against any talk of shifting pension costs to school districts — even if they’re phased in over several years — that the issue appears almost impossible to resolve.

But Madigan and Emanuel know that there’s probably no better vehicle to attach the idea to than the politically important issue of pension reform, so they’re not giving up, either. The solution might be getting more school more money for Chicago, perhaps in a way that gives additional cash to education in general.

Then again, there’s been little willingness on Madigan’s part to move forward with a highly controversial pension bill that riles up teachers before the Nov. 6 election, when all 177 seats in the Legislature are up for election, many in new districts.

State and university workers and retirees are mostly concentrated in pockets around the state, so their political impact on legislators is limited. But public schoolteachers and retirees are everywhere. And there are a lot of them. And they are very politically active.

The Senate showed last week that it can pass a pension reform bill when it approved changes to the State Employees Retirement System on what appeared to be a carefully structured roll call.

That reinforced the idea that bringing the entire General Assembly back to town for an extended stay this summer is both unnecessary and a bad idea. If the leaders can be put on the same page, then the members will undoubtedly follow.

* Related…

* Pension reform faces uncertain path forward: So the focus may turn to how lawmakers can tweak their plans to force local school districts, community colleges and universities to pick up some of the state’s pension costs. “What we have to do is find common ground between both proposals,” Quinn said. Coming up with a new idea is possible, but it could be tricky as lawmakers have already used creative policy ideas to get this far. “If I’d thought of it (another plan), I would have put it on the table,” state Rep. Elaine Nekritz, a Northbrook Democrat.

* A near miss in Springfield on Illinois pension reform: But not everyone wants a quick solution to pensions. Collin Hitt, senior director of government affairs at the Illinois Policy Institute, a right-leaning think tank, said although he was surprised a pension deal didn’t pass, he wasn’t disappointed given the legislative gymnastics happening at the eleventh hour.

* Legislators headed to overtime: Rep. Don Moffitt, R-Gilson, said he would have been surprised if an agreement was reached before the session’s Thursday deadline. Sen John Sullivan, D-Rushville, said the complexity of reforming both Medicaid and pensions and the body’s time constraint worked against them. He said Medicaid was the more pressing issue because it had implications for the current budget.

* Quinn implores legislators on pension reform: Senate Republican leader Christine Radogno, of Lemont, said passage of even the slimmed-down pension reform represented a huge step forward, but said it’s “excruciatingly frustrating” that lawmakers failed to pass a comprehensive pension overhaul this spring.

* How pension-reform push spun out of control - Legislative squabbles, fear of alienating unions both played roles

* Ill. pension fix derailed; officials to try again: Did Madigan always intend for pension negotiations to collapse, perhaps as a way to please deep-pocketed unions who have long supported Democrats? Did he intentionally blow things up after realizing his own proposal couldn’t pass? Did he maneuver Republicans into presenting their plan and failing, hoping that it would embarrass Republicans and make his own proposal more palatable? House Minority Leader Tom Cross, R-Oswego, said he wasn’t sure… But Cross’ political organization claimed to know Madigan’s goal, sending out a fundraising appeal Friday that said Madigan abused his power and “got his wish of halting real reform.”

* Lawmakers won’t be gone from Springfield for long

* Statement from Governor Quinn on Stabilizing Our Pension System

* Our View: Once again Illinois legislators fail to deal with pensions

posted by Rich Miller
Monday, Jun 4, 12 @ 8:18 am

Comments

Rich - Wouldn’t the best compromise be to spread the cost to communities and school districts over a longer period of time?

Comment by gathersno Monday, Jun 4, 12 @ 8:50 am
===over a longer period of time? ===

The current proposal would’ve spread it out over 13 years (from now). I think Cross also rejected a plan to spread it out over a longer period. So, no. Not yet, anyway.

Comment by Rich Miller Monday, Jun 4, 12 @ 8:58 am
Shame on Madigan and the democrats for not fixing the pension crisis. They have majorities.
Politics as usual.

Comment by Louie Monday, Jun 4, 12 @ 8:59 am
Louie,

The quesitonable COLA / health insurance trade-off wasn’t really a fix because most people didn’t expect it to survive a court challenge. Where TRS explicitly identifies a part of each teacher’s pension payment as going to purchase the COLA, I don’t think the GA has a leg to stand on regardless of what they enact. The GA might make it stick to the actual SERS employees, but even there it is questionable as to whether it will actually be considered a choice between two equivalent options.

The only part that was clearly legal was shifting the future cost of TRS to the local districts and SURS to the individual university systems. Once that came out of the deal, nothing was going to happen.

And as far as Chicago getting extra money for schools because they already pay their pensions, it thought an increased payment level was part of the school formula deal years ago when CPS took over paying for their pensions.

Comment by Retired Non-Union Guy Monday, Jun 4, 12 @ 9:20 am
I don’t believe they want to address serious pension reform before the November elections. The Democrats running for national office need all the union support they can get, they don’t want angry union employees staying home.

