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Political Rewind: All Quiet in Springfield a Week after Pension Reform Fails

As we start a new week, it's always good to get caught up on state politics. Here's an easy guide to what happened last week.

Editor's Note: This article was created by aggregating news articles from Illinois Watchdog, formerly Illinois Statehouse News.

IL: Week in Review — All quiet in Springfield a week after pension reform fails

SPRINGFIELD — Things were mostly quiet here a week after lawmakers failed to reach an agreement on comprehensive pension reform during a special legislative session.

Rutherford: Pension inaction could have ‘very serious impact’ by year end

State Treasurer Dan Rutherford sounded the alarm on Illinois’ financial crisis Friday, after a Moody’s report said lawmakers’ inaction on pension reform continues to be an issue for the state’s credit rating.

“I know we keep hearing these things about potential downgrades … but the fact is it is now to the point that (the credit rating agencies) are repeatedly saying this. The inaction on Friday helped substantiate the fact that these entities are very, very serious about this,” Rutherford said.

“I’m not sure that the General Assembly really understands what a downgrade could mean. I’m relatively sure the general public probably doesn’t deep down understand what it means.”

Moody’s lowered the state’s general obligation bond rating to A2 in January because of the state’s failure to address pension underfunding and delays in paying its bills. Downgrades affect the interest rate at which Illinois can borrow money.

In a report Friday about the state’s plan to issue $50 million in general obligation bonds in September, Moody’s said its “stable” outlook for Illinois acknowledges the state’s ability to reach consensus on a temporary tax increase in 2011.

However, Moody’s said, “it remains to be seen whether the state has the political will to impose new pension reforms and other measures that restore fiscal strength in the near term.”

Gov. Pat Quinn has warned that the state’s credit rating could be downgraded further, if lawmakers can’t address Illinois’ unfunded pension liability, which is believed to be $83 billion but could be $130 billion or more under new accounting guidelines.

Rutherford said he believes that if lawmakers don’t approve pension reform at least by the end of the fall veto session, “that it very well could have a very serious impact by the end of the calendar year.”

“The problem with this is it isn’t seen as serious. It doesn’t affect today. If there’s a downgrade and it costs the taxpayers of Illinois more money to go into capital bonding, in a sense I think the attitude is, ‘OK. So what?’” he said.

“Well, here’s the ‘so what:’ It will cost the taxpayers of tomorrow even more money. It’s the generation that’s coming next. And the stewards of today’s government need to be responsible for that.”

Class-action status sought on state retiree lawsuit

A group of state employees is seeking class-action status for a lawsuit it filed last week against the state of Illinois, alleging a new law that changes health-care premiums for retirees violates the Illinois Constitution.

The lawsuit was filed Aug. 14 in Randolph County Circuit Court in southern Illinois. The 11 plaintiffs are seeking class-action status that would include all state workers and retirees.

The lawsuit challenges Senate Bill 1313, which had bipartisan support in both houses of the Legislature and was signed into law by Quinn in June. The law requires retired state workers, university workers, lawmakers and judges to pay their own premiums for health insurance, and the director of the state’s Central Management Services is charged with establishing a schedule of premiums for retirees.

Previously, the state picked up the tab for the premiums for state and university employees who retired after 1998 and worked for the state for at least 20 years, as well as premiums for those who retired before 1998 and had eight years of service. The retirees had to foot their own deductibles and co-payments.

The lawsuit says the law violates the state constitution and union contracts that are in place.

A similar lawsuit is pending in Sangamon County, where retired Appellate Judge Gordon Maag has asked that the law be declared unconstitutional, as well. He, too, is asking that the lawsuit be given class-action designation.

State GOP continues call for voters to ‘fire’ Madigan

The Illinois Republican Party’s calls for voters to “fire” powerful House Democrat Michael Madigan are heating up ahead of the November election, but whether the campaign will work remains to be seen, one observer says.

“Mike Madigan is a very durable politician. He’s very smart, and people have come at him before and tried to make him an issue and haven’t succeeded,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale.

The Republican Party, which is the minority party in the Legislature, is trying to capitalize on low approval ratings for Madigan and state lawmakers in general to attract votes in November. The GOP may not succeed in gaining control of the Legislature, but it could gain seats.

The key is linking all Democrats to Madigan, a powerful longtime Democratic Chicago lawmaker who is known to most Illinois voters.

“What this is is Republicans in Illinois saying that a vote for a Democrat in the Illinois House is a vote for Mike Madigan. If the Republicans can take control of the House, Madigan is out as speaker,” Yepsen said.

“This is not a new tactic. What’s new here is the environment and the antipathy toward Springfield and the problems that exist. People in Illinois do know who Mike Madigan is. Maybe this is the year (the tactic) works.”

