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updated: 7/3/2013 7:06 PM

Pension panel to study university proposal

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  • State Sen. Kwame Raoul, a Chicago Democrat, is the chairman of a legislative committee working to forge a compromise on Illinois' $97 billion pension crisis.

    State Sen. Kwame Raoul, a Chicago Democrat, is the chairman of a legislative committee working to forge a compromise on Illinois' $97 billion pension crisis.
    Associated Press/June 27, 2013

Associated Press

The leaders of a legislative committee trying to forge a compromise on Illinois' $97 billion pension crisis said Wednesday a plan proposed by colleges and universities provides an "attractive framework" for reform and they want to study it further.

Committee Chairman Sen. Kwame Raoul and Vice Chairwoman Rep. Elaine Nekritz said they want to analyze how much such a plan -- with some "tweaks" they did not disclose -- would save the state if applied to its other public-employee retirement systems. Such an analysis will mean the panel, as expected, will miss the latest deadline set by Gov. Pat Quinn.

The proposal, drafted largely by the University of Illinois Institute for Government and Public Affairs, requires workers to pay more toward their retirement and links cost-of-living increases to inflation. It also shifts the employer pension contribution -- currently paid by the state -- to the schools over time, and guarantees the state will make its full annual payment to eliminate the pension debt.

Southern Illinois President Glenn Poshard told the 10-member bipartisan committee that universities see the plan as "our last best hope going forward" and a way to achieve "long-term stability based on shared sacrifice."

Raoul, a Chicago Democrat, said after the hearing: "I think we can say that framework is an attractive framework."

Nekritz, a Democrat from Northbrook, agreed, though both lawmakers were quick to say the committee is still exploring options as it tries to find a proposal that can get enough votes to pass both the House and the Senate. They've scheduled a third public hearing for Monday in Springfield.

Illinois has the nation's worst state pension shortfall, due largely to lawmakers voting over decades to either skip or short the state's pension payment. Making that full payment now costs the state more than $6 billion each year, an amount that takes money away from other areas, such as schools and public safety. The pension mess also has prompted the three major credit-rating agencies to lower Illinois' credit rating to the lowest of any state in the nation.

Yet for years lawmakers have failed to fix the problem, even as other states took action on their own shortfalls.

The legislature voted last month to form the conference committee after it became clear the House and Senate were at an impasse over how to solve the pension problem.

Raoul and Nekritz said Wednesday the committee is throwing out those rival proposals -- one sponsored by House Speaker Michael Madigan and one by Senate President John Cullerton -- and trying to come up with a new plan that achieves some of the key goals of each chamber. That means a plan that achieves enough cost savings but also is fair to state workers and retirees and is likely to survive a court challenge.

"It's a very complicated, delicate walk that I think we can do," Raoul said. "The good thing is the conference committee is having some really good conversations."

But he said the process will take at least a few more weeks, pushing the panel beyond the July 9 deadline set by Gov. Quinn.

The news brought a strong response from Quinn spokeswoman Brooke Anderson, who said legislators have had plenty of time to reach a deal.

"The deadline stands. This is an emergency," Anderson said. "Every day legislators come up with another excuse on why they can't get their job done is another day that taxpayers are on the hook for millions of dollars."

Quinn has yet to sign off on part of the state budget or a number of legislative priorities, leaving open the possibility he could use his veto power -- or the threat of it -- as an added incentive for lawmakers to act quickly. The governor's office declined to comment on whether Quinn was considering such an approach.

Raoul called Quinn's insistence on the July 9 deadline "schizophrenic at best," saying the governor's office just sent the committee new proposals on Tuesday that it wanted analyzed and considered. That analysis takes about two weeks, Raoul said, adding that it would be irresponsible for lawmakers to push legislation through in a matter of days even if they had the data they needed.

Anderson said the request Quinn sent the panel wasn't new, and that the analysis -- like the analysis the committee is now asking for on the university plan -- could have been done months ago.

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