By Jamey Dunn
Gov. Pat Quinn today signed sweeping public pension changes passed by lawmakers earlier this week.
Hard-fought bipartisan compromises of this nature are usually signed with fanfare and speeches from lawmakers who helped make it happen. That was not the case today with Senate Bill 1. Quinn signed the legislation during a private ceremony in Chicago this afternoon.
SB 1 will reduce annual cost-of-living adjustments for retirees and base them on a formula that is tied to inflation. It will also require workers younger than 46 to work longer for full benefits. Some annual COLAs would be deferred for current employees upon retirement. The number of years an employee must skip the COLA is contingent on years of service. The plan caps pensionable salary at $109,971, but that number would increase annually based on inflation. The provision would not apply to employees who already earn more than the cap.
Workers will contribute one percentage point less of their salaries toward retirement benefits. The law also allows pension systems to sue if lawmakers opt to skip out on the annual payment. (For a more detailed rundown on what the law does, see this post.) The proposal is projected to save $160 billion and fully fund the systems by 2043.
Quinn, who once said he was put on Earth to address the woefully underfunded pensions systems, issued a short statement thanking the legislative leaders, all the members of the pension conference committee and other legislative supporters of the bill. “Illinois is moving forward,” Quinn said in a written statement. “This is a serious solution to address the most dire fiscal challenge of our time.”
While there were no public speeches, some legislative leaders took their victory laps in their statements, which were included in the governor’s news release. “The bill would not have passed without me. I was convinced that standing fast for substantial savings, clear intent and an end to unaffordable annual raises would result in a sound plan that will meet all constitutional challenges," House Speaker Michael Madigan said.
“With today’s bill signing we have staved off a greater crisis,” Minority Leader Jim Durkin said. “I am proud many of the significant components are Republican ideas generated by the conference committee, and my predecessor through Senate Bill 1.” Former House Minority Leader Tom Cross had been a key player in pension negotiations over the years. However, he voted against SB 1. Cross left his leadership role in the legislature to run for state treasurer.
Senate Minority Leader Christine Radogno applauded the bipartisan efforts that produced the final compromise. “This is a major step forward in putting Illinois on the path to financial recovery,” Radogno said. “It is the result of bipartisan, bicameral negotiations, after a great deal of debate and discussions. It will demonstrate to the credit rating agencies and job creators that we are serious about turning Illinois around.
Senate President John Cullerton gave some credit to Quinn. “I applaud the governor for prioritizing this issue,” he said. “I look forward to working with him and all legislative leaders to ensure that we continue on this path of fiscal leadership and bipartisan cooperation.”
The measure will go into effect in June of 2014, but the next stop for the law will likely be the state’s court system. Pension benefits are protected by Illinois’ Constitution, and union leaders say the law violates that protection.
“Gov. Pat Quinn has given hundreds of thousands of working and retired teachers, nurses, police, caregivers, first responders and others no alternative but to seek justice for retirement security through the judicial system. Contrary to his belief, every Illinois citizen loses today,” said a statement from the We Are One union coalition. “Senate Bill 1 is attempted pension theft, and it’s illegal. Once overturned, its purported savings will evaporate, and the state’s finances and pension systems will be left in worse shape. Our coalition has been consistently in contact with our attorneys, and today we directed them to prepare to file suit. We will challenge SB 1 as violating the Constitution and ask for a stay of the legislation's implementation pending a ruling on its constitutionality.”