New bi-partisan pension-reform package emerges amid continuing GOP doubts

SPRINGFIELD-A bipartisan coalition of Illinois House members intends to step forward with a new stab at pension reform Wednesday as talks between the legislative leaders and Gov. Pat Quinn on a potential January pension deal appear stalled.

But the prospects of this latest effort appear iffy, at best, since it will continue to contain a controversial provision opposed by the Republican legislative leaders that would make downstate and suburban school districts pick up the state’s tab on educator pensions.

State Rep. Elaine Nekritz (D-Northbrook), a leader on pension issues in the House is spearheading the latest effort, is being joined by a group of lakefront Democrats and two Republicans – state Rep. Chris Nybo (R-Elmhurst) and state Rep. David Harris (R-Arlington Heights).

The package aims to reel in automatic, compounding 3-percent cost-of-living adjustments.

A source familiar with the plan said the COLA would apply only to the first $25,000 of annual pension income, easing the financial hit on low-earning retirees but giving those with gold-plated pensions less of an annual bump in pay.

Also, their plan would provide a COLA to those who either were 67 or older or who had been retired from the state payroll for five or more years. No longer could someone retire and expect an immediate 3-percent annual increase in their pensions under this plan.

The proposal does away with language, as Quinn had favored, that would have given retirees the choice of keeping their 3-percent COLAs or state-subsidized health insurance but not both.

It also will contain a provision under which the state would be compelled to pay its share of pension costs into the state retirement systems or open the door to potential legal action. In the past, the state has skipped making pension systems, euphamistically once called “pension holidays.”

But one of the most contentious issues remains in the Nekritz-GOP package: shifting pension costs for suburban and downstate educators to local school systems. Under their plan, there would be an annual .5-percent increase in pension costs to school districts rather than establishing a concrete timeframe of 12 or more years to phase in those costs, as Quinn and others have embraced.

Nekritz would not comment on specifics of the plan that will be presented at a Wednesday press conference. Because the House has cancelled its Thursday session, the plan couldn’t be acted on in the House until January, if then.

The cost shift, as it’s commonly known, is the component that could most easily blow up a pension-reform deal in January. Even though Nybo and Harris support the idea, they appear to remain in the minority among Republicans, who see that shift as a de facto property-tax increase of $20 billion or more on suburban and downstate school systems.

Both Senate President John Cullerton (D-Chicago) and House Speaker Michael Madigan (D-Chicago) have insisted on having bipartisan support on a pension-reform package – and that it include a cost-shift.

But Tuesday, Senate Minority Leader Christine Radogno (R-Lemont) said there has not been any softening within her caucus on the question of shifting pension costs to suburban and downstate school systems, and that a cost-shift is a non-starter for most Republicans.

“The fact of the matter is the proposal on the table isn’t acceptable to us. Period. The end,” she told the Chicago Sun-Times.