Options for a pension reform Plan B may be limited

By Jamey Dunn

The Illinois Supreme court issued a ruling Thursday on state employee health care that bodes ill for supporters of the recently passed cuts to public employee retirement benefits.

The court ruled that health care benefits for retirees fall under the pension protection clause—the very sentence of the state’s Constitution that many supporters of pension reform had hoped the justices would be willing to overlook. The pension clause states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The ruling indicates that the justices are inclined to side with public employees and retirees. In the 6-1 opinion, Justice Charles Freeman wrote: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.” Justice Anne Burke wrote the dissenting opinion. In it, she did not question the protection of the pension clause, but she argued that retiree health care benefits did not fall under that protection.

Some lawmakers seem to see the ruling as writing on the wall for the pension reform law, which is still working its way through the legal system. “Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says,” Senate President John Cullerton said in a prepared statement. “The court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.” Cullerton added: “If the court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”

Kent Redfield, an emeritus professor at the University of Illinois Springfield, said that while the ruling pertains to a different case, the language used is clear. “You could find some way to parse some of it, but it’s really, really difficult. There’s no logical way to get to upholding Senate Bill 1 (the pension reform legislation) based on the clear content of this ruling and the way they’ve construed the pensions clause.”

Others disagree that the ruling is a harbinger of the pension law’s death. Rep. Elaine Nekritz, who was key player in getting SB 1 passed, said that the justifications the law makes for reducing benefits were not part of the retiree health care case. She said that the court has yet to consider those points. The law lays out the dire fiscal situation that the state is in and claims that state elected officials need special powers to curtail the estimated $100 billion unfunded liability and save the state from a budget disaster. However, one line in today’s decision seems to blow a hole in that argument. “In light of the constitutional debates, we have concluded that the [pension] provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.” 

Supporters also claim that a reduction in the amount that employee would pay into the system represents a consideration they are being given for a change to the contract that is their membership in a pensions system. Nekritz said that the ruling is clear that benefits are protected, but she says it is unclear if that protection is absolute. “Does it really mean that we can do nothing, or are there some things that we can do based on the legal arguments that we make under Senate Bill 1?”

Those arguments aside, if the Illinois Supreme Court rejects the new pension law, what options do legislators have?

Cullerton had proposed offering employees a choice between receiving subsidized health care coverage or keeping their current pensions benefits. If they had chosen health care, they would have seen a reduction in their retirement income including a cut to the expensive compounded interest cost of living adjustments (COLAs) retirees currently receive. Cullerton said that this scheme could potentially fulfill a legal standard of giving employees consideration for a reduction in benefits. The Senate approved the plan, but it was never called for a vote in the House.

However, that plan was based on the idea that health benefits were not protected by the Constitution—a concept that runs counter to today’s ruling. “The concept of consideration is still viable. The court has not rejected it or defined what the limits are. It’s just hard to see what you can give up in exchange,” Redfield said. “It’s hard to see what other major carrot you can offer to people in terms of giving up their COLA.”

Skokie Democratic Rep. Lou Lang introduced legislation that would extend the current income tax rates, which are due to start rolling back on January 1, to pay down the unfunded liability.

But Lang’s plan also calls for larger contributions from employees and an increase in the retirement age. Both of these provisions could be seen as a reduction in benefits by the court. Much of the revenue from the temporary income tax increase has gone toward making the required annual pension payment after lawmakers voted to skip payments and short payments for several years in the past.

There have also been proposals to change the pension payment schedule to even out the cost of the annual payment. The state is currently on a system that resulted in large balloon payments, much like a subprime mortgage. Some such plans also call for funding the system at 80 percent as opposed to 95 percent or 100 percent. Redfield said that a proposal that changes the payment structures would need to be combined with changes to the state’s revenue structure, such as expanding the sales tax base to some services, budget cuts or both. “As a stand alone, then it looks like an excuse to keep doing what we’re doing,” he said.

Republican candidate for governor Bruce Rauner has advocated for moving employees’ future benefits to a system that looks more like a 401-K. That plan would go even further than SB1, so it is unlikely that it would be upheld if SB 1 were rejected. But it is possible that the court’s ruling might strengthen his case for offering a defined contribution plan to newly-hired employees. “It may embolden Rauner to say well we’ve got to get everybody going forward into a defined contribution [plan],” Redfield said. However, such a proposal would have no impact on the unfunded liability for current employee and retiree benefits. It also means the state would likely have to start contributing to Social Security benefits for positions that do not currently offer them.

Meanwhile Gov. Pat Quinn is emphatically sticking by his opinion that SB 1 is constitutional. “We believe the pension reform law is constitutional. This landmark law was urgently needed to resolve the state’s $100 billion pension crisis. It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security,” said a written statement from his office. “We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt.”

Redfield said that there will likely be many suggestions for a Plan B on pension reform in the coming months. “I think people will be floating lots of ideas that probably aren’t feasible and really won’t address the short-term problems—between now and November,” he said. “There’s nothing politically to be gained by standing up and saying ‘you know, we really, really screwed up, and we have no options but to raise your taxes.’”

 But he said that new revenues and cuts to state services to cover the cost of the pension systems might be the only real option available to address the problem if the court rejects SB 1. If that happens, the state will almost certainly face another credit downgrade if it fails to act to address the liability. The current budget is based on $650 million in borrowing that has to be paid back. In Fiscal Year 2016, the tax rate will be lower for the entire fiscal year instead of just half of it. FY16 could turn out to be one doozy of a budget for lawmakers and whomever is the governor to sort out. “You want to be around for a historic session for the General Assembly? I think everybody has a front row seat,” Redfield says.

Statehouse roundup

By Jamey Dunn

There was plenty going on at the Statehouse today, and it’s only the first week of April. A House committee approved a bill to reform Chicago’s pension system for city workers; a group of Democratic senators filed legislation that would make sweeping changes to the way the state funds schools; and the Senate voted in favor of allowing children with epilepsy to use medical marijuana. Here’s a rundown of what happened:

Chicago pension changes 
Two days after Chicago Mayor Rahm Emanuel presented his proposal to stabilize the city’s pension systems for workers, a House committee approved the plan. It would ask workers to contribute more to the system and would reduce their cost of living increases. The city would increase local property taxes to bring in an additional $250 million in property taxes. The legislation is intended to cut the city’s unfunded pension liability of $19.5 billion in half over 40 years. The General Assembly must approve the plan because the city’s systems are governed by state law.

While Emanuel says he has union support for his plan, not all labor organizations are on board. John Cameron, political director for AFSCME Council 31, called the plan “clearly and indisputably unconstitutional.” Senate Bill 1992 seemed to be set up to move quickly thought the legislature today. House Speaker Michael Madigan popped his amendments onto the bill shortly before the hearing, and the Senate held its own hearing shortly after the House panel voted. But the House adjourned before taking a vote. Republican leaders said that they could not support the proposal because they had not had time to digest its contents, and they said that they would rather see a plan that included the city’s retirement systems for police, firefighters and teachers, too. “We careen from one crisis to the next,” said Senate Minority Leader Christine Radogno. “Absent a long term plan, I couldn’t advise our caucus to be in favor of this.” But supporters said that the city is talks with with those groups, too. “You can say we’ve piecemealed, but they’re different entities,” said Chicago Democratic Sen. Kwame Raoul. “This is about solving a very serious problem that impacts the city of Chicago. ... This is a product of negotiations. It’s been indicated that other negotiations are ongoing and things don’t just come to a point of resolution magically at the same time.”

Medical marijuana for epilepsy
The Senate approved SB 2636, which would allow children with epilepsy access to marijuana as a treatment under the state’s medical cannabis pilot program. Some families have found that a liquid form of the drug helps control the disease in children with frequent seizures. Parents say marijuana oil has helped their children, who may have hundreds or thousands of seizures a day,  to cut the number down to just a few. Last month, an Arizona judge ruled that two parents in the state could continue treating their son with the drug. Parents of epileptic children are pushing for legislation similar to SB 2636 in other states.

Campus smoking ban
The House approved SB 2202, which would ban smoking on public college campuses. The measure would apply to all university property and would let universities decide what the penalty would be for those who violate the ban. Opponents to the proposal argued that smoking policy decisions should be left to university trustees.

Education funding 
After a committee spent more than a year scrutinizing the way the state distributes funds to schools, Democratic lawmakers unveiled a proposal to revamp the education funding formula today. Bunker Hill Democratic Sen. Andy Manar, who chaired the committee, said that currently only about 44 percent of the state education spending is doled out based on local need. He said SB 16 would change that so financial need would come into play when distributing about 90 percent of funds. The proposal would also eliminate the individual block grant that is given to Chicago schools, something Republicans on the committee have supported. The plan would also require more spending transparency at the district level. Maywood Democratic Sen. Kimberly Lightford said that the debate around school funding has to move away from focusing on which districts would be funding “winners” and which would lose out on funds. “We all win. We all win. All the school districts win when dollars are going to the areas that need it the most,” she said.

