Cullerton says Madigan-backed pension plan faces critical ‘problem’Continue reading.
Madigan overhauls Cullerton pension plan
House Speaker Michael Madigan (D-Chicago), pictured here from earlier this month, proposed new pension-reform legislation Tuesday that appears to keep the House and Senate at loggerheads on fixing the state’s pension crisis. (AP Photo/Seth Perlman)
SPRINGFIELD-A new pension package pushed by House Speaker Michael Madigan surfaced Tuesday that scraps a framework favored by Senate President John Cullerton, while downsizing annual pension increases for retired state workers and teachers and dumping a pension-funding hit on suburban and downstate school systems.
Madigan’s revisions to the Senate-passed bill originally backed by Cullerton could be voted on by a House committee Wednesday and leave the House and Senate at odds over how to solve the state’s $96 billion pension crisis while living within the constraints of Illinois’ Constitution.
House Democrats and Republicans went into closed-door session Tuesday afternoon to go over details of Madigan’s retooling of Senate Bill 1, which was described as a “bi-partisan effort” that could be voted on by the full House later this week, a House Democratic source said.
The Madigan plan resembles an earlier package backed by state Rep. Elaine Nekritz (D-Northbrook) and House Minority Leader Tom Cross (R-Oswego) but changes how annual cost-of-living increases would be calculated for retired state workers and teachers.
Now, in retirement, they automatically get 3-percent, compounding increases. Nekritz and Cross had proposed allowing that COLA to apply to no more than $25,000 of a retiree’s annuity.
But Madigan is proposing a slightly more generous approach that would give retirees the lesser of either 3 percent of their annual annuity or a total equal to their numbers of years of service, multiplied by $1,000.
Madigan’s plan also would reduce the ceiling on the maximum amount of pensionable salary at $109,000, down from the $113,700 proposed by Nekritz and Cross.
Madigan left out a plan to make suburban and downstate school districts pick up the state’s tab for paying the pensions of retired teachers and school administrators, which he had identified as a top priority.
But more significantly, the speaker avoided including language favored by Cullerton and the Senate that would make retirees choose between continuing to get state-subsidized health care or the annual, compounding 3-percent COLA, but not both.
Cullerton and his legal staff have maintained that choice is essential for a pension package to withstand a certain legal challenge from public-employee unions. The Illinois Constitution holds that pension benefits for government workers can’t be “diminished or impaired.”