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Unions reject plans for pension overhaul

Published: Thursday, Dec. 6, 2012 9:33 a.m. CDT

(MCT) — A public pension overhaul bill rolled out by rank-and-file House lawmakers Wednesday drew fire from unions as backers started the arduous task of building support to pass it.

The financial impact of the plan still must be calculated to ensure it works, though proponents expect savings to be significant enough to fully fund the heavily indebted pensions in 30 years. In addition, House and Senate lawmakers need to iron out differences on whether they think the bill would pass constitutional muster.

The bipartisan group of 21 House members led by Democratic Reps. Elaine Nekritz of Northbrook and Dan Biss of Evanston is trying to pass the retirement system overhaul before a new Legislature is sworn in Jan. 9. Until then, as many as three dozen lame-duck lawmakers may be persuaded into taking a tough vote.

Biss said the bill is a framework, signaling that they are open to making changes to pick up support.

Standing with several Chicago area colleagues, Nekritz said the bill is backed by a broad coalition that has "more momentum" than any other recent pension proposal to address the state's $96 billion debt.

The proposal would impact teachers, university workers, lawmakers and many state workers.

Among the items in the bill getting attention: employees would kick in 2 percentage points more from their paychecks, cost-of-living pension increases would be limited and public employees would have to work longer before retiring.

The move comes as Gov. Pat Quinn presses legislators to send him legislation to cut pension costs. His spokeswoman welcomed the legislation as a step forward.

House Speaker Michael Madigan, D-Chicago, gave his support to the plan because it represents a comprehensive pension overhaul — a standard he's used when supporting other pension proposals, said Steve Brown, the speaker's spokesman.

House Republican leader Tom Cross of Oswego was more cautious, saying he liked some components but was not ready to sign on to the whole package. "It's got the discussion going again," Cross said.

The proposal contains a provision similar to one pushed by Madigan to shift the costs of suburban and downstate teacher pensions from the state to school districts. Some lawmakers are concerned that would lead to higher property taxes. But Rep. David Harris, an Arlington Heights Republican who is a co-sponsor of the bill, said school officials in his legislative district have signaled they may be able to absorb higher costs if stretched over many years.

A coalition of unions for teachers, university workers and rank-and-file state workers chastised the legislative sponsors for developing the new plan without labor input, contending the bill balances itself on the backs of workers and might be constitutionally unsound.

The Senate has taken the position that employees need to be given a choice if benefits are changed, such as choosing between keeping a cost-of-living pension increase or health care in retirement. But Nekritz suggested no one can determine how the Illinois Supreme Court would ultimately rule.

Even so, Democratic Sen. Kwame Raoul of Chicago, a leading voice on pension issues, said any overhaul should be patterned after legal precedents that the Senate is trying to follow. He remained hopeful legislation could be passed in January because the political risk of taking a tough vote is "decreasing because we have to do something."

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