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* COMMENTS NOW OPEN * Pensionpalooza

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* Back on July 30th, House Republican Leader Tom Cross and Senate President Christine Radogno issued the following joint statement in response to the special session proclamation issued by Gov. Pat Quinn…

“We are encouraged by the Governor’s call for a special session on pension reform on August 17. As many people know, we have been and continue to be supportive of comprehensive pension reform that solves the major crisis facing us today. The time to act has been upon us. We are continuing to encourage Governor Quinn to take a leadership role to get a comprehensive pension bill passed in the General Assembly. We will continue to be available to discuss this very important matter in the coming weeks.”

* But now Leader Cross has changed his tone and made some additional demands above and beyond what was in the bill he sponsored back in May…

Cross, meanwhile, said ideas he’d like to see on the table include boosting employee contributions and keeping those under 67 from getting cost-of-living adjustments while leaving COLAs intact for younger retirees if their pensions are $30,000 or less. And perhaps new state hires should be offered only 401(k) types of plans, he said. […]

“I think it’s that important. I don’t run the place. I’m the minority leader. That’s all I am. I’m not daring anybody or challenging anybody, but I’m willing to hang around, to stay there ’til we get this done,” he said. “If I have to miss the Republican convention, then I miss the Republican convention. I haven’t missed one in a long time, but this is the issue of the day.”

* The Cross demand was partly in response to a study released by Gov. Quinn…

Cross said he remains opposed to requiring the state pension shift to suburban and downstate school systems, as Quinn and Democrats want, and that he wasn’t swayed by the governor’s latest offer to phase in those pension costs to school systems over 12 years.

On Sunday, Quinn showcased a report prepared by his budget office that asserted school districts, under the phase-in of that pension cost-shift, would wind up paying $49 million in new pension costs next year.

But without a reform package that would reduce the state’s outlay to pensions, those same downstate and suburban school districts could see their dollars from Springfield cut by $152 million — money that instead would have to be diverted to state pension costs, the administration contended.

That Quinn study can be found here.

* Cross was also responding to a decision by House Speaker Michael Madigan to hold a vote on the Senate-passed pension bill…

Illinois House Speaker Michael Madigan has decided to allow a limited pension-reform bill to be considered when the General Assembly returns for a special session Aug. 17. […]

Whether HB1447 can muster the votes needed to pass is another question. As it passed the Senate, the bill takes effect immediately, which means the House would have to pass it with 71 votes instead of the usual 60. Cullerton suggested that if the House can’t meet the 71-vote threshold, the reforms could be tacked on to a different bill with a later effective date and passed with 60 votes. The Senate would then have to vote again on the bill.

Brown said the possibility of doing that is under discussion.

“The ideas in the bill are what we are talking about,” he said.

* Senate President John Cullerton is also unhappy about the way the special session is going down…

A spokesperson for Sen. Cullerton said in an email statement the Senate is being called back to deal with “unspecified pension legislation,” alluding to the fact that Quinn hasn’t pointed to any specific bill for legislators to vote on when they meet in Springfield.

* The governor just hasn’t handled this issue all that well yet. My statewide syndicated newspaper column is about his struggle…

Gov. Pat Quinn’s office flatly denies it, but it’s hard to see how his big announcement about calling a special legislative session on pension reform wasn’t at least partially related to a major Chicago TV station’s special report on the same subject a few hours after his proclamation.

WGN-TV broadcast a lengthy documentary, “Pension Games,” during its 9 p.m. news program, then hosted a live discussion afterward on its CLTV cable television station along with an interview with the governor.

The station hyped the program for days, and Quinn took clear advantage of the public relations opportunity to promote himself — even taking an opportunity to whack the General Assembly for cutting the schools budget after receiving a viewer call-in question about how pension reform would impact his property tax bill.

Many legislators, mostly Republicans but some Democrats, including Senate President John Cullerton (D-Chicago), have complained about Quinn calling a special session without having a plan in place or a bill to vote on. Cullerton has described the session as a waste of time and money because lawmakers are highly unlikely to vote on anything substantial until after the Nov. 6 election.

