SPRINGFIELD — In a private bill-signing ceremony, Gov. Pat Quinn Thursday quietly enacted a newly passed, $160 billion pension-reform package in a move certain to launch a lengthy round of litigation from labor unions challenging its constitutionality.
Quinn’s office announced his move in a prepared statement and without any of the fanfare that accompanied his signing last month of legislation legalizing same-sex marriages – an event staged at the UIC Forum before hundreds of gay and lesbian activists and with Quinn handing out dozens of ceremonial pens to mark the occasion.
“Illinois is moving forward,” Quinn said. “This is a serious solution to address the most dire fiscal challenge of our time.”
The muted way the governor enacted the pension bill undoubtedly is rooted in the political realities of his tenuous 2014 re-election bid, where he needs to make peace with the same public-employee labor unions whom he outraged with his stroke of the pen Thursday.
The bloc of labor unions that fought Senate Bill 1 reacted bitterly to the governor’s move and vowed to wage a legal fight all the way to the Illinois Supreme Court to test protections in the state Constitution that bar public pensions from being “diminished or impaired” and grant public pensions the same legal safeguards as a contract.
“It’s a very disappointing day,” said Dan Montgomery, president of the Illinois Federation of Teachers. “The governor likes to say: ‘Let the will of the people be the law of the land.’ We like to say that the Illinois Constitution is the law of the land.”
The We Are One Illinois coalition, of which IFT is a part, called the law “attempted pension theft.”
“Gov. Pat Quinn has given hundreds of thousands of working and retired teachers, nurses, police, caregivers, first responders, and others no alternative but to seek justice for retirement security through the judicial system. Contrary to his belief, every Illinois citizen loses today,” the group said in its statement.
“It didn’t have to be this way. Bipartisan majorities in both chambers could have passed a much fairer, legal, negotiated solution – with real, substantial savings – in Senate Bill 2404,” the labor-drafted bill that passed the Senate but was killed in the House.
“Instead, leading politicians and their followers chose to violate their oaths of office, trample on the Illinois Constitution, and willfully ignore the plain letter of the law. In abandoning their constitutional duties, they’ve voted to slash the retirement benefits of senior citizens and working families by one-third or more.
“Senate Bill 1 is attempted pension theft, and it’s illegal. Once overturned, its purported savings will evaporate, and the state’s finances and pension systems will be left in worse shape,” the union coalition said.
The governor’s statement announcing his action Thursday included prepared remarks from all four legislative leaders, who agreed to the deal last week on the day before Thanksgiving and muscled it through both chambers of the General Assembly on Tuesday.
But it was House Speaker Michael Madigan, D-Chicago, who took the lion’s share of credit for getting the bill to Quinn.
“The bill would not have passed without me,” Madigan said in the statement distributed by the governor’s office. “I was convinced that standing fast for substantial savings, clear intent and an end to unaffordable annual raises would result in a sound plan that will meet all constitutional challenges.”
The new law, which takes effect on June 1, scales back annual, compounding 3-percent cost-of-living increases for retirees and hikes the retirement age by as much as five years but reduces by 1 percentage point the amount that active employees must withhold from their paychecks for pensions.
The plan — which applies to active and retired state workers, university employees, downstate and suburban teachers and statewide officeholders and lawmakers, but not judges — will lower annual state pension payments by as much as $1.2 billion and have four of the state’s five retirement systems fully funded within three decades.
In his statement, Quinn laid out an example of how the changes would reduce what retirees would get.
As an example, the governor cited a 65-year-old retired state conservation worker with 20 years of service receiving a $17,000 state pension. Before the changes, that annuity would have grown to $22,400 in a decade; under the new law, the retiree’s pension would grow to $22,000 after 10 years.