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Quinn Rejects Union Pension Plan, Cross Urges More Special Sessions If No Deal Friday

Illinois State Capitol

Illinois State Capitol buillding in Springfield (AP Photo)

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Updated 08/14/12 – 5:38 p.m.

CHICAGO (CBS) – As he prepared for the special legislative session he called for this Friday in Springfield, Gov. Pat Quinn was shooting down a pension reform proposal being pitched by the state’s labor unions.

WBBM Newsradio’s Regine Schlesinger has been talking with the Governor this morning, after – for the first time – a coalition of public employee unions publicly committed to paying more towards their retirement. But, in return, they want the state to guarantee full and timely state contributions – rather than skipping, or shorting state contributions in tight budget times.

Quinn said, since he took office, the state has been making its full pension payments on time, and he said the unions will have to offer more to help save money on pension costs.

LISTEN: WBBM Newsradio’s Regine Schlesinger Reports

“The public employees yesterday, their proposal was wholly insufficient. That will not get the job done. They have to do a little better,” Quinn said.

The governor has ordered a special session on Friday, for state lawmakers to vote on pension reform.

WBBM Newsradio’s Brandis Friedman reports House Minority Leader Tom Cross (R-Oswego) said if lawmakers can’t come up with a solution to the state’s pension woes on Friday, he thinks Quinn should keep lawmakers in special session longer, rather than let them wait to act until after the November election, when the state’s massive pension debt will have ballooned even further.

“My belief is, the longer you put it off, the choices get even tougher, and tougher, and tougher,” Cross said.

Cross, like Quinn, said the unions’ pension reform plan doesn’t do enough.

LISTEN: WBBM Newsradio’s Brandis Friedman reports

Meantime, Quinn also continued to defend one of the most controversial parts of his pension reform plan – shifting the burden for paying the employer’s share of teacher pension costs from the state to local school districts. Currently, only Chicago Public Schools pay the employer’s share of teacher pensions. Suburban and downstate school districts rely on state funding.

That provision proved to be a roadblock to reaching an agreement on pension reform before the end of the spring session earlier this year.

CBS 2 Chief Correspondent Jay Levine reports, because of the dispute over the teacher pension shift, there appears to be no end in sight to the pension reform stalemate.

Suburban and Downstate Republicans can’t live with the teacher pension shift. Chicago Democrats can’t live without it, and – although he sides with his fellow Chicago Democrats – Quinn is trying desperately to break the stalemate.

“It’s hard, no doubt about it,” Quinn told Levine. “Anytime you deal with something as demanding as pension reform, a lot of legislators would just as soon do something else, but we don’t have any more time.”

Quinn said the teacher pension shift is a matter of simple fairness, and is pushing a plan to phase-in the shift over a 12-year period to ease the burden on local school districts.

“A very little bit a year. There’s not going to be any impact on property taxes. It’s fundamentally accountable government, and too many times in Illinois we haven’t had that. We’ve had government that tries to slip things under the rug, or shift things down the road,” Quinn said.

The governor said the state’s swelling pension debt is not only threatening its bond rating with credit agencies, it is squeezing out funding for basic state-funded services, like public education.

“We won’t have enough money for our schools for our children. What kind of legacy is this, if we don’t reform the pensions system?” he said. “We put all our money in the retired state employees, and not enough in the children of Illinois to get a good education.”

That’s why Quinn summoned lawmakers to Springfield this Friday, even though the two sides appear no closer to a deal than they were in May, when they ended their spring session without a deal on pension reform.

Mayor Rahm Emanuel said it’s “critical” for lawmakers to come up with a solution soon.

“They have a special session, they’re going down there,” he said. “We have to address this issue. We cannot, for the taxpayers and the retirees, run away from it. … We must get this work done, and we have to do it for the fiscal health of our state, the fiscal health of our city, for the peace of mind of our retirees, and for also the peace of mind to our taxpayers.”

As of Tuesday, the governor’s office estimated state’s pension debt – the money the state owes to its five pension funds – was $83 billion. Republicans estimate the pension debt could be as large as $130 billion.

Either way, if it continues to grow, the state’s pension debt will soon have a stranglehold on the entire budget.

House Speaker Mike Madigan might call on the House to vote on a pension reform plan approved by the Senate earlier this year, but that plan only addresses the debt at two of the state’s five pension plans.

Cross has said Republicans cannot support that plan.

“I think most people have said it doesn’t go far enough. It nibbles around the edges, at best,” he said. “If we’re going to do something, we need to do it in a very substantive, comprehensive style.”

But Madigan and the Democrats won’t go any further without including the controversial teacher pension shift.

Cross said, “My approach is to put us in a room, lock the key, and when we’re done you let us out.”

The governor would not say if that’s an option he’s considering.

“I would say that I’m going to take [it] one day at a time. I talk to legislators and their leaders every day, and I just want to take the temperature of everybody. I don’t see why we need to go more than one day,” the governor said.

To those who say nothing will come of Friday’s special session, being held just two-and-a-half months before an election, the governor said, “The credit agencies, the people who buy our bonds, they want action now and they don’t have an election calendar.”

Quinn said, for each day the state doesn’t deal with the problem, it racks up another $12.6 million in pension debt.

“I felt it was imperative for the Senate and the House – both in our legislature – to come together, roll up their sleeves, and be there to solve this problem,” the governor said.

However, for any pension reform plan to take effect immediately, lawmakers would need a three-fifths majority vote in both chambers – something that is highly unlikely, given they have been unable to come up with a plan that even a simple majority of lawmakers can agree on so far.

The governor acknowledged there’s still a lot of work to do to achieve pension reform, but said, “we’re not at the foot of Mt. Everest. We’re maybe about halfway up.”

Quinn wouldn’t say what he’ll do if lawmakers fail to pass a pension reform plan on Friday, but he’s clearly concerned that bond rating agencies will downgrade the state’s bond rating if the General Assembly leaves Springfield without making any progress.