Pension overhaul advances in Springfield

But 'unconstitutional' measures face fierce opposition from labor, targeted lobbyists

Wednesday, November 09, 2011

SPRINGFIELD— — A major overhaul of the way Illinois government handles pension benefits for current workers won a key victory Tuesday, but its fate remains uncertain because of heavy union resistance.

House and Senate lawmakers also advanced proposals to crack down on pension abuses uncovered in Tribune/WGN-TV investigations, including efforts to undo a law that allowed two lobbyists to be eligible for sizable teacher pensions after substitute teaching for a single day.

The sweeping pension changes, presented by House Republican Leader Tom Cross and Democratic Speaker Michael Madigan, would establish three retirement options for government workers to choose from going forward. State employees could keep their retirement benefit in place but pay more; take smaller benefits but pay no more; or set up a 401(k)-style plan that would give employees more control of their investments but also see them roll the dice on the markets.

Employees would hang on to the benefits they've built up to this point, an attempt to address concerns that the state constitution doesn't allow pensions to be scaled back in midstream.

Cross acknowledged "we're not stopping the bleeding completely." But Cross said action must be taken now because pension costs are scheduled to rise for years. Pensions in the next state budget will be $900 million higher than this year's more than $6 billion price tag for annual contributions and borrowing costs. But Cross said a new bipartisan study showed the reforms will lead to $45 billion in savings over many years.

One of the major proponents of the plan, former Republican Illinois Attorney General Ty Fahner, president of the Civic Committee of the Commercial Club of Chicago, said the hard vote for lawmakers will never get easier.

Labor leaders lined up against the measure.

"Pension reform on the backs of working families is unconscionable and unconstitutional," said Michael Carrigan, president of the Illinois AFL-CIO.

Rep. Dan Biss, D-Evanston, noted actuaries had yet to calculate the worst-case scenario if the bill failed to work. He urged taking up the legislation next spring, when he said he would vote for it if nothing else better comes along.

The House Personnel & Pensions Committee voted 5-4 to send the bill to the full House.

In other action, the panel approved a bill that would rescind a 2007 law that allowed lobbyists Steven Preckwinkle and David Piccioli of the Illinois Federation of Teachers to get in line for sizable state teacher pensions. They merely had to work a single day as substitute teachers. They had no prior teaching experience, prompting sponsoring Rep. Jack Franks, D-Marengo, to call their arrangement "obscene."

"The bill is so blatantly unconstitutional on its face that Mr. Preckwinkle and Mr. Piccioli think it merits no other comment," said David Ormsby, the lobbyists' spokesman.

In the Senate, lawmakers introduced a separate proposal that would boot the two lobbyists from the teachers pension system but also sought to stop a series of pension abuses by leaders from a variety of Chicago-area labor unions.