Madigan Drops Plan to Shift Pension Costs to School Districts

Under pressure from Illinois Republicans and Gov. Pat Quinn, House Speaker Michael Madigan announces he's dropping his proposal to shift teacher pension costs to local school districts.

Illinois House Speaker Michael Madigan (D-Chicago) on Wednesday dropped his controversial proposal to shift the costs of teacher pensions from the state to local school districts, universities and community colleges.

The announcement came after two days of spirited debate over pension reform in both the House and Senate.

The change in direction will be appreciated by Geneva School District 304 officials who expressed concern about the bill at Tuesday's board meeing.

Madigan's plan, which was part of Senate Bill 1673, was widely criticized by Republicans, and threatened to derail other legislation to address the state's massive pension shortfall.

Madigan said he reached the decision after Gov. Pat Quinn asked him to drop the amendment, the Associated Press reports.

“He agrees with the Republicans. He thinks that we ought to remove the issue of the shift of normal cost out of the bill,” Madigan told the House on Wednesday night. “I disagree with the governor, but he is the governor. This is his request.”

Quinn's request was a shift from his previous position. Jerry Stermer, the governor's budget director, told Illinois Statehouse News that "forcing school districts and colleges to pay employees' retirement benefits is the responsible thing to do" since school boards negotiate teachers' pay.

Stermer added that the governor would support anything that could fix the state's unfunded pension liability.

The bill was handed over to House Republican Leader Tom Cross of Oswego, who slammed Madigan on Tuesday, calling his proposal a "poison pill" to kill pension legislation.

Plans to remove Madigan's amendment will be considered by a House Panel on Thursday, the Chicago Tribune reports.

Illinois currently has an $83 billion unfunded pension liability—$44 billion of which is from the Teachers' Retirement System.

With the cost-shift language off the table, lawmakers could vote on a comprehensive pension reform plan before the legislative session ends Thursday night.


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Dwight Swartwood May 31, 2012 at 08:20 PM
There is a lesson here, for sure. Public employee pension and health costs are out of control compared to the private sector, and taxpayer's ability to pay. If this problem was in the private sector, everyone (all current and retired employees) would be expected to "contribute their pint of blood." However, our state's quickly retiring public employees want the new hires and private taxpayers to pay their way. They will not compromise. They want their 80% of their latest salary as a retirement pay, and to retain their annual 3% annual cost of living increases to boot. So what do most of the local and state governments do to cope financially? They contract every service they can. Many of these contract workers are undocumented. This kind of thinking is unproductive and does not build our future well. It's understandable why businesses are extremely reluctant to come to Illinois. The $83 Billion of underfunding does not include the $40 Billion or so of underfunding for state employee health care. So we really have a $120 Billion underfunding problem. A problem that will soon suck up nearly 50% of the entire current state tax revenues. Talk about a hangover!


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