Pension Bill On Hold Despite Rauner, Cullerton Agreement
CHICAGO (AP) -- Democrats are unlikely to address Illinois' worst-in-the-nation pension crisis until the state has a budget, despite a rare agreement between Republican Gov. Bruce Rauner and Senate President John Cullerton and calls from the governor to send him a bill "right away."
Rauner announced last month that he's backing a Cullerton plan to give workers a choice in retirement benefits as a way to chip away at Illinois' $111 billion unfunded pension liability. He struck an optimistic tone in last week's State of the State speech, calling it one of the most critical steps lawmakers can take to save taxpayers money.
But Cullerton, a Chicago Democrat, says it will be even tougher than usual to pass pension legislation this year because of upcoming elections, opposition from labor unions, an Illinois Supreme Court ruling that declared a previous law unconstitutional and the ongoing state budget saga. A pension bill could be part of a broader deal between Rauner and majority Democrats on a budget and other issues, he said — a process that's likely to take several months, if not longer.
"With the union opposition and without 100 percent of Republicans on board, it's going to be difficult," Cullerton said. "Just like everything else this year, people want to know what the big picture is."
Rauner's office said Monday that "there should be no good policy reason to delay moving the bill" once it's drafted, noting the governor has agreed to use language written by Cullerton's staff.
"Failure to act swiftly on pension reform could be a signal the legislature is putting politics ahead of good policy, so we expect both Chambers to act on it right away," Rauner deputy chief of staff Mike Schrimpf said in an emailed statement.
Cullerton called Rauner's support "very important," but said it's not as simple as the governor seems to think.
"Passing a bill is something I've had more experience at that than he has," he said.
Illinois is providing only about 40 percent of what's needed to pay pension benefits, due largely to lawmakers who for years skipped making the state's contributions. As a result, its annual payments have ballooned to about $7 billion — roughly one-fifth of Illinois' general funds budget.
Lawmakers approved legislation in 2013 that cut pension benefits, but unions sued, saying the Illinois Constitution prohibits retirement benefits from being reduced. In May, the Illinois Supreme Court agreed.
AFL-CIO President Michael Carrigan, a spokesman for a coalition of unions that's led the fight to protect pensions, said they believe Cullerton's plan also is unconstitutional.
He said the unions are willing to discuss other options, but "the phone hasn't rung in a long, long time."
"Our (public employees) worked long and hard to battle for their pension benefits, and there is no appetite to sit down and discuss legislation that's going to diminish those benefits," Carrigan said, adding that getting a budget is unions' top priority.
Cullerton said he believes his approach is constitutional and he plans to sit down with union officials to discuss both the "legal side" and the "political side." He also will present the legislation to Democratic House Speaker Michael Madigan once it's drafted.
Schrimpf said Cullerton's attorneys are expected to send their legislative language to Rauner's office by the middle of this week.
Rauner and majority Democrats have been at odds over how to close a roughly $5 billion budget deficit, leaving Illinois without a spending plan for the fiscal year that started July 1 and causing deep cuts to social services and other programs. Rauner wants pro-business changes before he will sign off on a tax increase, but Democrats say his agenda would hurt the middle class.
Cullerton said he's hopeful a budget deal could be reached by May, adding he doesn't think the stalemate will last through the November elections.
"I hope not," he said. "I can't imagine it."
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