The state Republican Party repeatedly has painted Madigan as a leprechaun, a reference to his stature and heritage, who “stole Illinois taxpayers’ pot o’ gold.” Now the party’s leaders are asking the federal government to investigate thousands of dollars in donations from a union to a Madigan-controlled campaign fund leading up to Friday’s do-nothing special legislative session on pension reform. It was quid pro quo to kill reform efforts, the GOP charges.

“Mike Madigan might as well hang a ‘for sale’ sign from the dome of the state capitol,” Illinois GOP chairman Pat Brady said in a news release Tuesday. “This clearly does not pass the smell test, and it merits investigation by federal authorities.”

A Madigan spokesman said Republicans have tried to oust the speaker for 25 years unsuccessfully, adding that Republicans killed the pension bill before the House even convened last week.

“They’re not giving anybody a reason to vote for Republicans,” spokesman Steve Brown said. “And that’s the first thing you need to do.”

— Jayette Bolinski

Mark Lukas August 28, 2012 at 04:51 PM
It's not just "some clerk" we are concerned about. It's tens of thousands of State retirees that were promised unreasonable benefits that we can no longer afford. Many of these retirees earned six figure incomes. Their unions voted in politicians that created an unsustainable system to reward them for their votes. Virtually no retiree outside of government gets life time health benefits and the formulas used to set the pensions are far too generous and are filled with loop holes to greatly boost pension payouts.
Joseph O'Shaughnessy August 28, 2012 at 05:11 PM
"Many" of these retirees earned six figure incomes...how many? And if they earned six figure incomes...are you jealous? Are you worried that someone actually made a living? These are Republican talking points, passed along to the ignorant to do exactly what the group ALEC has been doing for years...promote lower taxes and fewer regulations for corporations. Cut a pension...save a billionaire a dollar. Foolish logic. The average person in Wisconsin who had their incomes cut by $4000 a year made $46,000. And you are wrong about retirees and their incomes. There are many large corporations who still retain pension programs. Government employees often get retirement benefits that combine or obviate Social Security or Medicare benefits. It is always the blowhard who "knows" that there are "many" who doesn't really know what is going on. Check who the reps are for ALEC in the state legislature. And then see who is railing against the pensions. Then come back and give us the benefit of your "expertise." By the way, I haven't been union since the days i worked my way through my undergraduate education, but if it weren't for unions, you'd be working a 7-day, 12-hour workweek.
David Equinstein August 29, 2012 at 02:02 PM
Here's a quick way to cut government spending eliminate township government which is duplicated with every surrounding county, city, etc. And cut the salaries of the Forest preserve Commissioners and President. The 6 Part-Time Commissioners from the Forest Preserve District of DuPage County each get paid $53,500 a year plus full-time benefits and a taxpayer subsidized pension for maybe 1,000 hours a year and they just sit there! Not one of the Commissioners has said a word at the meeting about the FBI's investigation. Here is one of the articles http://elmhurst.patch.com/articles/fbi-investigates-dupage-forest-preserve-contracts-a19cbfe2#comments_list about the investigation that the DCFPD President Dewey Pierotti keeps saying (even yelling at citizens on 8/14) that there is no investigation. We need new Commissioners at a pay of maybe $25,000 a year.
Joseph O'Shaughnessy August 29, 2012 at 02:41 PM
I am not necessarily an advocate for cutting people's pay, but there is a difference between payment and corruption....corruption being featherbedding or payoffs. I'm concerned about statements that Pierotti made involving a private meeting with Dan Cronin. Cronin is a close ally of Kirk Dillard and Dillard, from Hinsdale/Oak Brook, is the ALEC representative in the Illinois state senate. If anyone were going to shut down a public facility...one of the truly great public features of the Chicago and Northern Illinois area, it would be ALEC. ALEC's members, like BP Oil and EXXON/MOBIL, Home Depot, and similar International organizations (look up ALEC EXPOSED on the Internet) is paid by them to shut down taxpayer funded things like Forest Preserves to save money in order to cut taxes for corporations. This is just a fact and you can easily look it up. So the fact that there was a meeting between Cronin and Pierotti and no one else, suggests a scenario where Pierotti is told that he will be taken care of by the Republican Party in return for something. Of course that is pure speculation. But if it were true, then why? Well, one huge cost that could be saved in state and county government is the shutting down of the DuPage Forest Preserve. Once you shut it down....the land is up for grabs.
Ernie Knight August 29, 2012 at 03:45 PM
Dan, Illinois exempts from income tax, distributions from qualified retirement plans, not just pensions. If you are retired and drawing from your 401k, that is not taxed. Neither is Social Security. Pension holders are not being given more favored status by the Illinois income tax code.

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