Comment by Wensicia Monday, Jun 4, 12 @ 10:26 am
Although the Legislators are concerned about the impact of the teacher pension shift on the fall election, I think most people would agree that those making the decisions about teacher salaries should also be the ones paying for the pensions - in other words the school boards/those paying taxes to support the local school. It’s fair, and government should be as local as possible. If the Republicans believe this would “punish wealthier school districts that tend to have higher pay for educators” then it would seem to me these districts have less to worry about because they are “wealthy” anyway. There’s no “punishment” here - it just makes them responsible for their actions. A phase in of 13 years is more than reasonable and will have a gradual impact that can be absorbed by the local taxpayers. Yes, they may have to pay more property taxes but they’re going to pay for the pensions one way or another - either with a property tax increase, newly instituted taxes or fees from the state, or reduced services. It’s not often I agree with Madigan or Emanuel, but in this case I do - shift the teacher pensions!

Comment by Both Sides Now Monday, Jun 4, 12 @ 10:32 am
Wensicia,

They already lost the SERS unions / people with SB-1313. That bill didn’t impact teachers because they were already paying for their insurance.

Along with SERS people, the teachers I know in the family aren’t happy about the proposed COLA / insurance choice … so I’m not sure you can count on them in November.

Comment by Retired Non-Union Guy Monday, Jun 4, 12 @ 10:51 am
Louie, if there were an easy path to a real and workable solution that could pass both chambers and be signed by the governor, it would have been done a long time ago.

Comment by wordslinger Monday, Jun 4, 12 @ 10:53 am
Should all the teachers be in the same retirement system? Is that problem? Maybe, they should close down the Chicago Teacher’s Pension Fund and fold those members into TRS.

Comment by Thinking out of the box Monday, Jun 4, 12 @ 12:01 pm
“House and Senate Republican leaders are adamantly opposed to such cost shifting, saying it would substantially boost property tax bills and punish wealthier school districts that tend to have higher pay for educators.”

So let’s get this straight. Republicans want to encourage generous local government spending on salaries by pushing the additional government spending that it creates onto other taxpayers who have nothing to do with the local spending.

So much for the Republican principles of personal responsibility and paying your own way. It’s interesting to see Republicans and the Illinois Policy Institute on opposite sides of this.

Of course Madigan’s heavy-handed tactics hardly helped the cause of reform, and caused many to suspect that he opposes it before November.

The SJ-R editorial seems on the mark — if both sides want pension reform then they can find a compromise on cost shifting.

Comment by Anon Monday, Jun 4, 12 @ 12:04 pm
Perhaps, we need to see a few failures of smaller pension plans at the county and local government levels. California seems to be well on its way exploring what happens when the pension money runs out. The government employee unions have a strong hand in Illinois based on the constitution’s pension impairment clause. And apparently they’re playing it. Cost shifting to the real estate tax bill is off the table as far as I’m concerned until I see some give on their end, including modification of the COLA, a rational calculation of the monthly payment, significant contribution to healthcare and delay of retirement until 62 for all non-public safety employees. Essentially, they’ll need to get a lot closer to what private sector employees are stuck with.

Comment by Cook County Commoner Monday, Jun 4, 12 @ 2:17 pm
Anon 12:04 - If the State would allow local governments to negotiate retirement packages/pensions (age, contributions, payout percentages, etc) and disallow binding arbitration across the board, then I think more would be amenable to cost shifting. However, as it stands, that is not the case across the board for local governments. The State dictates the benefits, so it’s not exactly the most fair system to force locals to pony up all the costs. It’s been the problem for years with police and fire. Force locals to pay for all the costs and then the State has no problem increasing benefits because it doesn’t affect them.

Comment by Shemp Monday, Jun 4, 12 @ 2:32 pm
I find it really hard to believe that the pension negotiations were really focused on getting legislation passed. If they come back into a special, they’ll need at least some support from the minority party, and I just don’t see that happening.

Comment by Anon Monday, Jun 4, 12 @ 2:59 pm
Why not make the school districts pick up the costs incurred due to raises and new hires? Schools would then have some control over those costs and could plan for them in union negotiations and when making job offers.

It would also be helpful if schools had a choice in the retirement plans it offers its employees. The state could establish several retirement plans with varying degrees of defined benefit, defined contribution (with and without at match), and social security. That allows some school districts to pay higher salaries for lower retirement costs/risks while others could pay lower salaries in exchange for a more attractive pension.

Comment by thechampaignlife Monday, Jun 4, 12 @ 3:50 pm
It looks like the bigs will be meeting in Quinn’s Chicago office Wednesday.

Comment by mark walker Monday, Jun 4, 12 @ 4:14 pm
Cook County Commoner @ 2:17 pm:

The local government pensions are all part of IMRF, which is fully funded because the State forced the other government organizations to do so. They are as rock solid as any pension fund can be; they aren’t going to fail. They are the poster child for what the State systems could have been … had they been funded when they should have been.

Comment by Retired Non-Union Guy Monday, Jun 4, 12 @ 5:01 pm