SPRINGFIELD -- Powerful Illinois House Speaker Michael Madigan's decision to write legislation cutting teachers' and state workers' pensions could reignite the push for lawmakers to reach agreement on the issue this month.
Madigan's proposal, introduced Tuesday, resembles one that has been pushed by Democratic state Rep. Elaine Nekritz of Northbrook, which could have saved nearly $2 billion a year.
Madigan's pension planIllinois House Speaker Michael Madigan new pension cost-cutting proposal would:
• Try to guarantee the state pays its share into pension funds every year.
• Cap how much of an employee's salary can count toward a pension at about $109,000. That number would grow slowly over the years.
• Reduce retirees' annual cost-of-living adjustments. A retiree would get a 3 percent annual increase calculated on $1,000 for every year worked. Someone who worked 20 years would get an annual increase of 3 percent of $20,000, or $600.
• Require employees to pay 2 percent more of their salaries toward retirement.
• Raise the retirement age by between one and five years, depending on how old a worker is when the law takes effect.
Savings estimates aren't yet available for the new bill, which would raise the retirement age for public employees, cut retirees' annual pension raises and cap how much of a worker's salary could count toward calculating his or her pension.
A Nekritz plan to have local school districts contribute to a 401k-style retirement fund for teachers has been scrapped from the bill Madigan filed, meaning at least for now local schools wouldn't have to pick up more costs.
Madigan has strongly backed a more aggressive plan to have school districts pay more toward teachers' pensions, so he could try to move that idea separately through the legislature later.
The longtime legislative leader's stamp of approval on a proposal carries significant weight at the state Capitol, so Madigan's backing of specific legislation Tuesday could be seen as a sign he's willing to lean on lawmakers hard to move a pension cost-cutting proposal to Gov. Pat Quinn's desk. The legislative session is scheduled to end May 31.
"I think it makes a strong statement about his commitment," Nekritz said.
But top Democrats in the Illinois Senate have labeled proposals similar to Madigan's as unfair and illegal, so the debate is far from settled.
A House committee could get its first crack at the proposal this morning.
Within hours of Madigan's move, union leaders had mobilized, asking their members to call lawmakers and vote against what they called a "mega-bill."
Teachers and workers have argued politicians created Illinois' financial problems, so their retirement futures shouldn't suffer as punishment.
Unions objected to Madigan's proposal, predicting it would be overturned and thus not save the state any money.
"Should it become law, we believe a successful legal challenge is all but certain, with the bill saving nothing and the state's budget problems made worse," read a statement from the We Are One Illinois union coalition.
One of the state's biggest budget problems is its $100 billion in pension debt and the rising retirement costs that can divert money from other programs like education, prisons or health care for the poor.
Top Illinois Senate Democrats have dug in on their opinion that proposals to take a bite out of public employees' retirements without offering a concession in return goes against the Illinois Constitution. So compromise faces obstacles.
Madigan's move was especially symbolic of that disagreement. He filed his legislation by rewriting Senate President John Cullerton's favored pension legislation, one that the Illinois Senate approved in part last month.
In a state Senate hearing earlier Tuesday, Cullerton pushed back against deep pension cuts proposed by state Sen. Jim Oberweis, a Sugar Grove Republican. The Illinois Constitution says pension benefits can't be diminished.
"We're not making this stuff up," Cullerton said. "This is a constitution."
Madigan was a delegate at the 1970 convention that wrote the Illinois Constitution, and his plan includes a lengthy passage that eventually could serve as an attempt to convince the state Supreme Court not to toss the law.
"Notwithstanding these many steps and their major fiscal, economic, and human impact, the fiscal situation in Illinois continues to deteriorate," it reads in part. "Cuts as well as the inability to pay bills due and owing has had a significant impact on each branch of government, units of local government, social service providers, and other vendors."
Madigan's plan likely will draw support from at least some Republicans. Many of the concepts in the proposal had been worked out already between Nekritz and House Republican Leader Tom Cross of Oswego.
State Rep. David Harris, an Arlington Heights Republican, said test votes in March on the biggest cuts in Madigan's proposed legislation show there's support in the Illinois House.
"The toughest vote, in many respects, has already been taken," Harris said.
The vote is difficult because lawmakers are pulled in opposite directions by the need to fix state finances that are among the worst in the nation and the desire to be fair to the state's retirees and employees.
"No matter what we vote for, people are going to be upset," said state Rep. Fred Crespo, a Hoffman Estates Democrat.