Little movement during Illinois’ first pension committee meeting

by Jane McEnaney On June 27, the Illinois General Assembly’s conference committee on pension reform met for the first time in Chicago. All 10 members of the bipartisan, bicameral committee were present. The committee met for five straight hours, hearing testimony from: Ty Fahner, President, Civic Committee of The Commercial Club of Chicago Jerry Stermer, Acting Director...

by Jane McEnaney

On June 27, the Illinois General Assembly’s conference committee on pension reform met for the first time in Chicago. All 10 members of the bipartisan, bicameral committee were present.

The committee met for five straight hours, hearing testimony from:

• Ty Fahner, President, Civic Committee of The Commercial Club of Chicago
• Jerry Stermer, Acting Director of the Governor’s Office of Management and Budget
• Doug Whitley, President & CEO, Illinois Chamber of Commerce
• Dan Montgomery, President & COO, Illinois Federation of Teachers
• Sean Smoot, Director, We Are One-Illinois labor coalition
• National representative from American Federation of State, County and Municipal Employees
• Dan Long, Executive Director, Commission on Government Forecasting and Accountability
• Dan Hankiewicz, Pension Manager, Commission on Government Forecasting and Accountability
• Linda Brookhart, Executive Director, the State Universities Annuitants Association
• Two state actuaries
• State Rep. Lou Lang, D-Skokie

Representatives testified on behalf of big business, Gov. Pat Quinn’s administration, teachers unions, labor unions, state, county and municipal employee unions, a government-run commission, number crunchers employed by the state, and even the 98th General Assembly. Yet no one was asked to testify before the committee on behalf of the state’s taxpayers.

The committee went back and forth on various legislative provisions of Senate bills 1 and 2404, where the stalemate on pension reform has been stuck for months. Each person who testified before the committee talked about being open to reaching a consensus through compromise, but it was very evident who was partial to House Speaker Mike Madigan’s plan and who was wed to Senate President John Cullerton’s.

The same, tired constitutionality argument was made countless times, with members of the committee admitting that none of them were constitutional scholars or lawyers, and that whatever bill passes will inevitably be sent to court.

Lawmakers also spent a lot of time debating whether or not it was reasonable for Quinn to have imposed his July 9 deadline for the committee to have come up with a proposal that six out of its 10 members agree to. Illogically, so much time was spent discussing whether or not this was viable – before the committee had even tried to determine a solution – that the frustration in the audience was palpable.

The expressed intention of the conference committee was to break up the impasse between the legislative leaders, put forward fresh, new ideas and resolve differences between existing pension reform proposals. In the case of the committee meeting, intentions and expectations did not meet reality. The same arguments for and against each of the two bills were made again and again.

It seems unlikely that the conference committee will consider other reform proposals, which is especially disappointing because in partnership with the Illinois Policy Institute, state Reps. Tom Morrison and Jeanne Ives, and state Sen. Jim Oberweis proposed real pension reform in both theHouse and Senate. This real reform is constitutional, would immediately cut Illinois’ $100 billion unfunded pension liability by nearly half and would protect the benefits earned to date by current government workers. Although this plan will likely not be discussed among the committee, the Institute was excited to see our proposal gain momentum within the General Assembly and among the mainstream media at the press conference we held earlier this month.

The only “new” idea offered on Thursday came from Lang, who was the last person to testify before the committee. Lang reintroduced a bill that he sponsored during the spring legislative session that never saw movement, but proposes to extend 2011’s temporary income tax hike (supposed to sunset from 5 to 3.75 percent in 2014) and apply the money to reducing the state’s massive unfunded liability, which is the worst in the nation. As the Institute has been saying for years, Illinois has a spending problem, not a revenue problem. To so much as suggest collecting even more hard-earned dollars from taxpayers at a time when the state is receiving record revenues is more than out of touch – it’s preposterous.

On his proposal, Lang said:

“if we’re serious about funding whatever reform bill we pass, we must be serious about how we’re going to pay for it … HB 2375 essentially codifies what we are already doing…the 800-pound gorilla in the room is not our pension problem, but the income tax hike. Eventually there’s going to be a vote on what to do with the income tax increase … what a better way to use the income tax increase than as a real solution to a real problem?”

Lang is the first member of the Illinois General Assembly to go on the record as being a promise-breaker. Hopefully, he will be the last. Anything higher than a 3.75 percent flat rate on state income taxes in Illinois is 2014 is a tax hike. The Institute intends to make it a priority that our elected officials don’t think otherwise.

The next meeting of the conference committee on pension reform will be held at 9 a.m. Wednesday, July 3, in Chicago. Be sure to follow the Institute’s Senior Director of Government Affairs, Matt Paprocki, on Twitter for live committee updates @mtpaprocki.