Pension showdown looms today -- or does it?
SPRINGFIELD -- The future of teachers' and state workers' retirements is at stake today.
Just like it has been all year.
Is today the day?Special session: Gov. Pat Quinn called lawmakers into special session today to solve the state's pension crisis.
What's the issue? Public pensions eat up a growing share of taxpayers' dollars and the pension debt is $83 billion. But changing that means taking away some retirement benefits.
Will lawmakers act? The debate has been going on for months and remains heated, so some critics say one day under the Capitol dome isn't enough.
What's next? If lawmakers don't act, Quinn could call more special session days. Or the issue could go on hold until after the Nov. 6 election.
State lawmakers are set to meet in Springfield to debate how -- or if -- they should cut back on Illinois government pensions. Gov. Pat Quinn has called legislators to the Capitol, saying the state's fiscal future depends on action now.
It's a complex issue that hits home for suburban taxpayers -- even those who don't have pensions.
But it's a war that's been waged all year long, so some critics don't think much will get done in one day, leaving the debate to rage on as politicians march toward the Nov. 6 election.
Here's what you need to know.
Everyone has a stake
Public employees and retirees lose out if lawmakers cut benefits. But they're not the only ones who have a stake.
Ten years ago, the state paid about $1.5 billion into the state's pension systems. This year, the state paid in about $5.2 billion -- billions more that can't be used for things like schools, care for the disabled, maintaining state parks and operating safe prisons.
The number is on track to continue to rise, putting a further squeeze on those state services people depend on.
Yet, cutting people's retirement benefits is a very tough vote for lawmakers, especially in an election year.
"I hope we can in the next couple days get everybody to jump in the water at the same time," Quinn said this week. "You know, hold hands, and let's go together."
How big is the problem?
The last official number used to describe the pension debt is $83 billion, though most people acknowledge it's on the rise -- perhaps as high as $92 billion by June 2013.
Pension debt means the state has about $83 billion less in investments than it eventually needs to pay out retiree benefits. Put another way, the state has about 44 percent of the money it needs.
And $83 billion is a lot of pension debt.
For perspective, lawmakers are taking heat for the $40,000 worth of per diems, mileage reimbursements and other costs it takes to have today's special session, especially considering they might leave Springfield without having done much.
If lawmakers saved that $40,000 per session day for 60 days of session a year, it would take them 34,583 years to use those savings to pay down Illinois' retirement debt.
Most observers want a solution sooner.
How did it get this bad?
A bipartisan report from earlier this year shows that about 44 percent of the debt is because lawmakers and governors didn't pay enough into the retirement funds over the years -- sort of like skipping payments on a 401(k).
About 22 percent of the problem comes from poor investment returns, especially recently during the recession. About 9 percent is because of increases in benefits over the years.
The other 25 percent stems from a variety of other factors.
What's the plan?
There is no agreed-to plan, yet.
"Everyone needs to be an adult," said House Republican Leader Tom Cross. "Everybody needs to get in a room and work it out."
One idea would be reduce how much of a pension bump retirees get every year.
Republicans said Thursday that idea might not save enough, so the retirement age could be raised to 67, and lawmakers might consider asking teachers and others to pay more toward their own pensions.
In addition, some Democrats want local schools to pay what has been the state's share of teacher pensions, an idea that could cost some districts millions and is strongly opposed by most Republicans.
Democrats might try to push a proposal that would reduce pension benefits for just state workers and lawmakers, leaving teachers and university workers alone.
"I think that's progress," said House Speaker Michael Madigan.
But critics have said that won't save enough money and everyone should be involved at once.
Unions ask, why us?
Union officials say average pensions are modest -- about $46,500 a year for a teacher and about $29,000 a year for a state worker. Plus, they argue, employees have always paid their share in full, so it's unfair for the state to cut benefits because past lawmakers and governors didn't pay enough.
This week, union leaders said they'd agree to employees parting with a little more of their own salaries to help fix the problem if the state is forced by law to pay up every year, too.
But top Democrats haven't signed on.
If top lawmakers and Quinn cook up an agreement by the end of the day today, expect a lawsuit from union officials as soon as the governor signs it into law.
If there's no agreement, Quinn could call lawmakers back to Springfield again. Or the debate could wait until after the election.