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Regulation and Compliance > State Regulation

Illinois pension panel’s 1st hearing has familiar testimony

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CHICAGO (AP) — Members of the bipartisan panel charged with drafting a solution to Illinois’ monstrous pension problem began their odyssey Thursday with hours of familiar testimony about the nearly $100 billion crisis and faint hints that compromise might still be possible after repeated stalemates at the state Capitol.

The committee’s members said they were dedicated to finding common ground, but most didn’t seem optimistic that they would meet Gov. Pat Quinn’s July 9 deadline for coming up with a proposal. And they left Thursday’s packed meeting without a clear plan aside from staying in communication and setting a second public hearing for Wednesday.

“What I’m committed to … is to work on a daily basis, communicating with the conference committee members to solve the problem,” said Democratic Sen. Kwame Raoul, the chair of the committee. “I’m not foreign to issues that have reached impasse and working beyond impasse. I’ve done so in the Legislature on multiple issues. And on none of them have I set a firm deadline because I think it’s somewhat irresponsible and setting yourself up for failure.”

The 10-member panel, known as a conference committee, was formed last week, the end result of a special session on pensions as both chambers remained divided with competing plans from House Speaker Michael Madigan and Senate President John Cullerton.

The five senators and five representatives slogged through nearly five hours of testimony Thursday from unions, business groups, Quinn’s budget director and others who again painted gloomy pictures of Illinois’ worst-in-the-nation pension problem and the tough choices in tackling it.

Quinn, who has made pensions his focus for more than a year, scolded group members for taking “their sweet time.” After signing several education funding bills into law, he reiterated his stance Thursday that failure to address the pension problem squeezes out other spending and is costing the state more. The pension problem has also led to the repeated downgrades of the state’s credit rating and Illinois taxpayers have to pay at least $130 million extra in interest payments for a bond sale this week because of it.

“This is an emergency,” Quinn said after the signing. “Just listening to some of these folks on that committee, they’ve spent more time complaining about the deadline than they should in my opinion spend time doing the work of getting pension reform.”

The Chicago Democrat also threatened that any bill that lawmakers send him that’s “piecemeal or insufficient or inadequate” will be vetoed. He said any plan must fully fund the pension system.

Several members of the committee said it was more important to come up with an actuarially sound plan than meet quickly approaching Quinn’s deadline and that they wouldn’t be wedded to either the Cullerton or Madigan plans.

Rep. Elaine Nekritz, a Northbrook Democrat who has been involved in pension talks for years, said the committee was a chance to set a “factual foundation” and if Quinn wanted the group to meet earlier, he should have instructed them to do so.

“I hope we can hear from folks who are willing to help us get beyond that and not retreat back to our respective corners,” she told committee members. “We need to be cognizant of the urgency of that and still change our mindsets, and that’s not easy to do.”

She and others said it was encouraging to see lawmakers on both sides at the same table, at least listening to the issues — something they said might finally lead to a solution after years of inaction. The committee has six Democrats and four Republicans.

State Sen. Matt Murphy, a Palatine Republican, said he thought Quinn’s deadline was reasonable.

Illinois has roughly $98 billion in unfunded pension liability because legislators skipped or shorted payments to state retirement funds for years. While no one disagrees that it’s the state’s most pressing problem, lawmakers adjourned the spring legislative session again last month without a deal, making it the fifth time in a year that they’ve left town without solving the problem.

That dissidence was still evident at Thursday’s hearing with back-and-forth among committee members about their exact mission and how to proceed.

State Sen. Bill Brady, a Republican who announced his gubernatorial bid this week, questioned why the committee didn’t have a concrete plan, but said he didn’t have one either when Raoul asked committee members.

“I’m a little disappointed that we didn’t make more progress,” he said after the hearing.

It was also clear from the testimony how deeply the issue has divided interest groups.

For instance, the We Are One Illinois coalition of unions, backs Cullerton’s bill over Madigan’s plan.

Cullerton’s plan gives workers and retirees a choice in retirement benefits, but was never called for a House floor vote. Unions say that it’ll better survive a court challenge than Madigan’s plan, which unilaterally cuts benefits. Quinn has supported Madigan’s plan.

Steve Kreisberg, a national pension policy director for American Federation of State, County and Municipal Employees, said Cullerton’s legislation “is the compromise bill.”

Others who testified included state Rep. Lou Lang, a Skokie Democrat who reminded lawmakers of his reform plan that includes making the temporary income tax increase permanent to help pay the state portion of employee pension costs.

Associated Press writer Jason Keyser contributed to this report.

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