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Article updated: 3/1/2013 7:34 AM

Pension cuts fail badly in test votes in Illinois House

By Mike Riopell

SPRINGFIELD -- Illinois House Republicans Thursday refused to participate in test votes on severe public pension cuts and Democrats rejected the proposals harshly.

Two proposals by House Speaker Michael Madigan to slash retired teachers' and state workers' yearly cost of living pension hikes were defeated by 2-66 and 5-62 votes.

Another to raise the retirement age for teachers and state workers to 67 got only one vote in favor, from Madigan. And one to have employees pay 5 percent more toward their retirements got three "yes" votes.

Republicans didn't vote at all, saying the test vote was a political ploy by Madigan.

"What are we doing here Thursday?" asked House Republican Leader Tom Cross of Oswego. "Illinois politics at its finest. Another day of games," he said.

The political theater was another reminder of how difficult it will be for lawmakers to compromise on a way to cut the state's quickly escalating pension costs. Because the rejected proposals were for more severe cuts than most of the major bills up for debate, Thursday might serve as a guideline on how far lawmakers are willing to cut pension benefits.

Though many lawmakers of both parties campaigned last year on finding a way to solve the state's budget solution, the gap between that promise and finding a workable proposal might be turning into a gulf.

The issue has been a huge one for the state for more than two years with no clear resolution in sight. The state's annual retirement payment this year will jump by about $1 billion, hampering Illinois' ability to pay for schools, care for the disabled and other programs.

That gridlock was one reason to put the unusual test votes to lawmakers, said state Rep. Elaine Nekritz, a Northbrook Democrat. She said the move could "shake things up."

"We all need to find something we're for," she said.

Both Cross and Nekritz got applause from lawmakers following floor speeches calling for reform compromises, but union leaders used the votes to declare victory.

"The House forcefully rejected unfair, unconstitutional pension cuts Thursday," read a statement from the We Are One Illinois union coalition. "Lawmakers should build on this momentum to abandon tired approaches and work with us on serious, coalition-endorsed legislation."

In the meantime, state Rep. Tom Morrison, a Palatine Republican, threw another idea onto the growing pile of pension proposals.

He called for public employees to be moved to a 401k-style system instead of having pensions. They'd keep the pension benefits they've already earned and use the 401k-style system going forward.

"By moving away from outdated pension systems we can take back power from Springfield and give it back to the individual workers," Morrison said at a news conference in the Capitol Thursday.

Morrison's plan is backed by the Illinois Policy Institute, a conservative think tank. Its leaders argue phasing out pensions systems is the best way to save the state enough money.

Unlike some other plans on the table, Morrison's does not retroactively change pension benefits that state workers have coming to them.

"But in order to fully protect the benefits that they've already earned, we've got to change how future benefits will be earned," Morrison said.

But in a state ruled by Democrats, the proposal might not be politically viable. Nekritz said Thursday's test votes show that lawmakers aren't willing to cut benefits beyond what they rejected.

"We're not willing to go beyond this, for sure," she said.

State Rep. Jack Franks, a Marengo Democrat, called on lawmakers to drop everything and do nothing else until pension reform legislation is approved.

"All sides in the debate have succeeded in little besides prolonging the brinkmanship and reaping the wrath of bond rating agencies," Franks said in a statement.

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