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Local representatives doubt Quinn's motivation, prospects of pension deal

Published: Friday, June 7, 2013 5:30 a.m. CDT
Caption
(AP file photo)
Gov. Pat Quinn speaks on concealed carry March 13 in Springfield, Ill. On Thursday, Quinn called a special session on June 19 for lawmakers to focus on finding a solution to the nearly $100 billion pension crisis. He made the announcement the same day Moody's Investors Service lowered Illinois' credit rating.

McHenry County’s representatives in Springfield are not sure what, if anything, will be accomplished in a special session later this month to address the pension crisis.

Gov. Pat Quinn announced Thursday that he is calling the General Assembly back to Springfield on June 19 to again attempt to fix the state’s crushing $100 billion unfunded public pension liability. Lawmakers adjourned May 31 without approving a fix, and Quinn’s announcement came shortly after that inaction prompted Illinois’ second credit downgrade in four days.

“Time and time again over the past two years, I have proposed, asked and pushed members of the General Assembly to send me a comprehensive pension reform bill,” Quinn said in his announcement. “Time and time again, failure to act by deadlines has resulted in the bond rating agencies lowering our credit rating, which hurts our economy, wastes taxpayer money and shortchanges the education of our children.”

The two downgrades further lower the worst credit rating of all 50 states.

Moody’s Investors Service on Thursday downgraded Illinois’ credit rating from A2 to A3 – seven levels from the best grade and four stages above junk status. Fitch Ratings on Monday downgraded Illinois from A to A-minus.

The House and Senate passed their own versions of pension reform during the spring session.

But neither House Speaker Michael Madigan nor Senate President John Cullerton called the other house’s bill for a vote. Madigan felt the Senate bill does not go nearly far enough, and Cullerton insisted the House bill violates the pension guarantee in the Illinois Constitution and would not survive a court challenge by the state’s powerful public-sector unions.

State Rep. David McSweeney, R-Barrington Hills, said he is hopeful Quinn will pressure the Senate to approve the much stronger House reform package.

“We passed a great bill out of the House, and I hope the governor pushes the Senate to help pass it,” McSweeney said.

But Rep. Barbara Wheeler, R-Crystal Lake, said she does not see what lawmakers will accomplish, and called Quinn’s move a publicity stunt as he prepares for next year’s governor’s race.

“I think it’s all pomp and circumstance for the governor’s race, and fear of looking weak in the upcoming political year,” Wheeler said. “I don’t know what the governor thinks he’s going to do.”

Quinn tried to meet Tuesday with legislative leaders, but while Cullerton attended, Madigan was a no-show and did not attend by telephone – his spokesperson admitted the powerful House speaker does not carry a cellphone.

Sen. Dan Duffy, R-Lake Barrington, said any special session without a solid plan in place and support from legislative leaders will be an exercise in futility.

“We’re in a financial crisis. However, what I don’t want to do is make a bad situation worse,” Duffy said. “If the governor does not get commitments from Madigan and Cullerton, it’s going to be a complete waste of time and taxpayer money.”

Quinn said he had contacted Madigan and Cullerton about calling lawmakers back. Quinn spokeswoman Brooke Anderson confirmed there is no deal, but said there’s time to seal one before lawmakers ride back into town.

Madigan and Cullerton, both Chicago Democrats like Quinn, adopted differing plans to catch up over 30 years on the pension debt after decades of state underfunding and what critics call overly generous benefits. The differences between the two powerful figures overrode the fact voters last year granted the Democrats supermajorities in both houses, meaning they can pass legislation without Republican votes.

Madigan rewrote a Senate plan that applied only to downstate and suburban teachers. The House plan increases by 2 percent what state employees must contribute to their pensions, and raises the retirement age for workers younger than 45. It also limits the 3 percent cost-of-living adjustment by calculating it based on $1,000 for each year of work, and raises the year when retirees can be eligible for it.

Cullerton said the House bill blatantly violates the constitutional provision that public pensions “cannot be diminished or impaired.” He crafted a bill, backed by public-sector unions, that gives workers and retirees a choice of either keeping their 3 percent COLA and not getting state health insurance, or keeping health insurance upon retirement and getting a smaller COLA.

Whatever action is taken June 19, if any, faces the extra hurdle of requiring more votes. After the spring session, the number of votes needed to pass legislation that takes immediate effect increases to three-fifths – or 71 votes in the House and 36 in the Senate. The threshold reverts back to simple majority Jan. 1.

Moody’s cited the state’s political indecision when it announced its downgrade.

“The Legislature’s political paralysis to date shows not only the magnitude of Illinois’ unfunded benefit liabilities, but also the legal and political hurdles to legislation that would make pensions more manageable,” Moody’s statement said.

While Moody’s and Fitch downgraded Illinois this week, Standard and Poor’s announced Thursday that it would keep the state’s rating at A-minus, trending negative – the company last downgraded Illinois in January. But S&P’s announcement included a rebuke that it did not expect state lawmakers to succeed in passing reform and that they “kicked the can down the road yet again”.

“We acknowledged at the time of the downgrade that action could occur during the regular legislative session but was unlikely given the poor record of the past two years and the lack of consensus on a plan to address the liability,” S&P’s statement said.

• The Associated Press contributed to this report.

What it means

Gov. Pat Quinn is calling the General Assembly into special session June 19 to deal with pension reform. His announcement came shortly after Illinois received its second credit downgrade in four days because of inaction on the pension crisis.

On the Net

The House pension reform bill is Senate Bill 1, and the Senate pension reform bill is Senate Bill 2404. You can read them both at www.ilga.gov.

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