Manar agreed. “The idea that we can have a few premier school districts in the state that exceed every expectation ... and have an incredible number that lag behind and call that a win in the state system is not a win in my book.” Both said that they were introducing the bill now as a jumping point for debate. “We could have waited until the last week of may negotiated behind closed doors, popped a bill out and then had a vote. That’s not the way to do this,” Manar said. “I’m hopeful that we will have a bipartisan set of cosponsors on this bill.”

Republicans in the Senate said that they had not been invited to today’s press conference and that they had not seen the 400-page bill until it was filed last night. “We welcome the discussion of fair education funding. We believe Illinois school children deserve every opportunity for a quality education — in every school in Illinois,” said a statement from Senate Republicans. “Our 2013 look at school funding found Illinois’ current funding formulas to be outdated, skewed to benefit Chicago and not performing as designed by law. We are reviewing the legislation just filed. At first blush — we have dozens of questions and comments to contribute to the discussion as it is reviewed in the Senate and perhaps the House of Representatives. We want educators, superintendents, schools boards and other education professionals to have that opportunity as well.”

Constitutional amendment for victims’ rights
Skokie Democratic Rep. Lou Lang has been pushing for years to get rights for crime victims enshrined into the state’s Constitution. The House today approved his constitutional amendment to do just that. The amendment is part of a crowded field of efforts to get changes to the document before voters. House Speaker Michael Madigan is sponsoring two amendments. One would prevent discrimination against voters in the state and another would charge a 3 percent income tax surcharge on income over $1 million. The revenue from the additional tax would be used to fund education. Both of Madigan’s amendments have been approved by House committees. There are also two separate pushes to put amendments on the ballot through a citizens initiative. One, which is spearheaded by Republican gubernatorial candidate Bruce Rauner, would impose term limits on legislators. The other, which is backed by a well-funded committee, would change the way the state draws its legislative maps by taking the task out of the hands of lawmakers.

Union coalition challenges pension law

By Jamey Dunn

A coalition of public employee and teachers' unions has filed a lawsuit challenging the new law that makes changes to the state’s pension systems.

The We Are One Coalition today filed a class action lawsuit in the Circuit Court for the Seventh Judicial Circuit, which is in Sangamon County. The suit has 25 named plaintiffs, who have worked in the public sector in a variety of jobs, from all over the state. “Our suit makes clear that pension theft is not only unfair, it’s clearly unconstitutional,” Illinois AFL-CIO President Michael Carrigan said in a prepared statement. “Teachers, nurses, emergency responders and other workers and retirees will not stand by while politicians try to take away their life savings illegally. The legislature and governor shirked their responsibility to uphold the Constitution, so we are seeking justice in court to right their wrongs. Promises must be kept, and the rule of law must prevail over politics.”

 The suit claims that the new law violates the pension clause in the state’s Constitution. That clause says, “Membership in any pension or retirement system of the state, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

Union officials have been vowing to sue since Senate Bill 1 was approved my lawmakers and signed by Gov. Pat Quinn in December. The measure is projected to save $160 billion over 30 years and fully fund the pension systems, which are currently underfunded by an estimated $100 billion, by 2043. The plan will cut annual cost of living adjustments (COLAs) for current and future retirees. The law also increases the retirement age for employees under 46. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits. The proposal will also cap pensionable salary at $109,971, but that number would increase annually based on inflation.

The law will reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. Some who support the measure argue that the reduction in employee contribution and the guaranteed payment from the state make the legislation constitutional because employees are getting a form of consideration for the reduction in their benefits. Supporters of the plan have also made the case that the state should be granted special powers to contain pension costs because Illinois is enduring a fiscal crisis. “These lawsuits come as no surprise. We believe it’s constitutional, and we’ll defend the interests of taxpayers,” Quinn spokeswoman Brooke Anderson said in a written statement. “This landmark law was urgently needed to resolve the state’s $100 billion pension crisis, which was created over 70 years of financial mismanagement. We expect it to be upheld as constitutional. This law squarely addresses the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt, a standard set by Gov. Quinn two years ago. It had to be done to ensure retirement security for those who have faithfully contributed to the pension systems and support economic growth.”

The employees and retirees who filed suit today do not agree. Their complaint says the state failed to meet its obligation to fund the system and that the new law violates the pension protection written into the state’s Constitution. “The state chose to forgo funding its pension systems in amounts the state now claims were needed to fully meet the state’s annuity obligations. Now, the state expects the members of those systems to carry on their backs the burden of curing the state’s longstanding misconduct. Specifically, [the law] unlawfully strips from public servants pension amounts to which they otherwise are entitled as a matter of law, let alone fundamental fairness,” the complaint said. “That is the very threat against which the pension clause [in the Illinois Constitution] protects.”

The group says it reserves the right to seek an injunction to prevent the law from going into effect while the unions and the state fight it out in court.

Little change for state's bond ratings so far

By Jamey Dunn

The major bond rating agencies are having mixed reactions to changes to Illinois' public employee pension systems that were approved and signed into law last week.

Standard & Poor’s rating services upgraded its outlook on the state’s borrowing from “negative” to “developing.” However, the state retains its A- rating from the agency. According to S&P, the new outlook means that the agency could raise or lower the state’s rating in the next two years. “The change reflects the consensus reached on pension reform, which we believe could contribute to a sustainable path to fiscal stability,” S&P credit analyst Robin Prunty said in a prepared statement. “Although we view the consensus achieved by Illinois on this difficult issue as positive from a credit standpoint, the developing outlook reflects the implementation risk — legal and budgetary — associated with various provisions of the pension reform, as well as the overall structural budget challenges facing the state.” The new outlook comes as Illinois is planning to sell $350 million in general obligation bonds later this week.

Gov. Pat Quinn highlighted the change as a positive byproduct of the pension cuts that lawmakers approved and he signed into law. “I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction,” Gov. Quinn said in a prepared statement. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools. This improved outlook will be the first of many positive developments towards a revitalized and stronger Illinois.”

But a change in outlook does not constitute much positive forward motion for the state, especially given how much of a beating Illinois’ credit has taken in recent years. The two other major rating agencies, Moody’s and Fitch Ratings, both issued positive statements about the new law. But neither has opted to adjust the state’s rating or outlook. Both said they would analyze the law to determine the extent of its fiscal impact. Supporters say it will save $160 billion and fully fund the pension systems by 2043.

Public employee unions are expected to bring a lawsuit against the state because they say the pension cuts violate the state’s Constitution, which contains an explicit protection for retirement benefits. “[Senate Bill 1] won’t save a penny. The bill is unconstitutional, so it’s savings are an illusion. It’s only going to cost the state time and money and kick the can down the road all over again,” said a statement from the We Are One Union coalition. Moody’s said in a brief analysis issued after the bill passed last week, that it would be able to factor the changes in the new law into the state’s credit rating if and when they are upheld by the courts.

All three rating agencies acknowledge that the state is facing other budget issues besides pension reform, including the loss of billions of dollars of revenue when the temporary income tax increase sunsets. The tax rate begins stepping down in 2015. Fitch’s said that the state must address some of its budget challenges to hang on to its current rating, which is the lowest in the country. “In addition to action on pensions, maintenance of the rating will require timely action on a more permanent budget solution to the structural mismatch between spending and revenues in advance of the expiration of temporary tax increases.”

Quinn quietly signs pension legislation

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.”

Legislators approve changes to state's public pension systems

By Jamey Dunn

After years of debate and several failed attempts, the Illinois General Assembly passed changes today to the state’s pension systems for public employees.

After holding simultaneous floor debates, the Illinois House and Senate voted within minutes of each other to approve a new version of Senate Bill 1. The plan is the product of a special conference committee on pensions and negotiations among legislative leaders. Gov. Pat Quinn said he plans to sign the bill, which he called a “bipartisan victory for the people of Illinois.” Quinn, who voluntarily stopped taking pay until the bill was passed, said that after he signs it, he will look into picking up his back checks. “Today, this day, will always go down in history as the day that the people of Illinois through their elected representatives and senators took action for the future. The people have won. We have all won.”

The proposal is projected to save $160 billion over 30 years and fully fund the pension systems, which are currently underfunded by an estimated $100 billion, by 2043. It would reduce annual cost of living adjustments (COLAs) for current and future retirees. The bill would apply differently to employees and retirees, depending on how long they worked and which retirement system they belong to. The current COLAs are 3 percent compounding interest. Under the new SB1, the COLA would be determined by 3 percent of pension benefits or 3 percent of the product of years served multiplied by $800 for state employees or $1,000 for teachers and university employees. The COLA would be based on whichever number result is smaller. The numbers used in the formula, $800 and $1,000, would increase along with the Consumer Price Index. Some annual COLAs would be deferred for current employees upon retirement. The number of years an employee must skip the COLA is contingent of years of service.

