Pension reform faces uncertain path forward
SPRINGFIELD -- In April, Gov. Pat Quinn stepped before cameras and reporters to put nearly all of his political pull behind two enormous efforts to try to fix the state's finances: Cutting back spending on health care for the poor and taking a bite out of teachers' and state workers' pension benefits.
On Friday, he took to a podium and praised lawmakers for cutting health care spending.
But the path toward reforming the state's deeply troubled retirement systems is unclear, with efforts derailed in past days by dueling proposals in Springfield that could cost suburban school districts millions of dollars as state lawmakers look to transfer some pension costs onto local officials.
"I think we're very, very close," Quinn said of a deal over pensions.
The coming weeks might show how close.
After a short break, lawmakers are poised to start meeting again, trying to find a compromise that again is likely to include scenarios that cost suburban schools more.
They'll do it over the heavy protests of unions that represent teachers and state workers, who argue that lawmakers caused the state's pension mess and their members shouldn't have to suffer reduced benefits to fix it.
A proposal to cut a yearly increase in pension benefits for working and retired teachers, university employees, state workers and lawmakers was embraced by at least some Republican and Democratic lawmakers, providing some common ground in the debate.
The Illinois Senate approved a plan that would do just that for state workers and lawmakers, leaving plans to do the same for teachers and university workers in limbo.
Senate President John Cullerton said that plan could provide an outline going forward, but cuts for teachers and university workers were the most contentious.
So the focus may turn to how lawmakers can tweak their plans to force local school districts, community colleges and universities to pick up some of the state's pension costs.
"What we have to do is find common ground between both proposals," Quinn said.
Coming up with a new idea is possible, but it could be tricky as lawmakers have already used creative policy ideas to get this far.
"If I'd thought of it (another plan), I would have put it on the table," state Rep. Elaine Nekritz, a Northbrook Democrat.
An existing plan to phase in additional pension costs to school districts by adding 1 percent a year to their payroll costs over several years could be scaled back, easing it in at half a percent or so a year. Democrats argue that because school boards set teacher salaries -- and therefore decide how big their pensions are -- the state shouldn't be responsible for the retirement costs that result from those decisions.
"If someone else can award a benefit and send a bill to the state, that's not a good incentive," Nekritz said.
Republicans could change their original plan to try to draw compromise too.
Now, school districts are required to pay the pension costs resulting from end-of-career teacher and administrator raises of more than 6 percent a year.
House Republicans proposed districts should have to pay the pension costs that result from any teacher raises at the end of their careers -- no matter how big.
State Rep. Darlene Senger, a Naperville Republican, said her party is open to negotiate, maybe proposing a less severe plan along the same lines.
"I think we should go through some analysis on what we could do there to make that less costly," Senger said.
Senger, who along with Nekritz was part of Quinn's pension reform team, said she's happy with lawmakers' effort to understand the math behind the state's pension problem and what kind of ideas could help save money.
It's politics, though, that they couldn't work out before their Thursday deadline.
For that reason, the solution is even more difficult.
Any legislation that would be implemented before June 2013 would need a three-fifths vote -- difficult when lawmakers struggled to get even a majority.
Lawmakers could just delay when a new pension law would become effective until 2013 to get around that problem, but that would mean another state fiscal year with rising pension costs. And they could wait until after the pressure of the Nov. 6 election has passed, but that route raises the same issue of rising costs.
Its not uncommon for lawmakers to blow deadlines. An effort to give tax breaks to Sears Holdings Corp. was pushed back several times last year before a December threat by the company to leave Hoffman Estates spurred action.
Lawmakers didn't need extra votes for that effort, though, and the political pressure statewide on pension reform is far greater.
For that reason, it could be weeks or longer before an agreement is reached.
"It's totally up in the air," Senger said.