When Illinois House Speaker Michael Madigan opened debate over his bill intended to solve the state’s $100 billion shortfall in funding four of its five public pension plans, he said:
There will be changes here, much-needed changes, but this bill is a well-thought-out bill, a well-balanced bill that deserves the support of this body, the state Senate, and the approval of Governor Quinn.
Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions.
Madigan instead birthed a mouse on Tuesday that passed the House, 62 to 53, and the Senate, 30 to 24. The cuts in Madigan's bill were minuscule, but they were sufficient to offend Democrats who did not want to make any cuts whatsoever. On the other hand, Republicans did not like the bill because the cuts didn't go deep enough.
The bill, which Quinn is expected to sign shortly, contains modest reductions in the cost-of-living-adjustments — COLAs — that apply to retirees drawing benefits from the plans, but also extends slightly the time required for employees to start receiving those benefits. As a sop to the unions, the bill also includes a provision allowing the pension plans to sue the state if at any time in the future the legislature fails to fully fund those four pensions.
Amazingly, in light of the fact that all three credit rating agencies have now given Illinois the lowest rating of any state in the country partly because of these pension plan shortfalls, Madigan’s bill reduces current contributions from the state’s employees to the plans.
Madigan’s bill is a compromise from his previous offering that would have made deeper cuts in benefits; it looks more like Senate President John Cullerton’s offering, which was even less realistic. Even so, union-backed political action committee We Are One promised a legal challenge to the bill on the basis that it would rob future retirees of their benefits. According to a study offered by that group, a person with a $50,000 annual pension who has worked for 30 years to get it will have lost 80 percent of its purchasing power 20 years into his retirement. A statement from We Are One claimed:
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