The governor’s office countered that the state can’t afford to wait that long and that Quinn would be happy with just about any plan currently on the table. His people pointed to his decision to push for a 12-year phase-in of the controversial “cost-shifting” plan, which would force suburban and downstate school districts to pick up their employees’ pension costs and is a major impediment to an agreement on pensions.

The Republicans have steadfastly opposed that proposal, saying it would greatly increase homeowners’ tax bills. The House Democrats months ago proposed a longer phase-in of the cost shift, and Quinn has now thrown his support behind that timetable.

“I did my mighty best to get it done by May 31,” Quinn claimed about comprehensive pension reform during the TV program after a caller complained about the cost of bringing legislators back to Springfield for a special session. He said the urgency in solving the state’s pension mess left him no choice but to call a special session for Aug. 17.

Cullerton asked Quinn to rescind his special session order, offering to call a session on his own, which would avoid the additional stipend pay to legislators (the session will cost about $40,000 per day). But the governor has refused to go along, possibly because doing so would mean he would look less like a champion of pension reform.

Quinn has an effective counter-argument to complaints about the cost of a special session. He claims that doing nothing on pensions inflates the five systems’ unfunded liability by $12.6 million every day. That number has been seized upon by the media, but it’s not exactly true.

No pension bill on the table would change benefit plans immediately, and the pension systems have asked that any new legislation not take effect until July 1, 2013. So that $12.6 million will continue to accrue no matter what happens during the special session.

But as long as the media buy fully into Quinn’s argument, then that cost of $40,000 per day will pale in comparison to his warning about pension debt rising $12.6 million every day.

Quinn obviously believes he has public opinion behind him on this one, although some Democrats have pointed to polls that show Quinn is very unpopular in many districts they’ve surveyed this summer. They also say pension reform proposals aren’t nearly as popular in politically targeted, Democratic-leaning districts as they may be statewide. There’s not much incentive for Democrats to go along with Quinn on this one, at least not yet.

But even if the public was totally with him, the public doesn’t vote in special sessions, legislators do. And members of his party aren’t exactly enamored with the guy. Quinn closed state facilities in Democratic districts and ignored pleas by the Black and Hispanic caucuses to keep the women’s prison at Dwight open so families in Cook County would remain relatively close to the inmates.

And in taking a page out of his predecessor’s playbook, Quinn has lately taken to bashing legislators for not toeing his line. On another TV program last week, he said legislators might have to cancel their golf games to attend his special session. Quinn was speaking, but I could clearly hear Rod Blagojevich talking.

* Finke…

Quinn issued the special-session proclamation less than three weeks before the session will be held. Apparently, in the interim, Quinn expects some resolution on a comprehensive pension reform package that has eluded lawmakers for seven months this year and a good amount of time before that.

Quinn’s critics immediately drew comparisons between him and ex-Gov. ROD BLAGOJEVICH. Blagojevich was big on special sessions. He’d call them and then largely disappear, expecting the legislature to do something just because he called them into session. It didn’t work.

It’s not at all clear that the General Assembly will do anything on pensions during the special session, let alone something comprehensive that includes a cost-shift. Hope Quinn’s thought about what he’s going to do next.

posted by Rich Miller
Tuesday, Aug 7, 12 @ 9:48 am

Comments

“I think it’s that important. I don’t run the place. I’m the minority leader. That’s all I am. I’m not daring anybody or challenging anybody, but I’m willing to hang around, to stay there ’til we get this done.” - Tom Cross

Oy.

Comment by Yellow Dog Democrat Wednesday, Aug 8, 12 @ 10:08 am
Some Downstate districts might want to start running their numbers as to which would be worse: a phase-in of pension costs or cuts in state funding. One of them is certainly going to happen.

It’s a no-brainer for a lot of suburban districts; they’re not getting much in state aid to begin with. Being off the hook for the pensions let’s them spend to their hearts’ desires from their property tax bases.

Comment by wordslinger Wednesday, Aug 8, 12 @ 10:21 am
I just want to say — I love the word “Pensionpalooza.”

