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Pension cuts postponed in Illinois Legislature

  • Written by The Chicago Defender
  • Published in Chicago
SPRINGFIELD, Ill. (AP) — The Illinois Legislature's spring session may be over, but the work isn't. The governor and legislative leaders say they'll call lawmakers back to Springfield soon for another try at controlling pension costs that contribute to the state's deep budget problems.

Coming back for a special session carries risks. Legislators could end up with a pension proposal they dislike even more than the two they rejected this week. They could find themselves locked in a long, fruitless session a few months before facing voters at the polls. They could fail again.

The General Assembly adjourned its session early Friday morning after approving a tight budget and a major gambling expansion. They deadlocked on pension costs as House Speaker Michael Madigan and Minority Leader Tom Cross jousted over two different proposals.

Democratic Gov. Pat Quinn said he will work with legislative leaders to come up with an agreement on the $83 billion problem and call lawmakers back to the Capitol.

"We have made great headway on stabilizing our pension system and we are very close to a solution, but we are not there yet," Quinn said in a statement.

Legislators hoped to tackle three big financial issues this spring: a budget that would require deep cuts to some programs, a $2.7 billion shortfall in the Medicaid program, and government pension systems that were shockingly short of money but still eating up a big chunk of state revenues.

They accomplished the first two, angering many groups in the process. Advocates for education, health care and social services predicted budget cuts will increase suffering and harm schools. Merchants argued an increase in cigarette taxes will hurt businesses across the state.

But attempts to address pensions failed.

Negotiators abandoned proposals to raise retirement ages for public employees or make them contribute more to their pension funds. They settled on trying to pressure workers into accepting smaller cost-of-living increases when they retire, which would save the state billions of dollars in decades to come.

It would apply to retired state employees, downstate and suburban Chicago teachers, university staff and other public employees. The major exception is judges, who were left out to increase the plan's chance of withstanding a court challenge.

Then Madigan and Cross clashed over another part of the proposal.

Madigan, D-Chicago, wanted to make schools, community colleges and universities gradually start paying the future retirement costs for their employees. Right now, only Chicago schools pay their own retirement costs; the state pays for the rest.

Republicans and some Democrats objected fiercely, saying it would force schools to raise property taxes.

After a bitter confrontation on the House floor Wednesday, Madigan dumped the issue in Cross's lap. Cross, R-Oswego, went forward with a plan that left out the pension shift but would have made schools responsible for any retirement costs stemming from generous, late-career raises to employees.

That approach, Cross said, would make employers pay the cost of raises they hand out instead of letting the state shoulder that responsibility.

But with Madigan making clear he opposed the legislation, Democratic votes were hard to find. Chicago Mayor Rahm Emanuel also opposed it, saying Chicago taxpayers shouldn't be required to pay for their own teachers' pensions and contribute to the pensions of teachers throughout the state.

Eventually, Cross announced he was not going to seek a floor vote.

Cross said the governor asked him not to call the bill for a vote. Quinn's staff said the governor simply agreed with Cross's own conclusion that running the bill would be a mistake.

Cross and Madigan said they intend to search for a version of the pension plan that can pass. Neither indicated he was ready to back down.

"This is a difficult issue," Cross said. "We need to find — in a bipartisan way, both sides — a solution to this pension issue."

The new budget was passed in a series of Senate votes that largely followed party lines. It had passed the House earlier, so the Senate action sent it to Quinn's desk.

Democratic leaders said the budget includes painful cuts that are necessary because state expenses keep climbing while revenues remain mostly stagnant. Education spending would decline by nearly 4 percent, child welfare by almost 7 percent and corrections by more than 3 percent.

Sen. Heather Steans, D-Chicago, said it cuts $700 million from the parts of the budget where officials have discretion to make reductions. When mandatory items such as pensions are included, overall spending increases about $400 million, or one-tenth of 1 percent, to $29.36 billion.

Republicans focused on that picture of the budget.

"Two years in a row, spending is going up. There's no dispute about that," said Sen. Matt Murphy, R-Palatine.

The budget also would cut the state's borrowing power to pay for road construction and other transportation needs. Instead of the $2.4 billion requested by the Transportation Department, the budget authorizes only $1.6 billion. IDOT officials say that will be enough to continue current road plans but, for technical reasons, could increase the state's costs.

The Senate also sent the governor a gambling bill with a 30-26 vote. It would allow a casino in Chicago, four riverboat casinos in other cities and slot machines at race tracks. Quinn opposes the expansion and could veto it.

Associated Press writer Shannon McFarland contributed to this report.

Copyright 2012 The Associated Press.

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