SPRINGFIELD — The Illinois Senate approved a union-backed pension overhaul Thursday, setting up a possible stalemate with the House over the No. 1 financial issue facing the state.
The Senate plan, passing with a 40-16 vote, is significantly different from a House pension fix on issues ranging from the savings it provides to the benefits it takes away from retirees.
And, with three weeks left in the spring legislative session, it remains unclear whether either version will emerge as the leading candidate to help fix a pension system that is underfunded by more than $96 billion.
State Sen. Chapin Rose, who supported the Senate version, doesn’t see the standoff between House Speaker Michael Madigan and Senate President John Cullerton as a negative development. Rather, the Mahomet Republican said Thursday’s passage of the union-supported legislation allows the discussions about pension reform to continue.
“I’m pretty sure this is not the final bill,” Rose said.
Madigan said there was no conflict between him and Cullerton.
“You can take that battle about personalities and throw it in a trash can, OK?” he told reporters. “This is all about correcting the serious fiscal problem for the state of Illinois. I think the bill passed by the House is a good, solid bill, well thought out. It has a broad base of support, and it ought to be passed by the Senate, and I think they will pass it.”
Gov. Pat Quinn favors the Madigan plan, saying it fulfills the state’s needs.
“I think it’s important for them, members of the Senate, (to) take a look at everything,” Quinn told reporters Thursday. “But ultimately it’s important for (Madigan’s proposal) to get a vote.”
But labor unions representing thousands of state employees want Cullerton’s plan to move forward and have threatened to sue the state if something else is approved.
The centerpiece of Senate Bill 2404 is a provision that forces current workers and retirees to make a choice in their retirement benefits. Under one of the choices, for example, retirees who want to continue receiving state-financed health insurance would have to forgo two years of cost-of-living adjustments.
“This bill is fair and respects the plain language of the pension clause. For that reason, I believe that it has the best chance of withstanding a court challenge,” Cullerton said in a prepared statement.
The legislation would save Illinois about $45 billion during the next 30 years.
Legislation approved in the House last week would save an estimated $140 billion over 30 years by requiring public employees to pay more toward their retirement benefits and reducing cost-of-living increases. The retirement age for workers under age 45 would rise to 67.
Among those voting no were Republican state Sens. Dale Righter of Mattoon, Bill Brady of Bloomington, Jason Barickman of Bloomington and Dave Luechtefeld of Okawville. Most opponents said the measure didn’t go far enough to correct decades of underfunding.
“This is not a bold step,” Righter said.
“The bill doesn’t reach substantial enough savings to correct the problems we have,” Brady added.
But supporters said the Senate legislation was a positive step.
“Let’s put the best face on this and move forward,” said state Sen. Mike Jacobs, D-East Moline.
“I think the unions have put pretty significant savings on the table,” Rose said.
“I made a promise to the thousands of union members in my district that I would not support a pension bill that did not involve negotiations with the unions,” said state Sen. Gary Forby, D-
Benton. “Having union leaders at the table was key in passing this bill.”
Others voting “yes” included state Sen. Andy Manar, D-Bunker Hill
In addition to the Senate action, Madigan held a hearing Thursday with school officials on a separate plan that would shift the cost of pensions for downstate teachers from the state to local districts.
“We are struggling, struggling to right the ship,” Madigan said. “This is a government that’s in a lot of trouble.”
While universities and community colleges have agreed to consider such a plan if it is phased in over time, school districts continue to balk at the idea.
“How are we going to absorb that?” asked Ben Schwarm, deputy executive director of the Illinois Association of School Boards.
Schwarm said if the state cuts off money for teacher pensions, districts could be forced to cut classroom services, lay off teachers and, possibly, raise property taxes.
Madigan said there has been a full year for this issue to percolate.
“This is going to happen,” Madigan said.