Employees younger than 46 also would have to retire later. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits. The proposal would also cap pensionable salary at $109,971, but that number would increase annually based on inflation.

The bill would reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. The state would contribute 10 percent of the savings from the plan toward the unfunded liability starting in 2015. The state would also contribute an additional $1 billion after borrowing that was used to make pension payments in the past is paid off.

House Speaker Michael Madigan made his goals for pension changes clear during floor debate today. “We’re here today discussing the issue because of the cost, and what we want to do is get cost savings as a result of this bill.” Madigan said he did not call a union-backed proposal, Senate Bill 2404, for a floor vote in the House because it would not have produced enough savings. He said that the House had set the “high bar of achievement” when it passed an earlier version of SB 1 last spring. That proposal would have saved an estimated $163 billion. The plan failed to gain the needed votes to pass in the Senate. Madigan said that he was “severely criticized” for not allowing the SB 2404 to to be called in the House after it passed in the Senate. But he said today that he did not call it because he wanted to “shape the issue” and give people time to understand the difference in cost savings between the bills. He also wanted lawmakers “to understand that our goal is to achieve the most cost savings feasible as a result of the legislation.”

Madigan said that pensions had become “too rich” to be sustained, and that he and Republican leaders hoped to keep the savings from any new proposal near to those that would have been achieved by the previous SB 1. Madigan also said today that he believes COLAs, the biggest cost driver among the pension benefits, are not protected by the state’s Constitution. The speaker said that a smaller portion of the savings in the new version of SB 1 would be derived from benefit cuts. Under the old bill, almost two thirds of the savings were reductions, but under the new plan, the unfunded liability reduction would be split about half and half between cuts and additional funding.

Opponents argued that the issue is about more than the bottom line. “If this were only about picking the bill that saves the most money, we’d all pick the bill that saves the most money,” said Sen. Toi Hutchinson, an Olympia Fields Democrat. “It’s about taking people’s retirement benefits right when they need them the most, after they’ve worked hard and earned those benefits.”

Aurora Democratic Sen. Linda Holmes, the only member of the conference committee who did not support the bill, said that the plan was akin to theft. “I don’t know how there’s one person here with any understanding of business, with any understanding of contracts, who can sit there and say what we’re doing is right. This is wrong.” Homes and Hutchinson both said that the bill violates the state’s constitutional protection of pension benefits. That provision says: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

Hutchinson said of the constitutionality of SB 1: “I’m not a constitutional lawyer. I’m really not. But I can read, and it’s in the Constitution.”

Supporters of the bill say that the reduction in employee contributions and the funding guarantee offer a consideration in exchange for the benefits that would be reduced. The idea behind their argument is that under contract law, a benefit could be reduced if something else of value is offered as a consideration for the reduction. However many argue — including Senate President John Cullerton at one time — that employees would have to agree to the swap for it to pass muster. Cullerton’s SB 2404 would have offered employees choices between COLA reductions or state-subsidized health care in retirement.

Not all who voted in favor of the law today say they are certain that the bill is constitutional. However, they say that the crisis is too big to ignore. “The legislative process involves compromise. When it comes to pension reform, a compromise was found at the intersection of policy and political feasibility. The General Assembly stumbled at this intersection for years. Now, it’s time to move forward and allow the courts to rule on the constitutionality of our approach,” Cullerton said in a prepared statement. 

Chicago Democratic Sen. Kwame Raoul, who was chair of the conference committee, said that if the Illinois Supreme Court did strike down the bill, the justices would likely give some indication in their opinion of what steps they think lawmakers could take on pension changes. “We have the worst unfunded liability in the United States of America, and we can’t continue to be cemented into a stalemate,” he said. “We cannot continue to be the embarrassment of the nation. We must act to steer our ship in the right direction.”

Madigan said he thinks the courts will uphold the bill. “Something’s got to be done. Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions,” he said. The changes will apply to four of the five state pension systems: teachers, university employees, legislators and state government employees. Judges' pensions will not be affected under SB 1. 

Union officials say SB 1 goes too far and is unconstitutional. They maintain that SB 2404 was the best choice. “There’s no victory in a bill that will get tied up in court, no victory in harming the lives of teachers and firefighters and nurses to a far greater degree than is just and necessary,” said Dan Montgomery, president of the Illinois Federation of Teachers. “We feel it's blatantly unconstitutional, and so claiming it saves $160 billion is a disturbing illusion. It will save no money at all.” There is some debate about whether opponents will have to wait until the law goes into effect in June before they can file suit. But at least one union leader indicated today that a suit could come sooner than June. “We would have to wait until the governor signs it, and then we can file a suit at any time. And then we’ll do it when we’re ready and when it’s most appropriate,” Montgomery said.

Other opponents said that the state should completely scrap its defined benefits system and move employees to a 401(k)-type plan for future benefits. Advocates for such plans argue that only employee benefits earned to date are protected by the Constitution. Rep. Thomas Morrison, a Palatine Republican, said that because the state has the worst-funded pension system in the nation, lawmakers have go to “go big” on reforms to solve the problem.

Senate Minority Leader Christine Radogno said she is aware of the human toll that cutting pensions would take. “We're very cognizant of the fact that this is not just a numbers issue, but it’s a people issue as well.” During negotiations, she pushed for a provision that would allow low-income retirees to keep their current COLAs until their pensions reached $30,000. But she said that that the changes must be made to address the state’s fiscal problems. She said that if the pension issue is addressed, other concerns such as the state’s overdue bills, will be easier to tackle. She also said that making the systems solvent should provide employees and retirees some piece of mind, even if they are upset that their pensions will be reduced. “They will be able to count on the benefits once we pass this bill,” she said on the Senate floor.

Several opponents on the Republican side argued only that lawmakers should slow down the process. They said there was not enough time for them to fully understand the more-than-300-page bill or for the public to grasp what was at stake. Republican gubernatorial candidate Sen. Kirk Dillard of Hinsdale was among them.

The proposal has the support of all four legislative leaders and Gov. Pat Quinn. Nonetheless. speculation that it might not pass was still floating around earlier today. (Those assessments may have been caution from supporters and wishful thinking from opponents.) Two other Republican candidates for governor, Illinois Treasurer Dan Rutherford and venture capitalist Bruce Rauner, both opposed the measure in the lead-up to the vote. Republican U.S. Sen. Mark Kirk also panned the bill, dismissing it as gimmicks that would not solve the problem.

Republican legislative leaders acknowledged that the political hubbub made their attempts to get votes for SB 1 more difficult. Radogno said she was glad that 10 members of her 18-member caucus voted in favor of the bill. “That’s more than half. I’m very pleased with it. It was a contentious vote,” Radogno said. “The caucus was a microcosm of the opposition that we heard outside. You had the folks that were very much from the union districts and were not going to be for the pension reform no matter what. And then you had people that were very ideological, saying that this isn’t good enough; we ought to just not do anything and let chaos reign and then we can come in and do something better.” New House Minority Leader Jim Durkin said that his vote count changed throughout the day. He said that the influence from people such as Rauner, as well as lobbying from union members, probably played a role. But he said that getting the vote done now was likely key to its passage. “I quite frankly believed that if we did not pass a bill today, that we would not see one next year because then it would get caught up in the governor’s election and all the drama that goes into it every four years.”

Madigan, who is known for delivering votes at crunch time, said it wasn’t easy. “Well, this was difficult because of the strength of the opposition and the intensity of the calls and contacts generated by organized labor among the Democrats. On the Republican side, their problem apparently was some of the gubernatorial candidates thinking about the campaign rather than the seriousness of the issue.” 

Northbrook Democratic Rep. Elaine Nekritz, who has been working on the pension issue for more than two years, said that today’s vote might be the first in a series of bills to address underfunded pension systems. “I think that this will free up a lot of energy and capacity in the General Assembly to start focusing on the needs of the city [of Chicago] and they are significant and in may ways more immediate than the state’s need in terms of addressing the shortfalls in their pensions systems.”

Chicago Mayor Rahm Emanuel came to Springfield in 2012 and appealed to lawmakers for changes to the city’s pension systems. Many other municipalities are also struggling with underfunded pension systems. “There are police and fire pension systems around this state that are funded in the 10 [percent] to 20[percent] to 25 percent range that are very much at risk of being insolvent. Our work on pensions is by no means done. But this [vote] will let a lot of air back in the room to start addressing the other systems,” Nekritz said. Cullerton agreed. “Pension reform isn’t done. I am committed to building on our momentum and providing relief for our local communities facing similar problems. Specifically, it is critical that we turn our focus to the financial crisis facing the Chicago Public Schools’ pension system. I look forward to working with all leaders on this critical issue.”

