Ill. pension fix derailed; officials to try again
The Associated Press June 3, 2012 9:22PM
Updated: July 7, 2012 8:19AM
SPRINGFIELD — Shortly before 11 a.m. Thursday, Rep. Daniel Biss voted in favor of a plan to fix Illinois’ public-employee pension systems. It was a Republican plan and Biss and his fellow Democrats on the House Pension Committee didn’t like it, but it was better than letting one of the nation’s worst pension problems fester.
Three hours later, Biss found out through Twitter that his party leader, House Speaker Michael Madigan, planned to vote against the bill when it came up in the last hours of this spring’s legislative session.
That’s when the wheels started falling off.
What had looked like an acceptable response to an $85 billion pension problem was now in trouble. Within hours, the sponsor announced he couldn’t pass the legislation and the session would end with no decisions on the state’s most pressing financial problem.
Gov. Pat Quinn says he’ll call legislative leaders back to Springfield within the next week to resume the search for an answer, but tensions remain high after a week of bitter words, clashing agendas and unclear motivations. Both Madigan and House Republican Leader Tom Cross are pushing their own solutions, while strategizing how to protect not only their constituencies but a rank and file who don’t want voters to blame them for the failure.
“I’m heartbroken,” Biss, who was deeply involved in negotiations, said Friday, summing up a general feeling among legislators. “It’s a silly word to use about a pension bill, but I feel immensely let down. I really want to solve this problem.”
Exactly why the pension negotiations failed remains unclear. Madigan has acquired a reputation as a master strategist who’s always many moves ahead of everyone else, so the Chicago Democrat’s intentions were a big subject of speculation.
Did Madigan always intend for pension negotiations to collapse, perhaps as a way to please deep-pocketed unions who have long supported Democrats? Did he intentionally blow things up after realizing his own proposal couldn’t pass? Did he maneuver Republicans into presenting their plan and failing, hoping that it would embarrass Republicans and make his own proposal more palatable?
House Minority Leader Tom Cross, R-Oswego, said he wasn’t sure.
“We all spend a lot of time, probably wasted energy, trying to figure out what the speaker does sometimes,” Cross said.
But Cross’ political organization claimed to know Madigan’s goal, sending out a fundraising appeal Friday that said Madigan abused his power and “got his wish of halting real reform.”
A key pension negotiator, Rep. Elaine Nekritz, firmly rejected the idea that he wanted negotiations to fail all along. She said he took part in too many long meetings on the intricacies of government pensions for her to believe it was all some kind of maneuver.
“I don’t think he was doing this to play games. He was working toward a solution,” said Nekritz, D-Northbrook.
Madigan cast the issue as one of fairness and noted the efforts to reach a compromise.
“We’re all very disappointed that we did not resolve the pension question before the Legislature,” he said in his remarks on the House floor as the session ended.
The problem that needs solving is a roughly $85 billion shortfall for government retirement funds, a vast gap between the money they have now and the money they’ll have to pay out in the decades ahead. The state’s current plan for filling that gap requires enormous increases in the state’s annual pension contributions. It jumps by $1 billion in the coming year.
Finding a way to close that gap without bankrupting the state was a top priority for Illinois leaders this year.
Madigan and House Republicans settled on the idea of pressuring people to accept smaller annual cost-of-living increases to their pensions after retirement.
The cooperative approach ended Wednesday when Madigan suddenly introduced a version of the pension plan that also would make downstate and suburban Chicago schools responsible for their employees’ future retirement costs, putting them on even footing with Chicago schools.
The idea wasn’t new. But Madigan suddenly adding it to a bill and pressing for a quick vote incensed Republicans. Feeling betrayed, they began withholding support for what had been a bipartisan budget and attacking Madigan.
Eventually, Madigan announced he was withdrawing his version of the pension plan and turning the legislation over to Cross.
Cross kept the idea of cutting retirees’ cost-of-living increase, but he rejected shifting pension costs to schools. Instead, he proposed making schools responsible for retirement costs created when districts grant generous raises late in an employee’s career.
Unions opposed that proposal, just as they had Madigan’s. Teachers and school administrators alike said the Cross plan would create more uncertainty for districts than Madigan’s gradual pension shift.
Still, it looked like things might be wrapped up quickly.
Most Republicans would vote for the Cross plan, the thinking went, and a healthy number of Democrats would go along with it as the only available option. Approval by the pension committee Thursday morning, which included Madigan’s top lieutenant, reinforced that idea.
That changed when Madigan announced he would vote “no.” Many rank-and-file Democrats decided to follow his example. Republicans, consulting with Quinn’s office, found that they couldn’t get close to the 60 votes they needed.
Rep. Jim Watson of Jacksonville, a member of Cross’ leadership team, acknowledged he doesn’t know of Madigan ever saying he would work to pass Cross’ bill. The assumption, he said, was that previous joint efforts would carry over to the latest version.
Of course, those previous efforts were before Republicans publicly rebuked Madigan, calling him a tyrant and accusing Democrats of cutting funds for diabetes research to punish GOP lawmakers whose children suffer from the disease.
Madigan always made clear that he continued to support the pension shift. He said he was shelving his proposal only because the governor asked him to. When it came time to vote on the Republican version, spokesman Steve Brown said, Madigan didn’t pressure legislators to oppose Cross.
Nekritz said she never received any pressure from Madigan. But Democrats who weren’t deeply familiar with the pension bills would tend to follow his lead, she said.
“It does send a signal. On things we’re not familiar with, we all look to leadership,” Nekritz said.