Alliance Legislative Report 98-21
Distributed via Email: June 14, 2013
GOVERNOR CALLS LEGISLATORS BACK
As a surprise to few, Governor Pat Quinn is calling the legislature back into session next week to approve pension reform legislation. The General Assembly adjourned for the summer on May 31 without approving anything regarding pension reform, an issue that the governor has pledged to address. The chance of the pension issue being resolved next Wednesday, however, is remote according to many Capitol observers.
In his proclamation declaring the Special Legislative Session for Wednesday, June 19, the governor stated that the state continues “to face an unprecedented pension crisis that, unchecked, hurts our economic recovery, downgrades the state’s credit rating, and threatens the continued delivery of vital services including education, public safety and healthcare”. He places the cost of not addressing pension reform at $17 million per day because of compounding current unfunded pension liability.
Leading Up to This Week
It is unclear, however, what legislators will do on Wednesday. The governor, at the time of the proclamation, did not specifically identify a pension bill he would support. When legislators left the Capitol in May it was stalemate with Senate President John Cullerton and House Speaker MichaelMadigan each supporting their own versions of pension reform. The Speaker did not call for a vote the Senate pension proposal that allowed for employees to “elect” to take lesser pension benefits – a bill that the state’s major employee unions supported. In turn, the Senate defeated two House pension bills on the Senate floor. One bill decreased future pension benefits for the major state pension systems and one shifted the pension costs of higher education onto universities and community colleges.
The Governor has called two meetings with the legislative leaders since the legislature’s adjournment. After the second, the Governor indicated that he would support the concept of including both the House version and the Senate version in the same bill. The theory is that if the House version (salary cap, COLA adjustment, increase in retirement age, all with no participant or annuitant input) is declared unconstitutional, then the Senate version (which contains the “consideration” provision for employees and annuitants to make the decision to lessen pension benefits) becomes law. This approach of combining the two proposals was first introduced late last year by Senator Cullerton.
What Happened This Week
Move forward to this week though, and it appears that these meetings and proposals have not been well-taken by Speaker Madigan. Madigan filed an amendment to Cullerton’s bill that would delete everything in it and replace it with the provisions of the House proposal. This would be the same proposal that the Senate defeated on May 31on a vote of 16-42. Following this path, the House would again pass the Madigan pension plan to the Senate where it would meet an uncertain fate. Publicly, Speaker Madigan has maintained his position with the quote: “I think the Senate should approve the House pension proposal”.
The provisions to shift the normal costs of the Teachers’ Retirement System (TRS) onto local school
districts have not been included in any of these current pension reform proposals. The issue is still very much alive, but Speaker Madigan has stated that the cost shift would be a part of separate legislation.
In May, the House did approve a bill to shift some of the costs of the State University Retirement System onto universities and community colleges. The Senate defeated this legislation on a vote of 21-33-5. However, the proposal will be the subject of a Senate committee hearing next week.
For more background on the pension proposals, please refer to Alliance Legislative Report 98-19
In the special session called by the Governor, only pension legislation can be considered. However, it has been the practice that the House Speaker and Senate President call the regular session into order to run concurrently with the Special Session. Two things happen under this scenario: legislators do not have to be paid the per diem in a regular session in the summer; and any legislation may be considered in a regular session.
There does not seem to be any other non-pension legislation on the radar screen at the moment, except for one bill set for a hearing in the Revenue Committee in the House.
HEARINGS SCHEDULED FOR NEXT WEEK
SENATE EXECUTIVE COMMITTEE
Tuesday, June 18, 3:00 p.m., Room 212, State Capitol
Subject Matter: Comprehensive Pension Proposal for Public Higher Education - Contents of SB 2591 and SB 1687
HOUSE PERSONNEL AND PENSIONS COMMITTEE
Tuesday, June 18, 4:30 p.m., House Chamber Floor
SB 2404 ( Cullerton) contains the Senate union-backed pension reform plan that gives employees and annuitants “consideration” before adjusting any pension benefits. A House amendment is filed for the bill which contains Speaker Madigan’s pension reform plan (salary cap, COLA adjustment, increase in retirement age with no participant or annuitant input).
HOUSE REVENUE AND FINANCE COMMITTEE
Wednesday, June 19, 11:00 a.m., Room 114, State Capitol
HB 1451 ( Crespo, D-Hoffman Estates) creates the Interactive Digital Media Tax Credit Act to entitle interactive digital media companies that meet certain requirements to an income tax credit based on the amount of the Illinois labor expenditure and Illinois production spending approved by the Department of Commerce and Economic Opportunity for the production.
This legislative report is written and edited by the lobbyists of the Illinois Association of School Boards to provide information to the members of the organizations that comprise the Statewide School Management Alliance.
Bill Text/Status: Illinois General Assembly www.ilga.gov
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