Pension lobbying efforts go down to the wire

By Jamey Dunn

Supporters and opponents of proposed changes to the state’s public pension systems are expecting close votes on legislation today.

A special conference committee, aided by some final negotiations among legislative leaders, produced a pension bill that has bipartisan support. However, those counting noses today say that the margin to get the bill passed is tight, especially in the Senate. Senate President John Cullerton did not attend a Senate hearing on the bill this morning. According to conference committee chair Chicago Democratic Sen. Kwame Raoul, Cullerton was working to round up votes for the new version of Senate Bill 1. Raoul said he would be doing the same after the committee adjourned. “It’s very close. It’s very close,” he said. Raoul said that lawmakers should ignore the opposition coming from high profile candidates and politicians such as Republican gubernatorial candidate Bruce Rauner and Republican U.S. Sen. Mark Kirk. “I think there’s a time when the politics of self preservation need to be set aside, and I think this is one of those times,” he said. “So I think some people need to visit the wizard and get some courage and vote the best interest of the state of Illinois.”

The proposal is projected to save $160 billion over 30 years and fully fund the pension system by 2043. It would reduce annual cost of living adjustments (COLAs) for current and future retirees. While previous plans have cut COLAs in a more straightforward way, this bill would apply differently to employees and retirees, depending on how long they worked and which retirement system they belong to. The current COLAs are 3 percent compounding interest. Under the new SB1, the COLA would be determined by 3 percent of salary or 3 percent of the product of years served multiplied by $800 for state employees or $1,000 for teachers and university employees. The COLA would be based on whichever number is smaller. The number for teachers and university employees is larger because workers in both systems generally do not get Social Security benefits. Some annual COLAs would be deferred for current employees upon retirement. The number is contingent of years of service. Employees younger than 46 would also have to retire later. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits.

The proposal would also cap pensionable salary at $109,971, but that number would increase annually based on inflation. The plan would reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. 

Raoul said that this new version of SB 1 is similar to a previous version, which passed in the House but twice failed to gain the votes needed in the Senate. “This is very close to the same level of savings of Senate Bill 1, it’s just put together in a different way.” Raoul did not support that legislation when it came up for a vote in the Senate, but he said his work on the conference committee has made him realize that he cannot get his way on every aspect of the issue. “We were in a stalemate, and we had to compromise. And this is where we are. This is our best chance to get this thing done to get it moving forward,” Raoul said. He added: “This is a tough vote, I will not deny that. ... We will have probably a very spirited discussion in our caucus.”

Union officials say that the new version of the proposal’s resemblance to the old SB 1 is part of the problem. “I am having flashbacks to the House’s SB 1. After months of conference committee meetings, the so called compromise bill that you consider today is nearly identical to where you started — a bill twice rejected by the Senate,” said Dan Montgomery, president of the Illinois Federation of Teachers. “There is only one way to describe that kind of blatant taking of ones life savings. We call it theft.” They called upon lawmakers to instead approve a union-backed plan that passed in the Senate last spring but was never called for a House vote. “We believe very firmly that there are problems that need to be solved and it in all of our interests as a state to solve them,” Montgomery said. Lawyers representing labor say that the bill is unconstitutional because it does not offer workers something of value in exchange for their benefits “There is no consideration. There is no offer and acceptance. There is no indication that anyone affected by this agrees to these changes. Therefore we’re left with the matter of unconstitutional changes [to benefits],” said John Stevens, a lawyer for the We Are One unions' coalition

Supporters of SB 1 say that the bill does offer workers and retirees consideration in the form of a funding guarantee and a reduction by 1 percentage point of employees' contributions to their benefits. Raoul said that no matter what was in the proposal, it would likely face a constitutional challenge. But he said hat the issue has reached the point where lawmakers must take action and see what the courts decide. “I think this bill will be challenged, and I think that there will be strong arguments that can be made on both sides of it, but we’ve got to get to that point. Let’s say that this bill was found unconstitutional. I think it’s very likely that the court would give us guidance as to what we can do. And if it’s found constitutional, then we’ve taken a major step towards securing our state. But we’ve got to get to that point. We can’t continue to just play this ping pong game and say that we can’t vote on anything because of a constitutional debate.”

Montgomery said that if the bill is approved and signed into law, his organization plans to file a lawsuit “a soon as we can.” But in the meantime, those on both sides of the issue are lobbying lawmakers hard. “I think they’re really faced with a choice. ... So they’re really coming to the brink of the abyss here, and some lawmakers have some real tough choices,” Montgomery said. “It’s very close. ... Very close in the Senate. I think there’s trouble finding the requisite votes on both sides of the aisle, but we will see.”

Politics swirl around pension vote

By Jamey Dunn

The political fallout has begun over a deal reached by legislative leaders to make changes to the state’s public employee pension systems.

The proposal, which is yet another version of Senate Bill 1, is projected to save $160 billion over 30 years and fully fund the pension system by 2043.

The legislation would reduce annual cost of living adjustments (COLAs) for current and future retirees. While previous plans have cut COLAs in a more straightforward way, this bill would apply differently to employees and retirees, depending on how long they worked and which retirement system they are a member. The current COLAs are 3 percent compounding interest. Under the new SB1, the COLA would be determined by 3 percent of salary or 3 percent of the product of years served multiplied by $800 for state employees or $1,000 for teachers and university employees. The COLA would be based on whichever number is smaller. The number for teachers and university employees is larger because workers in both systems generally do not get Social Security benefits. Some annual COLAs would be deferred for current employees upon retirement. The number is contingent of years of service.

Employees younger than 46 would also have to retire later. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits. The proposal would also cap pensionable salary at $109,971, but that number would increase annually based on inflation. The plan would reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. Since the details of the plan were released last week, candidates running in the 2014 elections have been weighing in.

Only one Republican gubernatorial candidate, Bloomington Sen. Bill Brady, came out strongly in favor of the proposal. “I will be voting in support of this legislation, which has been crafted through months of discussion, exhaustive analysis and legislative debate. It will not be an easy vote by any means; in fact it will be one of the most difficult votes I have ever cast,” Brady said in a written statement. Brady served on the conference committee that helped to craft the legislation. “It’s not fair to ask state employees and teachers who have paid every dime they owed to the system to make a sacrifice. It’s necessary, however, because governors and legislators who voted for budgets over the last decade did nothing more than delay the resolution we now have before us.”

Illinois Treasurer Dan Rutherford, who is running for the Republican nomination for governor, said the plan goes too far by not offering employees legitimate consideration for the benefits they would lose. “I have taken due consideration over the long Thanksgiving weekend to evaluate the proposal for State Public Pension Reform. Having examined the information available, I do not support the current legislation. I do not believe it will withstand judicial review should it pass the Illinois General Assembly,” Rutherford said in a written statement. “Strong beliefs are held in this debate, but fundamental to our rule of law is our Constitution. Our government’s obligation can be changed through a process involving adequate consideration to the employees. In my opinion, the legislation before us fails to address this relationship and offer adequate consideration in exchange for altering the pension benefits.”

Union leaders agree with Rutherford that the plan is unconstitutional. “It’s an unfair, unconstitutional scheme that undermines retirement security,” said a statement issued by the We are One Coalition last week.

University of Illinois leaders also oppose the bill. Previous versions of pension reform were based on proposals from the U of I’s Institute of Government and Public Affairs. “The University of Illinois called for a pension system that would be reasonable, responsible, sustainable and competitive with those offered by our peer institutions,” said an email to employees from U of I President Robert Easter; Phyllis Wise, chancellor of the U of I at Urbana-Champaign; Paula Allen-Meares, chancellor of U of I at Chicago; and Susan Koch, chancellor of the U of I at Springfield. “In our view, the legislation under consideration fails to meet those basic principles. The likely changes arguably lessen the retirement commitments made to employees and retirees, and their net effect also will harm the public higher education sector in Illinois.”

Hinsdale Republican Sen. Kirk Dillard, who also is running for governor, has yet to take a stance on the bill. He has instead called for multiple hearings and time before a vote to ensure that lawmakers understand the legislation. “Addressing pension reform is an essential first step in working our way out of a deep fiscal hole,” Dillard said. “But we must know what's in the bill and not rush a vote merely because we've been assured by the leaders and Gov. [Pat] Quinn that this is the best deal for the people of Illinois.” Dillard is not alone. Other Republican lawmakers have complained that they are being pushed to vote too quickly on the more-than-300-page bill.

