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Illinois pension problem punted to incoming General Assembly

(MCT) — State lawmakers on Tuesday bequeathed the government worker pension problem to the next General Assembly, rejecting Gov. Pat Quinn's roundly criticized "Hail Mary" plan to ask a committee to fix the worst-in-the-nation retirement system.

The failure of the Democratic governor and legislators to start reducing a $96.8 billion pension debt threatens to divert more and more money away from education and social services toward retirement benefits. Leaders also braced for a possible downgrade of Illinois' credit rating, which could make it more expensive for the state to borrow money to keep government afloat.

The dynamic of a legislature in action was replaced with legislative inaction. The complex problems of pension funding gave way to a host of political concerns and a governor scrambling for ways to save face after once declaring that he was "put on Earth" to solve Illinois' pension mess by Tuesday.

Now, with the inauguration of a new General Assembly at noon Wednesday, it will fall to a House and Senate with ever-greater Democratic dominance to try to find a plan to cope with pension benefits paid to a core Democratic constituency — members of organized labor. The new House and Senate each will have veto-proof Democratic majorities over Republicans as a result of the Nov. 6 general election.

"I think (resolving the pension issue) would be incumbent upon the Democrats, since the people of Illinois spoke, gave them supermajorities and said, 'We want you to lead, so lead,'" said Rep. Dennis Reboletti of Elmhurst, a member of the House GOP leadership.

Though many incoming Democratic lawmakers campaigned on the need to address Illinois' growing pension problems, several veteran legislators said they saw no quick fixes. They pointed instead to the next deadline facing the General Assembly: The scheduled spring session adjournment May 31.

Still, Senate President John Cullerton, D-Chicago, pledged to try to move quickly in the new Legislature to build support for pension changes that, while testing constitutional boundaries, could give the courts options after an inevitable lawsuit that union workers have vowed. The Illinois Constitution's prohibition against diminishing or impairing public worker pensions has been a major stumbling block.

On Tuesday, a comprehensive House pension plan proposed by Rep. Elaine Nekritz, D-Northbrook, and backed by House Republican leader Tom Cross of Oswego, failed to gain traction. The plan would have frozen cost-of-living increases for retirees for six years, limit the amount of salary upon which pensions are based and forced workers to pay more for their retirement.

That led Quinn to try to salvage a pension resolution by offering a plan to create an eight-member pension commission that would have submitted a report to the Legislature by April 30 proposing ways to fully fund the system by 2045. A majority of lawmakers would have had to disapprove of the report or it would become law, according to the governor's approach.

One labor leader called it a "desperate, Hail Mary" plan, while other union representatives suggested it was a back-door way to enact major cuts to worker pensions.

House Majority Leader Barbara Flynn Currie said she was surprised that Quinn floated his plan because she thought some progress had been made in pension negotiations.

"I have a concern that your proposal in fact will be taking us three steps back," Currie, D-Chicago, told Quinn at the committee meeting. "I think we were going places, and it doesn't seem to me at all clear that punting to a commission, delaying things, is in fact going to get us to the goal line."

The measure got out of a House committee, mainly as a favor to Quinn. But it was quickly shot down in private meetings of House lawmakers and never was called for a vote. Many lawmakers contended it was an unconstitutional delegation of authority to an unelected panel, though Quinn maintained it was constitutional — citing an Illinois Supreme Court case in which he had lost as a plaintiff.

The prospect of creating a supercommittee to dictate pension reform was unpalatable to several lawmakers. Though Quinn's plan was geared toward putting some non-lawmaker members on the panel, there also were unpleasant thoughts of how a congressional supercommittee failed in its federal deficit reduction task. That led to the federal "fiscal cliff" that narrowly was avoided with a deal trading higher taxes on wealthier incomes to a two-month delay in automatic spending cuts.

Cullerton stood behind his analysis that a Senate-passed plan for state workers and legislators, which traded access to state health care for altering pension benefits, was the only plan that would pass constitutional muster. That plan never faced a House vote.

The Senate president said he once again would work with Senate Republican leader Christine Radogno of Lemont to try to pass the measure. At the same time, Cullerton said he was willing to try to pass the Nekritz plan — as long as his own proposal was tied to it as a backup. Cullerton maintained the Nekritz proposal is unconstitutional because it "unilaterally" takes away benefits.

Though he will start the new session Wednesday with a new supermajority of 40 Democrats out of 59 senators, Cullerton said he still will seek Republican support because there are opponents to the pension legislation on both sides of the aisle. "We really are one bill away from solving this problem," Cullerton said.

Radogno was skeptical.

"Well, quite frankly, I share the concern that nothing will get accomplished because when you look at the dynamics of the General Assembly, the Democrats have had clear, clear majorities now for 10 years," she said. "The problem is the Democrat majorities do not agree on pension reform and frankly, I'm not sure they want it.

"(House Speaker Michael) Madigan and Cullerton don't agree on a framework, and that's a huge problem. And, of course, we have a governor who is unable to bring people together," she said. "I don't know if it's doable with the current cast of characters."

Rep. David Leitch, a Peoria Republican and former banker, said it was a "gross mistake" to end the session without calling the Nekritz plan for a House vote and added that it might be more difficult to advance the measure in the new General Assembly.

Leitch said the lame-duck session would have been the "ideal time" to move the bill because lawmakers who had one foot out the door could have been persuaded to take difficult votes because they won't have to face voters again.

"Typically, that's when you do tough things," Leitch said. "This is a tough thing. Unfortunately, we didn't do it."

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