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Last-minute snag derails pension reform

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SPRINGFIELD — A massive pension reform plan collapsed in the state legislature late today.

By Andrew Thomason

SPRINGFIELD — A massive pension reform plan collapsed in the state legislature late today.

House Republican Leader Tom Cross said pension reform will not be addressed before the end of the Legislature’s spring session. He said he wants a special session sometime this summer to address the issue.

“As we worked on it throughout the day … it became clear that there were problems with that bill. A number of folks on the other side of the aisle … were not going to support it after a change this morning and the governor’s office asked us to not call the bill,” Cross said late this evening.

Gov. Pat Quinn, in a statement, said the state is "very close" to a solution that would stabilize the pension system, "but we are not there yet."

Quinn said he would meet with legislative leaders next week to try to reach a pension reform agreement and bring the legislature back into session to vote on it.

The plan Cross had proposed, embodied in Senate Bill 1673, would have given current public employees and retirees the choice of either taking lower cost-of-living adjustments and getting access to the state health-care program, or keeping their higher COLAs and not having access to the state health-care program.

The Cross plan emerged House Speaker Michael Madigan, D-Chicago, transferred control of the legislation to Cross after a spat between Republicans and Democrats over the state's budget.

Republicans refused Wednesday to cooperate on the state's budget because of the so-called proposed "cost shift" of pension responsibilities for teachers and college employees from the state to local employers.

Cross and other Republicans equated the shift of costs, which would have taken place over at least six years, to a property tax increase, classroom spending cuts or some combination of both.

The state now makes the employer's pension contribution for teachers and college employees. Democrats argued that since school districts and colleges control the pay upon which pensions are based, they should be responsible for pension contributions.

Cross said his plan would have given local employers some responsibility for pensions by making school districts and colleges responsible for covering end-of-career pay raises.

Currently, the state covers end-of-career raises of up to 6 percent that count toward pensions. Anything above 6 percent the school districts and colleges must cover.

Cross' plan would have knocked that down to zero, starting with any new collective bargaining agreement.

State Rep. Elaine Nekritz, D-Northbrook, was critical of Cross' plan, especially the change of the state covering end-of-career raises from 6 percent to zero percent, during an Illinois House Personnel and Pensions Committee hearing today.

"Is that going to be an increase cost to the school districts?" Nekritz asked.

"The answer's yes," Cross said.

"Is that going to be a property tax increase?" Nekritz asked.

"Let's hope not," Cross said.

"And why would that not be a property tax increase?" Nekritz asked.

Cross skirted the question, saying schools must factor pay increases into their budget, just like any other costs.

Cross didn't have an estimate for the amount the state would save by not paying for end-of-career raises.

Teachers unions and other groups that represent schools came down hard on Cross' plan, saying they liked it even less than the previous proposal.

"It takes away the rights of our members to ever receive any kind of salary raises, because the districts are strapped and will not want to provide extra over zero percent," Cinda Klickna, president of the teachers' union, the Illinois Education Association.

Brent Clark, executive director for the Illinois Association of School Administrators, a group that lobbies on behalf of superintendents and principals, said Cross' idea makes budgeting nearly impossible.

"From a predictable, controllable standpoint, this is a tough issue for school districts to manage, we just simply can't even come close to managing it," Clark said.

Jerry Stermer, Gov. Pat Quinn's budget director, testified this morning in favor of Cross' plan, saying it would save the state between $66 billion and $89 million over 30 years and eliminate the $83 billion unfunded pension liability.

Quinn also has supported Madigans' pension reform plan and a separate pension reform plan in the Illinois Senate, both of which included the cost shift element and the choice between better cost-of-living increases or access to state health care.

The committee approved Cross' plan, which was awaiting a vote on the House floor before the deal fell apart late inthe day..

Reporter Andrew Thomason can be reached at [email protected]

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