 Supporters of the plan say the changes in the bill are nothing new to lawmakers who have been debating the issue for years. “We’ve been working on this issue for two years. There’s [been] plenty of time to take a look at every single aspect. It’s been debated, discussed, looked over, analyzed scrutinized — you name it,” Quinn said in Chicago today. “The time for review is fast eclipsing. It’s time now to vote. That’s what the people want. They want their legislators to take this bill that’s been discussed in many different ways and vote on it, and I think a vote ‘yes’ is the best way for our state to go.” Quinn said that the vote would be the “most important” fiscal vote taken by lawmakers during their legislative careers. But he said that anytime there is an important vote, opponents look for ways to block it. “There’s always going to be a do-nothing caucus, and they will say anything in order to continue to do nothing.” The governor added: “I think everyone who is interested in the future of Illinois, the common good, what’s good for taxpayers, should join us in urging a ‘yes’ vote tomorrow for the pension reform.”

Quinn’s own Lt. Gov. Sheila Simon issued a statement today opposing the plan. She says it should do more to protect low-income employees and retirees. “While I congratulate the legislative leaders who came together in a bipartisan way to produce a pension compromise, the proposed legislation puts too much of the burden on lower income workers and retirees,” she said. Simon is also in candidate mode. She is challenging Comptroller Judy Baar Topinka, and the statement was issued by her campaign staff.

Meanwhile, Republican venture capitalist and gubernatorial hopeful Bruce Rauner slammed the proposal, saying it would “guarantee a future of higher taxes.” He said the cuts to benefits do not go far enough and proposes moving workers into a 401(k)-style plan. Rauner and others argue that employee benefits earned to date are protected by the Constitution, but future benefits are not. “Government workers and retirees deserve to be treated fairly. But let’s not forget who pays for this — it’s the hard working taxpayers of our state, who themselves are struggling to make ends meet in an economy that is weighed down by the fiscal blunders in Springfield,” he said in a prepared statement. “We can have a pension system that is fair to both sides of this transaction, the government workers and the taxpayers who pay for it. True reform would cap the current system and fully put in place a 401(k)-style program that is similar to the retirement plans of most Illinoisans. That’s fair to workers and taxpayers, and it ensures we will never face a pension crisis again.”

While Rauner dismissed SB 1, many other business leaders in the state have voiced their support. “The pension crisis is by far the most pressing economic issue facing the state of Illinois today. Despite rapidly escalating pension contributions that are consuming the state’s budget and crowding out funding for critical state services, the fiscal health of the pension funds themselves continues to deteriorate. The bill is a good bill and deserves your support. It incorporates a number of benefit reforms that have been widely discussed and that we have supported in the past,” said a letter sent to lawmakers and signed by several prominent representatives of Illinois business. Those signed on include Tyrone Fahner, president of the Civic Committee of the Commercial Club of Chicago, a group that led the charge for pension reform in the state; Gregory Baise, president of the Illinois Manufacturers' Association; David Vite, president of the Illinois Retail Merchants Association; and Doug Whitley, president of the Illinois Chamber of Commerce. “While not a solution to all of the state’s fiscal problems, this bill is a significant step forward. It will stabilize the pension systems and help put Illinois on the path to fiscal stability.”

Northbrook Democratic Rep. Elaine Nekritz, who served on the pension conference committee, said of the letter: “I think that that will be very significant in giving people the security that they need that the business interests in the state line up in support.” Nekritz said that while others might have different ideas about how to tackle the problem, they don’t have the votes needed to pass their plans. “We’ve always been trying to achieve a balance with this legislation, and I think that this is a balanced approach, a moderate approach, a compromise approach that actually can pass. It’s one thing to talk about all the things that you’d like to see, but if you can’t put votes on it, then it isn’t any good.”

Those who would rather not see the bill pass tomorrow say that the opposition coming at the issue from two different sides — some arguing that it does not cut benefits enough and others that it cuts too much — could manage to kill the bill through their combined lobbying efforts. “What happens tomorrow, I don’t know?” said Rep. Raymond Poe, a Springfield Republican. Poe represents many state workers and says he does not support the bill. “If both of those forces get together, we may be back to start over again. So who knows where we’re at for sure. ... It’s going to be funny tomorrow to see how that all shakes out.”

Evanston Democratic Sen. Daniel Biss, who also served on the conference committee, said that the opposition on both sides of the spectrum is to be expected. “It’s a compromise. There are those on the right who oppose compromise, who are hard-line dead-enders and don’t want to see us accomplish something. And so we have those opposing it. And of course there are those in [organized] labor who are very concerned that it gives too much, and I understand where they are coming from. But the bottom line is, this is a reasonable sound compromise that saves a lot of money, shelters the people in greatest need and puts us on a path to sustainability.”

Both the House and Senate plan to hold session tomorrow. A hearing on SB 1 is scheduled for 8:30 a.m.  It's difficult to deny the politics of the issue when they may have even had a hand in the timing of a potential vote. The deadline for candidates — including potential challengers to legislators — to file paperwork to appear on the spring primary election ballot passed at 5 p.m. on Monday.

JPMorgan Chase to pay Illinois pension systems $100 million under federal settlement

By Jamey Dunn

As part of a $13 billion national settlement, JPMorgan Chase & Co. has agreed to pay millions to Illinois’ public employee pensions systems for not disclosing the risks associated with some investments.

As part of the settlement, JPMorgan Chase admitted that it the misrepresented the quality of mortgage-backed investments it sold. “Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” Attorney General Eric Holder said in a prepared statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”

Under the deal, the bank will pay $100 million to Illinois pension systems that purchased the investments prior to 2009. “We are still cleaning up the mess that Wall Street made with its reckless investment schemes and fraudulent conduct,” Attorney General Lisa Madigan said in a written statement. “Today’s settlement with Chase will assist Illinois to recover its losses from the dangerous and deceptive securities that put our economy on the path to destruction.” Madigan has been working with President Barack Obama’s Financial Fraud Enforcement Task Force. The group’s investigations spurred this and other settlements from big banks and mortgage servicers. According to a news release from Madigan, JPMorgan Chase will pay $72.4 million to the Illinois Teachers Retirement System (TRS), $16.2 million to the State Universities Retirement System (SURS) and $11.4 million to the Illinois State Board of Investment, which oversees the State Employees’ Retirement System (SRS), General Assembly Retirement System and Judges’ Retirement System (GARS).

The settlement is the largest in U.S. history. It also includes a $4 billion settlement with the Federal Housing Finance Agency and a $4 billion for the U.S. Department of Housing and Urban Development. Some of that money will go toward loans the bank is forgiving or giving more favorable terms to borrowers. Some will go to new low-interest loans to borrowers in areas hit hardest by the housing crisis. The funds will also be used to tear down long-abandoned homes.

JPMorgan Chairman and CEO Jamie Dimon said in a prepared statement: “Today’s settlement covers a very significant portion of legacy mortgage-backed securities-related issues for JPMorgan Chase, as well as Bear Stearns and Washington Mutual.” The company recently announced it has set aside $23 billion to pay for potential settlements.

Justice Department officials say that the settlement does not absolve JPMorgan employees from future civil or criminal charges. “The agreement does not release individuals from civil charges, nor does it release JPMorgan or any individuals from potential criminal prosecution. In addition, as part of the settlement, JPMorgan has pledged to fully cooperate in investigations related to the conduct covered by the agreement,” a statement from the department said.

Veto session is over, or is it?

By Jamey Dunn

Illinois lawmakers approved the spending to set up the state’s concealed carry of firearms permit today, but other issues such as pension reform, tax breaks for corporations and enhanced penalties for gun offenders will have to wait.

The House adjourned abruptly this morning after a procedural move blocked a bill to increase mandatory sentences for drug crimes. Senate Bill 1342 would increase the mandatory minimum sentence for felons or gang members caught carrying a gun without a Firearm Owners Identification (FOID) card to four years. The proposal would require those convicted of the crime to serve 85 percent of their sentence.

Sponsor Mike Zalewski, a Riverside Democrat, removed a provision that would have applied to first-time offenders and in doing so was able to get the support of the National Rifle Association. But members of the black legislative caucus opposed his bill. Chicago Democratic Rep. Kenneth Dunkin used a House rule to block the bill from being called for a vote because the budgetary impact of the measure was not made available to lawmakers through a formal process known as a note. “I filed the note on behalf of the Illinois legislative black caucus for those of us in the House and the Senate,” Dunkin said. We have expressed time and time again that we have some basic problems with this mandatory minimum — that it’s too all encompassing, it takes in way too many people unnecessarily. The collateral damage is going to be overwhelming, and it’s going to wrap up too many innocent citizens. All we simply wanted to do was to make sure that the bill went after the bad guys.”

