Jonathan Ingram
Director of Health Policy and Pension Reform

On top of the state’s massive pension debt, Illinois taxpayers are saddled with another $54 billion in debt for retiree health benefits. For years, retired state and university workers have paid little or nothing toward the cost of their health insurance premiums. With the annual cost for these benefits rapidly approaching $1 billion and crowding out other core government services, lawmakers gave Gov. Pat Quinn the responsibility to set premiums for retired workers through the emergency rule-making process. Despite the fact that he signed this legislation in June, Quinn has yet to exercise his new authority to set premiums.

We shared our comprehensive plan for reforming retiree health benefits with the Quinn administration earlier this year. Our plan, which Quinn is free to adopt under Public Act 97-0695, would have saved state taxpayers more than $437 million this year alone. Our proposal makes modest changes to ensure the system is both fair and practical by benchmarking health benefits to what government workers in other states receive in retirement.

It’s now December. The fiscal year is nearing the halfway mark. Quinn has already wasted nearly $200 million by refusing to exercise his responsibility under the law. Every day that he fails to act, he wastes another $1.2 million.

So what’s the hold up? The Quinn administration told the Chicago Tribune’s editorial board that they can’t implement the law until they negotiate the changes with the American Federation of State, County and Municipal Employees, or AFSCME. Quinn says that retiree health benefits are a mandatory subject of collective bargaining and so he can’t do what the law requires him to do until he gets the go-ahead from the unions.

That’s an interesting stance to take, given that the U.S. Supreme Court has been very clear that retiree health benefits are not a mandatory subject of collective bargaining. Even if the state has bargained over those benefits in the past, prior negotiations simply cannot make those benefits a mandatory subject. In fact, retirees aren’t even members of the bargaining unit in the first place.

Illinois courts have followed that Supreme Court decision’s line of reasoning for decades, which makes sense because Illinois courts interpret state labor law in conformity with federal labor law. Quinn knows this, because he changed the premiums retirees pay for dental benefits a few years ago. The unions challenged the change but lost in arbitration and in the court system.

So why won’t Quinn act? He has the power to ease the burden on taxpayers.

When is he actually going to use it?

image credit: Illinois Gov. Pat Quinn AP Photo/Kiichiro Sato