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Governor Calls Special Session To Deal With Pension Reform

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Illinois State Capitol

Illinois State Capitol buillding in Springfield (AP Photo)

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CHICAGO (CBS) – Gov. Pat Quinn has called for a special session of the Illinois General Assembly next month in an effort to finally reach a consensus on pension reform.

Quinn has called lawmakers back to Springfield on Aug. 17, when the Illinois House was already scheduled to convene to vote on an effort to kick indicted State Rep. Derrick Smith out of the House.

The governor’s call for a special session means the Senate must convene that day also.

CBS 2’s Dana Kozlov reports the governor wants lawmakers to finally take action to address the states $83 billion in unfunded public pension liabilities.

The legislature failed to reach an agreement on pension reform during its regular spring session, even though legislative leaders and the governor had said pension reform was a top priority this year, to avoid another downgrade in the state’s bond ratings. But pension reform has been on hold since then, after last-minute efforts to cobble together a deal fell apart in May.

Many lawmakers would be in Springfield anyway on Aug. 17 for the Illinois State Fair, so the governor is essentially asking them to put away the deep fried butter and other fair foods, and head back to the Illinois State Capitol to hammer out a deal on pension reform.

House Speaker Mike Madigan has said suburban and downstate school districts must begin paying their own share of teacher pension costs – as Chicago already does – rather than continue relying on state funding, but Republicans and many downstate Democrats have balked at that idea.

As the May 31 deadline approached to pass pension reform with a simple majority vote in the Legislature, Quinn convinced Madigan to drop that controversial proposal, and allow House Minority Leader Tom Cross (R-Oswego) to try to pass a plan that didn’t rely on the pension shift. But Cross couldn’t get enough votes for his plan, and pension reform has since stalled.

Now, Quinn is renewing the push for the controversial teacher pension shift, calling for a 12-year phase in requiring local school districts throughout the state to pay the employer’s share of teacher pensions.

He said the rising costs of paying for the state’s underfunded pension systems have been squeezing out money for vital day-to-day expenses, forcing cuts in state funding for education and other programs.

“We can’t continue on this path. This is a very bad path for jobs and economic growth,” Quinn said of the continued stalemate on pensions.

The massive pension liability is draining $12.6 million a day from the state’s coffers, all to meet pension payments for five state retirement funds.

“Getting rid of that $83 billion cloud over our head – that liability cloud – that hurts our ability to build and make things in Illinois. We can do a lot more,” Quinn said.

The state’s underfunded pension funds have been a problem hanging over Springfield like a funnel cloud for years. The Illinois Senate passed its own pension reform plan this spring, but the House did not take up the Senate plan as it haggled over its own rival plans.

However, the Senate proposal deals with only two of the state’s five pension systems, and some say that leaves a lot of work to be done in only one day of special session.

State Rep. Lou Lang (D-Skokie) said, “If we’re gonna go down on that day – with no bill on the table and no agreement – and expect in just two or three hours to negotiate, debate, and pass something, I just don’t think that’s going to happen.”

Asked if he’s prepared to keep the General Assembly in Springfield for more than a day, until something happens on pension reform, Quinn said, “I think everything can be done in one day, and I think it should be done in one day.”

Roosevelt University political science professor Paul Green said, “The key will be whether or not they can iron out all the differences ahead of time, and ratify on Aug. 17. … Mr. Madigan is not someone to be pushed around, and we’ll see what he is all about on this. But the crucial time will not be on Aug. 17. The crucial time will be between now and Aug. 17.”

Given that shifting teacher pension costs from the state to local school districts would likely mean big property tax hikes in the affected towns, many lawmakers could be hesitant to vote in favor of such a plan less than three months before the November election.

But one member of the governor’s staff said, at the very least, the Aug. 17 special session should get every lawmaker on record for exactly where they stand on this critical issue.

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