After the notes were filed and the information was not immediately available, House Speaker Michael Madigan quickly adjourned the fall session. Harrisburg Democratic Rep. Brandon Phelps, who sponsored the state’s new concealed carry law, has been working on the bill with Zalewski. He said he was not exactly surprised that the bill did not move forward today because he said many Democrats told him they had reservations about it. “The speaker said that we’re not doing it today, more or less. ... We spent so many hours working on this and we had a deal. Now we’re not doing it today at all. So we’ve got to come back in December, hopefully we’ll call it then.” Several House members mentioned as they exited the chamber that they expect they might return in December to take up public pension legislation.

Zalewski, who has partnered with Chicago Mayor Rahm Emanuel to push for the proposal, blamed the Illinois Department of Corrections for not providing details of how the measure would affect its budget and prison population. The IDOC opposed the bill because officials said the department did not have the money or capacity to house the population in crease it would cause. “The Department of Corrections knows how much the bill costs. It’s their basis for their opposition of the bill. Yet they couldn’t walk down to the House clerk’s office and file it in time,” Zalewski said.

A spokesman for the department said the changes to the bill yesterday made it difficult for them to recalculate the impact quickly enough. “This is a very complex piece of legislation, and every time the sponsors file amendments changing provisions of the bill, there is substantial work and analysis that must be done to determine the impact of the changes,” Tom Shaer with IDOC said in an email. “Amendment 5 was just added to this bill yesterday afternoon. IDOC has had staff analyzing the impact of this amendment since that time. We have tremendous respect for everyone in this process and are obligated to furnish them with accurate information and thorough, well-researched projections.”

Members of the black caucus say they want to address the violence in a more holistic way that includes investments in education and rehabilitation programs. “There is a way to do both of these things. To make sure that the people that need to go into prison go into prison but that we also deal with the 40 percent of people who are there for nonviolent offenses, who need to be in cheaper alternative programs that give them a better chance and a shot at life. While also making sure that the folks who need to be there, and that’s felons and gang bangers, actually end up in prison — in a prison that has room for them to be there,” said Chicago Democratic Rep. Christian Mitchell. “I think that the mayor and Rep. Zalewski are trying to do the right thing, but the how really matters.” Some caucus members added that they were concerned that some of the previous felonies that would make offenders eligible for the mandatory minimum sentence were nonviolent offenses, such as shoplifting. They also said they would like to see a time limit, so that a crime that occurred a decade ago would not make someone eligible for a mandatory minimum sentence.

Zalewski said he has been working to negotiate the bill and that some who are opposed will never support the concept of mandatory minimum sentences. “I’ve negotiated on this bill for six weeks. ‘No’ is always going to be the answer for some people. You saw it today. You saw an unwillingness to have a debate about public policy and public safety. And [opponents] resorted to tricks because the votes were there. That’s what happens in this building sometimes.” But members of the black caucus disagree that the bill would have passed if called for a vote.

Meanwhile the Illinois Senate approved a supplemental spending bill worth about $50 million. The largest chunk of that, almost $34 million, is for implementation of the concealed carry licensing system. Only about $500,000 of the spending in the bill comes out of the General Revenue Fund. House Bill 209 does not include the $112 million that would be needed to give state workers back pay. In 2011, lawmakers did not appropriate the money for contractual raises for state employees, but a judge ordered the state to pay the increases with interest. House Speaker Michael Madigan has said that state agencies should work within their current budgets to find the money for the pay. Sen. Mike Jacobs, a Democrat from East Moline, voted in favor of the bill, which received broad bipartisan support. But he said that lawmakers would eventually need to approve the money for workers. “I just think it’s important that the Senate knows that we owe this money and at some point in our career, in our lives, we ought to pay it.”

With the House adjourning after less than an hour spent in session today, many issues were left without resolution. Supporters of tax break plans for Archer Daniels Midland Co. and the newly formed Office Max Inc. saw no urgency to call those measures for a vote in the Senate when it became clear that the House would not vote on them today. ADM is looking to move its headquarters from Decatur and is considering Chicago, among other options. Office Depot Inc., the product of a merger between Office Depot and Office Max, is choosing between Naperville, Office Max’s current headquarters, and Boca Raton, Fla., where Office Depot is based.

The House also did not take up a bill that passed in the Senate yesterday to restore Medicaid dental benefits to adults. Chicago Democratic Rep. Monique Davis said that she thinks that the House will likely approve that bill early next year. “I think it’s going to pass. I think it’s going to get a lot of support. We’ll get it when we first come back in January. We’ll be able to do that because that will be one of the first few days we can do that.” If lawmakers wait until January on some issues, they will need fewer votes to achieve an immediate effective date on legislation. “Don’t think because we’re not on that House floor that people aren’t working. People are working,” Davis said. Some issues may not have to wait until January. House Speaker Michael Madigan has said that he hopes lawmakers will hold a session to vote on changes to the state’s public pension systems. Legislative leaders met on the issue last week and say they feel progress was made. They sent components of a plan to the pension systems to get cost savings estimates. Those projections usually take about 10 days to produce.

Having another potential shot at a legislative session soon may give those who could not get their bills passed during veto session another bite at the apple. However, knowing that they could be back at the Statehouse in the near future, lawmakers may have deflated some issues by taking urgency out of the situation. Why take the controversial vote today that can be pushed off for another month? Still, with the historic passage of same-sex marriage, approval of a supplemental appropriation bill, and both chambers passing changes to the pension system for Chicago Park District employees, this veto session was more eventful than many in recent memory.

First week of veto session shaping up to be a bust

By Jamey Dunn

The Illinois General Assembly's fall veto session was off to an anticlimactic start today, as hearings on some of the most closely watched issues were canceled.

The House Revenue and Finance Committee did not take up a proposed tax break for Archer Daniels Midland. Committee chair Marion Democratic Rep. John Bradley had few details to share about the proposal, which supporters hope would persuade ADM to put its corporate headquarters in Chicago. ADM announced earlier this month that it plans move its headquarters out of Decatur. The company would leave most of the current jobs in Decatur, but about 100 positions would go with the transfer. “They’re under consideration at this point,” Bradley said of several tax breaks being pitched to lawmakers. OfficeMax and Office Depot are planning a merger and have approached lawmakers for a tax break. OfficeMax is based in Naperville and Office Depot is headquartered in Florida. So the two states are now in competition for the headquarters of the final merged company. The two office supply companies area seeking a tax break similar to the one ADM is looking for. In the end, a tax break omnibus bill may emerge.

However, Gov. Pat Quinn has said that he will not sign “special” tax breaks for businesses until lawmakers approve changes to the state’s public pension systems. But Bradley did not seem phased by Quinn’s statements. “We’re used to rhetoric like that coming out of the governor’s office.”

A hearing on a proposal, backed by Chicago Mayor Rahm Emanuel, to increase penalties from some gun crimes also did not occur today. The sponsor, Chicago Democratic Rep. Michael Zalewski, is reportedly in talks with the National Rifle Association. If the negotiations are productive, a compromise bill could emerge as early as tomorrow.

Several budget hearings were held today, and a picture of what Quinn’s office would like to see in a supplemental appropriation became clearer. Ben Winick with the Governor’s Office of Management and Budget told a House committee that $97 million in unexpected revenues have been transferred into the General Revenues fund, and the budget office expects an additional $262 million in sales tax revenues that were originally underestimated. However, he said that telecommunications tax receipts would likely come in $46 million shy of estimates. Still, by Quinn’s budget staff’s count, there is about $313 million in funds to potentially spread around. The governor is asking lawmakers to approve about $112 million to pay back wages to state workers. A judge ordered the state to pay the wages with interest. Quinn’s staff is urging lawmakers to pay them sooner, so less interest is piled on.  Some agencies have already been able to find the money for back pay in their budgets. Senate Bill 2603 would fund back wages for the Department of Human Services, the Department of Public Health, the Department of Corrections, the Department of Juvenile Justice and the Department of Natural Resources. Other supplemental appropriations bills have not been filed, meaning that the details are likely not worked out yet. The governor’s office is also looking at spending some of the money on setup costs for the state’s licensing system for concealed carry of firearms.

Meanwhile, Quinn and several other elected officials spoke at a rally at the Statehouse for same-sex marriage. Quinn has called on lawmakers not to be distracted from pension reform by other issues, but he said today that same-sex marriage is an exception. “I think this is a civil rights issue, and anytime there is an issue about rights of people, that deserves important consideration.” Opponents to same-sex marriage are scheduled to hold a rally tomorrow. It is not clear if same-sex marriage supporters will be able to find the votes needed to pass a bill during veto session.

House Minority Leader Jim Durkin was officially sworn into his new leadership role today. His statement to Illinois Issues earlier today that veto session is "generally overhyped" seems to be proving true at this point. The House and Senate have already canceled their Thursday sessions, indicating that little is likely to happen this week. Lawmakers are scheduled to return for the last week of the veto session on November 5.

