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Article updated: 1/8/2013 10:04 PM

Springfield pension talks back to drawing board

By Mike Riopell

SPRINGFIELD -- The Illinois General Assembly ended its term Tuesday without a new law to curb the state's quickly rising pension costs, an issue that is sure to dog the new class of lawmakers starting their jobs Wednesday at the Capitol.

With last-ditch efforts to reach an agreement having failed, the slate is wiped clean and all potential elements of a future pension deal are back on the table. That includes the previously abandoned plan to have suburban schools pay millions of dollars more for teachers' pensions.

Yet another cut to the state's credit rating could come as early as Wednesday.

State Senate President John Cullerton and state Rep. Elaine Nekritz plan to file competing bills Wednesday and kick off yet another round of talks.

Though neither plan has met success so far, Nekritz, a Northbrook Democrat in the middle of the debate, hopes the new General Assembly will provide more backing. Many of the three dozen rookies members being sworn in today campaigned on solving the public pension mess.

"That might mean that those new people are more willing to address this issue than the others," she said.

A compromise to solve the difficult problem proved too politically complex for lawmakers in the waning hours of their terms Tuesday.

Eliminating the controversial plan to shift costs to local schools, for example, brought more suburban and downstate lawmakers on board, but some Chicago officials' support might have been lost.

That wasn't the only contentious issue. Some lawmakers wanted to see deeper cuts to pension benefits. Others wanted to see less.

"It would be great if we had one thing we could focus on and get it corrected, but that's not the way this works," Nekritz said.

Now, as the new lawmakers sworn in today craft their budget due in May, they'll have to find at least $1 billion more to pay into the state's retirement funds -- nearly enough to pay for the whole Illinois prison system.

"It's crowding out all the money we would use for education," said Cullerton, a Chicago Democrat. "So we know how important it is. And, obviously, we're worried about credit downgrades as well."

Lawmakers tried to find a solution Tuesday. In the end, a House panel approved an eleventh-hour proposal to form a bipartisan commission to make the pension cuts. But it died on the House floor.

Earlier in the day, Gov. Pat Quinn urged lawmakers to work all day on the matter. But he offered few, if any, new proposals.

"We cannot allow our state economy to be held hostage by political timidity," Quinn said.

Some suburban lawmakers have rejected the idea that their local schools should have to pay more to take on pensions costs that have been handled by the state for generations.

State Rep. Fred Crespo, a Hoffman Estates Democrat, said if that's part of a new plan, then Illinois should look at sending more state money to help suburban schools.

"If it's going to happen, I think we need to talk about these things," Crespo said.

Along with Nekritz's and Cullerton's bills, other lawmakers could chip in different proposals. State Rep. Tom Morrison, a Palatine Republican, said he wants to see a 401(k)-style option so public employees would control their retirement planning and the state would see significant savings.

"Why has the private sector gone in this direction?" Morrison said. "It's because the (pension) systems aren't sustainable in the long haul."

First, though, the House and Senate may have to come to an agreement on what the Illinois Supreme Court will let them do. The Illinois Constitution says retirement benefits cannot be "diminished."

Cullerton and the plan proposed by Nekritz and Rep. Dan Biss are at odds on that point. Biss, an Evanston Democrat, moves to the state Senate.

Cullerton's plan would let workers keep their current pension benefits if they agree to forego help with their health care in retirement. If they take less generous retirement benefits, they can have state-subsidized health care.

Giving a choice, Cullerton says, is more likely to pass legal muster. But the Nekritz-Biss plan offers no such choice.

In the meantime, lawmakers will return to their districts later this week to hear from teachers and taxpayers once again about what their next step should be.

"I wish I had an easy answer," said state Rep. David Harris, an Arlington Heights Republican. "There are no easy answers."

Ÿ Daily Herald staff writer Doug T. Graham contributed to this report.

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