Comment by Anonymous Wednesday, Aug 8, 12 @ 10:22 am
Cross is serving large slices of humble pie but no one is buying.

Comment by Kerfuffle Wednesday, Aug 8, 12 @ 10:22 am
I may have missed this discussion before but how is it consititutional to shift pension costs to the local school districts when they were set by the State and the State blew the money?

Comment by McHenry Mike Wednesday, Aug 8, 12 @ 1:00 pm
“Pension Games”, “Pensionpalooza” None of these ideas proposed by Quinn, Madigan or Cross can be the real answer to the problem because each pension system has their own timelines, percentages and formulas. Just ask Mayor Daley who boosted his payout by being invested in two systems

Comment by Makandadawg Wednesday, Aug 8, 12 @ 1:11 pm
The hostile position Cross’ took this week tells me he doesn’t have 30 votes to put on the Senate’s SERS/General Assembly reform plan because of opposition from his downstaters. Madigan might have him in a box here, especially because it will need 71 votes to pass. If it falls short of 71 and there are more Dems voting yes than Repubs, Cross wears the jacket for its failure and the GOP is seen as the impediment to pension reform. Cross will argue the bill doesn’t go far enough, but that’s just a cover story.

Comment by Phil Wednesday, Aug 8, 12 @ 2:00 pm
So the schools are supposed to support the pension transfer because it’ll only cost them $49M/yr instead of $152M/yr (*projected*)…except that that “savings” is only for the second year of the 12-year phase-in? And the comparison is to no reform at all, not just reform with no transfer? And the state magically turns $49M in savings from the state budget into affording $152M? I’d love to cut my cable bill by $49 and have $152 magically appear in my pocket!

To paraphrase, I’ll gladly pay you Tuesday for a hamburger today.

Comment by thechampaignlife Wednesday, Aug 8, 12 @ 2:34 pm
@thechampaignlife -

No. And I don’t expect the schools to support the pension transfer.

But lawmakers - especially those who claim the mantle of “fiscal conservative” - ought to end the longstanding practice of shifting the retirement costs of folks who aren’t state employees onto the backs of state taxpayers.

The state’s longstanding practice violates the fundamental principles of fiscal responsibility.

As a result, many school districts negotiate end-of-career pension sweeteners for teachers in lieu of raises because its you end me that end up footing the bill.

Its a practice that ought to end.

Comment by Yellow Dog Democrat Wednesday, Aug 8, 12 @ 2:41 pm
@YDD: I agree that the current practice is flawed because it gives school districts a low cost incentive option at high cost to the state. Technically, you and I foot the bill regardless since it will come from property taxes or income taxes. But, regardless of the funding source, both the state who sets the pension level and the school district which sets the payout need to have a stake in the game. Or, end TRS and make the schools pay into social security if the state wants out of the financial risks and obligations.

Comment by thechampaignlife Wednesday, Aug 8, 12 @ 3:19 pm
wordlinger - Wednesday, Aug 8, 12 @ 10:21 am:

“It’s a no-brainer for a lot of suburban districts; they’re not getting much in state aid to begin with. Being off the hook for the pensions let’s them spend to their hearts’ desires from their property tax bases.”

The School State Aid formula embodies a legislative compromise to cut up the state-aid pie between CPS and the down-state school districts. Cook County Suburban Districts are providing in some cases 98% of their funding locally and getting almost no state aid. A large part of the consideration for the imbalance in state aid is that suburban districts get to dump their pension costs over onto the State.

The obvious beneficiaries of that dump-over are the teachers and administrators who face no real local school board opposition to demands for over-generous pensions.

It makes sense for the School District that is ordering the “dinner” to pay the check. But when that change is made, the whole question of State Aid should go back onto the table.

Comment by Anon III Wednesday, Aug 8, 12 @ 5:22 pm
If the TRS/SURS pension costs are shifted to the districts and unversities, the state will have $XX freed up to spend. And that spending will likely go to the districts and universities. Kind of a shell game.

Comment by Anonymous Thursday, Aug 9, 12 @ 9:43 am