Durkin: Pension reform plan must include GOP ideas to get GOP votes

By Jamey Dunn

New House Minority Leader Jim Durkin said today that if Democratic leaders want Republican votes on pension changes, they will have to include some proposals from Republicans in the final bill.

“I think it’s interesting that the Democrats have said there has to be Republican participation in a vote, but they need to take our suggestions as well. This isn’t a matter of Senate Democrats and House Democrats negotiating amongst themselves. If they want our participation — they want our votes — they will need to take our considerations and incorporate them in a bill,” Durkin said in an interview with Illinois Issues. He added: “Otherwise, they’ve got 71 in the House, and they’ve got 40 in the Senate. They can pass a bill on their own. Good luck. Go do it.”

Durkin said he thinks the work of a conference committee on pensions has moved the process forward on finding legislation that could pass in both chambers. But he and other Republicans want to see some tweaks made to cut pension costs further. “I think what is promising is that there has been progress made. There needs to be more progress, and there needs to be an additional uptick in the savings. But that’s still open for negotiation.” He said that annual cost of living adjustments (COLAs) would likely have to be the target for more savings. The committee has been considering a proposal that would tie the COLAs to inflation. Employees currently receive a 3 percent annually compounded COLA. “The COLA, I think, is the most important part of the pension reform. I would say the most strain on the system has been through the 3 percent compounded COLA. To me, that is where a majority of the savings are going to be made.”

Durkin said he thinks it “may be a bit lofty” to expect that the issue will be tackled in the six session days that are scheduled for veto session. “I’ve been down here for a few terms, and one thing that I know about veto sessions is that they are generally overhyped,” he said. “This issue has such a profound impact on the state of Illinois — its residents, its employers — to just arbitrarily say that we have to get this thing done within six days in October and the first week of November, I’m not sure if that’s the right thing to do. I want to do it right, and I want to do it once. If it takes us a little bit more time to get there, so be it.” But he said he does not want to see the issue go to far into the spring legislative session without a resolution because he said that next year’s elections could create a political climate that would make it difficult to get a bill passed. He said he is also concerned that the state could face another downgrade of its credit rating if lawmakers take too long to approve a plan.

 The minority leader said he has met with House Speaker Michael Madigan and hopes to work with him. “My job is not to be someone who is the minority blocker or the minority agitator. The issues are too profound and too robust and too challenging for people in Illinois for the Republicans just to be the party of no. I want to work with the Democrats, whether it’s the Senate president or the speaker, to get the issues done,” he said. Durkin said he and Madigan have always had a “cordial” relationship. “I’ve met with him. And right now, I think we’re just trying to get to know each other a little bit more. It’s different when you’re a member and on the other side. But I look forward to working with him on the right issues.”

In his own party, Durkin said, he plans to be a flexible leader and does not expect members of his caucus to vote in lockstep with him. For instance, he does not support same-sex marriage. However, he said: “It’s up to the individual members to make a decision of how it plays out in their district, and that’s all I ask them to do. It’s a deeply personal [and] very emotional issue. And I think that each member needs to make a decision about how it best works and fits in their district, and I just advise them to vote their conscience.” Durkin, a Catholic, said he has received calls from church leaders in the state asking him not to support the bill. He said that the state already has provisions, such as civil unions, that protect same sex couples.

But Durkin said he plans to back incumbents in primaries next year, regardless of how they vote on the issue. “I’m supporting every one of my colleagues who’s here, no matter how they vote on this issue, or any other issue. We are a caucus that is diverse, and we’re not going to agree on every issue. But my pledge to every one of them when I was elected two months ago was that I want each and every one of them to be returning with me when we get sworn in. ... I will support every one of my incumbents who have a primary challenge, no matter what [side of an] issue they take or whatever vote may prompt a primary.”

For more on the veto session, which begins today, see our preview here.

Veto session preview

By Jamey Dunn

Our October issue has a helpful preview of the Illinois General Assembly's fall veto session. (It is only available in the print edition until Nov. 1, when it will become available online.) Many of the issues that could crop up are the same ones left unresolved at the end of the spring legislative session. But there have been some developments and changes since that story was published. Here are some things to watch for as lawmakers return to the Statehouse for veto session this week: 

Public pension changes 
Don’t expect much to happen this week on the most highly anticipated issue. Lawmakers working on a committee to propose changes to the state’s pension systems say they will not have legislation drafted in time for a vote in the first week of veto session. Details of a plan that they were considering went public in August. The plan would toss out the 3 percent annual compounded cost-of-living adjustment retirees currently receive. Instead, cost-of-living adjustments would be half the rate of inflation. The rates would have a base level and cap set. The change would likely result in smaller COLAs for retirees, but if inflation goes up, so will the COLAs. Employees would contribute 1 percent less to their retirement benefits. The retirement age would not change. The proposal is estimated to reduce the almost $100 billion unfunded pension liability by $18.1 billion and save the state $145 billion over 30 years.

But some Republicans say the plan would not save enough money. They want to see some tweaks made, including decreasing the base guaranteed COLA, making the cut to employee contributions smaller, increasing the retirement age and offering an optional 401(k)-style plan to employees in all the pension systems. Right now, such a plan is only offered to university employees. The Republican members of the committee had these ideas scored by actuaries to estimate their potential savings and just got the numbers back at the end of last week. “We don’t have a bill that’s written yet. I don’t see us doing anything on pensions in veto next week,” said Naperville Republican Darlene Senger.

Aurora Democratic Sen. Linda Holmes said Democrats on the committee are open to the Republicans suggestions. However, ideas such as adding a 401(k) component or changing the retirement age could be non-starters. “I don’t think that our side really wants to touch retirement age,” she said. Northbrook Democratic Rep. Elaine Nekritz said that while there will not be a lot of outward action on pensions, there will likely be a lot of behind-closed-doors meetings taking place this week among legislative leaders and members of the legislature. She says of the Republican proposals: “Personally I supported a bill that had a larger level of savings, so I don’t object to moving in that direction. But we have to find something that will meet everybody’s needs.” She said she hopes the committee will have a final plan to present to the General Assembly by the last week of veto session, which is scheduled to begin on November 5. “That is my fervent hope.” Lawmakers are not in session the last week of October. Nekritz said she thinks it is likely such a plan would get a hearing before a floor vote, but she said it might not be a procedural requirement. She said she would prefer a hearing. But she notes, “I don’t control the gavel.” Senate President John Cullerton told the Associated Press that a bill could be called in the Senate even if the committee cannot come to an agreement, but it could be harder to pass something in both chambers without a bipartisan stamp of approval from the committee.

Gov. Pat Quinn will likely talk about little else in the coming weeks as he has made pension reform his top priority. He vetoed lawmakers’ pay this summer, saying they should not get it until a bill was passed. However a judge ruled against his veto, and they started getting their checks again in September. The Illinois Supreme Court has agreed to take up the case and will likely hear arguments in the spring. Quinn is voluntarily not taking a paycheck. He says he will not take his pay until a bill is sent to his desk.

Same-sex marriage
Proponents are optimistic about passing same-sex marriage in the near future, but whether it will happen in the veto session is unclear. Some advocates say they have the votes but are not willing to indicate whom they have brought on board in the House. That makes sense because Republicans who have made their support public have faced protests and are now likely to have primary challengers. To pass as is, the bill would need 71 votes now. But if the bill’s sponsor, Chicago Democratic Rep. Greg Harris, waits until January, the deadline to file petitions to run in the primary will have passed, and the bill would only need 60 votes. He opted not to call the bill at the end of the regular session because he said he did not have the votes, and some House members wanted time to poll their constituents.  Harris, as always, will not share his vote count. But he told the Chicago Tribune that now is the time to legalize same-sex marriage. “It's the right time, and it's the right thing to do” he said. “Momentum is in the direction of this vote.” Supporters and opponents have rallies at the Statehouse scheduled this week.

ADM tax breaks
Archer Daniels Midland announced earlier this month that it plans to move its headquarters from Decatur, where it has been based for more than 40 years. The company says it would keep jobs that are in Decatur now but would move about 100 positions to the new headquarters. It appears that Chicago is on ADM’s short list of potential locations for its headquarters, but ADM is seeking up to $24 million in tax breaks from state government during the next 20 years. The legislation is scheduled for a House committee hearing on Tuesday. Few lawmakers are vocally supporting the proposal, and there are plenty of critics. But if it seems that ADM might really leave the state, votes could line up behind the legislation. However, Quinn has said he will not sign legislation with tax breaks for ADM before changes to the pension systems are approved. “Our number one way to help business is to get pension reform. We need ADM and all of our big businesses to band together, put pressure on the legislature — the House and the Senate, Democrats and Republicans — to get a vote on the pension reform. That helps everybody. That helps every business. That helps every taxpayer,” Quinn told reporters in Chicago earlier this month. “I think we need to have a moratorium on any special legislation for tax breaks for corporations. We have to focus on pension reform.” But Quinn’s relationship with the legislature after he cut off their pay may be frosty enough that his opposition on any issue could potentially give it a boost.

