We Are One Illinois – Where We Stand We support SB 2404, sponsored by Sen. Cullerton, as adopted by the Senate. It should be called in the House without amendment or change. We oppose SB 1, sponsored by Speaker Madigan. And we oppose HA 1 to SB 2404 which seeks to amend SB 2404 by replacing all of its provisions with the provisions of SB 1. SB 2404 has strong support in the Senate. The bill was passed by a bipartisan supermajority of the Illinois Senate. Forty senators voted to approve SB 2404—more than two-thirds of the chamber. The full House of Representatives should vote on SB 2404 unchanged, as passed by the Senate. The failure of the House to vote on the Cullerton plan is anti-democratic. SB 2404 has strong bipartisan support in the House as in the Senate. We are asking all state representatives to support HB 2404 as adopted by the Senate and to call for a vote on it in the House without any amendments or changes. We are also asking representatives to commit to oppose the provisions of SB 1, no matter what bill they may be in. The Senate has already resoundingly rejected SB 1. But the Governor and the Speaker are insisting on another vote. The Senate should stand firm. We are asking all senators to vote NO on SB 1, the Madigan plan. Public employees and retirees did not cause the pension debt. Illinois teachers, police, nurses, caregivers and other public employees earn modest pensions—just $32,000 a year on average. Almost 80 percent of the state’s public employees and retirees are ineligible for Social Security—including teachers, police, and university employees—meaning their pension is their primary and often sole source of retirement income. And they pay faithfully toward their retirement—as much as 8 to 10 percent from every check. Politicians used the pension funds as a credit card. For decades, lawmakers avoided making tough decisions to raise revenue or cut spending by shorting or even skipping required payments to the retirement systems. They used the money for other priorities instead. SB 2404 ensures politicians can never again take “pension holidays.” The bill provides an ironclad guarantee to prevent future diversion of funds, empowering the retirement systems to sue if future payments are shorted or skipped, and reaching a 90% prefunded level over 30 years. The Madigan plan’s weaker funding language could be circumvented. Public employees are willing to do our part, but not to bear the whole burden. Public employees have always made our pension contributions. Now the Madigan plan—SB 1--is attempting to make us pay the entire cost of the debt that comes from the state’s failure to pay its share. That’s not fair at all. The changes in SB 2404 are much more modest and fair to employees and retirees. In supporting SB 2404, we’re stepping up and offering to once again do our part to solve a serious problem. SB 2404 reduces the state’s retirement liabilities by $32 billion immediately and saves $134 billion over 30 years. The initial savings is $12 billion more than SB 1, achieved in a way that is fair to public employees. It will pay down the pension debt in a reasonable, responsible manner. SB 2404 is much more likely to be found constitutional. It allows workers and retirees to choose among reasonable modifications—and offers “consideration”, including a dedicated revenue stream and ironclad funding guarantee. In contrast, SB 1, the Madigan plan, unilaterally slashes earned benefits, relying on the untested argument that the state could seize emergency police powers to renege on pension contracts. The savings of any bill thrown out by the courts is zero. [ SB 2404 would improve the state’s credit rating. The ratings agencies want pension reform to ease state budget pressures and provide fiscal stability, but have repeatedly cautioned lawmakers about ensuring that pension changes can pass a constitutional test. SB 1, the Madigan plan, undermines the middle-class retirement security of hundreds of thousands of retirees. The unilateral pension reductions in the Madigan plan are drastic. They include changing the compound interest formula for the annual COLA to simple interest and capping the COLA at an extremely low level, as well as increasing retirement ages without regard to the physically- and mentally-demanding professions held by nurses, police, teachers, and corrections officers, among others, and by limiting pensionable salary without regard to the mandatory long hours and difficult jobs of many in public service. SB 1 would cut the pension benefits of the average retiree by more than 30% over his/her retirement years—taking tens of thousands of dollars out of each retiree’s pocket. SB 2404 eases future budget pressures by dedicating revenue to pay down the pension debt. Monies now used to pay debt service on pension obligation bonds would be placed in a new Pension Stabilization Fund once the current bonds are paid off.
Posted on: Mon, 17 Jun 2013 03:56:10 +0000
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