Gun crime sentencing
Some Chicago leaders, including Mayor Rahm Emanuel, are calling for the legislature to pass tougher sentencing laws in the hopes of quelling the deadly gun violence taking place in parts of the city. The push comes after a shooting in a park injured 13 people, including a 3-year-old, last month. The National Rifle Association and prison watchdog groups oppose the measure. The watchdog groups worry that longer sentences would strain the state’s already crowded corrections system.

The NRA has illustrated its ability to stop a bill in its tracks many times in the General Assembly. So unless the sponsor, Chicago Democratic Rep. Michael Zalewski, can work out a deal with the group, it could be a tough battle. The legislation is scheduled for a House committee hearing on Tuesday. 

Committee Hearings
Several issues are scheduled for “subject matter only” hearings during the veto session. That means witnesses will likely come in to testify and lawmakers can ask questions, but no committee vote is taken on legislation.

• Gambling expansion It seems unlikely that lawmakers will vote on a gaming bill during the veto session, but there is a House hearing on the topic scheduled for Wednesday. Quinn has not said that he would give a gaming bill the same treatment as an ADM tax break if it landed on his desk before pension reform. However, he has warned lawmakers in the past not get distracted by the “shiny object” of a gambling expansion when he feels they should be working to get pension changes passed. He has vetoed two gambling bills in the past and said last year that he could only approve one if it had strict regulations and the money went to education.
• Budgetary issues Several House budget committees are holding hearings on potential supplemental appropriations. It is the time of year when agencies tend to come to lawmakers looking to patch budget holes. Union leaders may also be seeking an appropriation for workers’ back pay from raises there were promised but did not receive. Quinn’s budget staff has said that workers should get the money under a new deal the state made with the unions. However, House Speaker Michael Madigan seems less than warm to the idea. Since there are no bills drafted and in committee, it seems more likely that such budget issues might be tackled in January. Quinn may also be reluctant to sign more spending unless pension changes pass. UPDATE: There is a bill for employee back pay, Senate Bill 2603. It had not been posted to an appropriations hearing as of Monday. Union officials are working to lobby lawmakers. “A circuit court judge has already ruled that the money must be paid. Now Gov. Quinn has agreed, too. But it is up to the state legislature to appropriate the funds that are needed,” says a call to action to its members from the American Federation of State County and Municipal Employees Council 31. 
• Paint disposal One hearing that may lead to legislation down the road is scheduled for November 4. Lawmakers are looking to create a program to ensure that paint is properly disposed of in the state. Holmes, who sponsors the Paint Stewardship Act, said the committee is seeking input and hopes to get an end product that sellers and industry can agree to. Under such a plan, a small fee would be added to the cost of paint, and the money would be used to set up the program. Holmes cautions that the idea is still in a very early stage and could see major changes as the process continues. “What we want to do is have everyone on board with it,” she said.
• Retiree health care The Commission on Government Forecasting and Accountability is scheduled to hold a hearing on state retiree health benefits on Wednesday morning. We will have coverage on the blog.

Committee hearings are also scheduled on the topics of college affordability, performance-based funding for universities and giving underfunded K-12 schools a break from some statutory requirements. There will be a lot going on this week, but time will tell if much actually gets done. All those hearings may be in part window dressing because much of the big legislation will not be ready for prime time until the final week of veto session in November. Lawmakers may also not be too excited to jump onto controversial bills this week when they can always put the votes off for two more weeks. However, if a sponsor thinks the votes are lined up for a bill, he or she will want to call it before anyone has time for a change of heart.

Quinn plans to appeal order to pay lawmakers

By Jamey Dunn

A judge has ordered the state to cut lawmakers' checks after Gov. Pat Quinn used his veto pen to cut off their pay. UPDATE Friday September 27: Cook County Circuit Court Judge Neil Cohen denied Quinn's request that lawmakers hold off from getting paid during Quinn's appeal of his ruling. Quinn is appealing Cohen's ruling directly to the Illinois Supreme Court and plans to go to an appellate court to seek a stay to block lawmakers' pay after Cohen denied the move today. Comptroller Judy Baar Topinka started processing checks yesterday, so some legislators, who use direct deposit, may already have the money in the bank. UPDATE: Quinn's appeal of the stay was denied by the appellate court. 

Quinn cut out the money for legislators' pay because they failed to pass pension reform legislation before a deadline he set in July. “Admittedly, this is a drastic measure, but I think it’s absolutely necessary to get a wake-up call to the members of the General Assembly that the people of Illinois are tired of excuses. They’re impatient with the fact that the taxpayers pay when the General Assembly doesn’t do its pension reform job,” Quinn said when he vetoed the pay. He also stopped taking his own paychecks and vowed to do so until pensions changes reach his desk.

But Cook County Circuit Court Judge Neil Cohen ruled today that Quinn violated the state’s Constitution when he changed lawmakers’ pay during their terms in office. The legislative article of the Constitution states that “changes in the salary of a member shall not take effect during the term for which he has been elected.” Quinn said he intends to appeal the ruling. Quinn’s lawyers argued that the provision was intended to keep lawmakers from increasing their own salaries, and as long as he was reducing them, he was constitutionally exercising his line-item veto power. Cohen did not agree. He looked to the common meaning of change as defined by Merriam Webster’s and the New Oxford American Dictionary, which describes change as “to make or become different.” The governor asked the court to consider the intent of the framers of the 1970 Constitution, but Cohen declined to do that because, he writes in his opinion, there is no “doubt as to the common meaning of changes.”

Cohen ordered state Comptroller Judy Barr Topinka to issue lawmakers’ paychecks, including interest for the time they have gone without pay. Topinka said she disagreed with Quinn’s move when he made the veto. However, she said that until there was a court ruling or the General Assembly voted to override the veto, she did not have a legal way to pay lawmakers. Topinka said today that she will begin the process immediately. “In light of today's court ruling, I have instructed my staff to begin processing salary payments for Illinois lawmakers. I have consistently said action was required by the General Assembly or the court to authorize restoration of those payments. That has now occurred, and the comptroller's office will comply. Processing of paychecks for August, September and October begins today,” she said in a written statement.

Democratic legislative leaders House Speaker Michael Madigan and Senate President John Cullerton brought the lawsuit against Quinn. “Today, the circuit court vindicated the Illinois Constitution as Judge Cohen ruled to protect and preserve the separation of powers. Now that the governor’s actions have been answered by a court, I trust that we can put aside all distractions and focus on the goal of pension reform,” Cullerton said today in a written statement. “Pension reform remains our top priority. Even while this case was pending, the legislature never stopped working on this issue. I applaud the progress of the pension conference committee as its members shape a pension plan that maximizes our savings and upholds a fundamental standard of fairness.” A spokesperson for Madigan said in an email that the speaker does not plan to comment until the issue is resolved.

Quinn said in a written statement after the ruling that he would appeal. “I respectfully disagree with the judge’s decision,” he said. “On behalf of Illinois taxpayers, I intend to appeal the decision and seek a court stay that would prevent any legislative paychecks from being issued until this case is considered by a higher court.” His statement went on to say: “However, this case is about far more than just the governor’s constitutional authority to suspend the appropriations for legislative paychecks The reason I suspended legislative paychecks in the first place – and refused to accept my own – is because Illinois taxpayers can’t afford an endless cycle of promises, excuses, delays and inertia on the most critical challenge of our time. ... I will not accept a paycheck until a comprehensive pension reform bill is on my desk, and neither should legislators. Nobody in Springfield should get paid until the pension reform job gets done.”

Senate Minority Leader Christine Radogno said that an appeal from Quinn would be a waste of time and money. “It will be unfortunate if the decision is appealed and a further waste of taxpayer dollars. Pension reform discussions are moving along with committed legislators meeting regularly, negotiating and working toward a compromise. Illinois desperately needs pension reform. Yet another legal maneuver is a distraction we don’t need.”

Northbrook Democratic Rep. Elaine Nekritz, who has been a key player on the pension issue in the House, has said before that she thinks Quinn’s veto was counterproductive. She said that some lawmakers might fear that a vote on pension reform could look more like a vote to get their paychecks than one to address the troubled retirement systems for state employees. Nekritz said today that the conference committee, which has been working through the summer to try to craft a bill that can pass in both chambers, has done its best to ignore the pay issue. “It didn’t really impact our timeline or our work schedule or our negotiations.” Some Republicans are reportedly unhappy with the framework that the committee is considering, and Nekritz said she has decided to stop trying to predict when the group will have a finished product. “We’re still at the table. We’re still negotiating.” And she said that as long as that is the case, she is hopeful that an agreement can be reached.