Illinois Legislature fails to reach pension deal

Associated Press

SPRINGFIELD, Ill. (AP) — The nation's worst pension crisis remained unsolved Friday as Illinois lawmakers wrapped up their spring session having failed again to fix a nearly $100 billion retirement fund shortfall, increasing the pressure on the state's already precarious financial situation.

The Democrat-controlled House and Senate adjourned without agreeing on how to reconcile differing stances on a solution, years after other states have dealt with similar crises. Gov. Pat Quinn and legislative leaders had said that addressing the problem was their top priority in the 2013 session.

The effort fizzled late Friday after an aide to Senate President John Cullerton said the Senate wouldn't take up any more pension issues, leaving it up to the House to pass reform before the session's midnight deadline. About an hour later, the House adjourned without taking action.

Quinn, who had claimed he was "put on earth" to solve the issue, said afterward he would call legislative leaders together next week to try again to come up with an agreement. But he already was putting pressure on lawmakers to act.

"I will not stop fighting until pension reform is the law of the land," said the Chicago Democrat. "But ... I cannot act alone."

Both Cullerton and House Speaker Michael Madigan also pledged to continue working, despite a stubborn standoff over the issue in recent weeks.

"I don't think we should take a lack of success today as a reason to give up," Madigan said.

But Republican Sen. Matt Murphy ripped Democrats, who have veto-proof majorities in both chambers. He said their inability to work a deal despite their legislative strength was a "stunning indictment of your failure of leadership."

"Your failure to deliver on the biggest issue facing this state is shameful, and I hope the people of this state are paying attention," Murphy said.

The failure of pension-reform efforts came amid a flurry of activity as the session approached its finale Friday with half a dozen important issues still on the table. A measure to legalize same-sex marriage also fell short after sponsors didn't have enough support to call it for a House vote Friday.

The Legislature did send to Quinn a new $35.4 billion general revenue fund budget that avoids cuts to education for the first time in several years. They also approved a measure allowing the concealed carry of weapons in Illinois.

Leaving town without a resolution on the massive public retirement system crisis means soaring pension payments will continue to squeeze Illinois' budget. The inaction also could prompt credit rating agencies to further downgrade the state's credit rating, which already is the lowest of any state in the U.S.

The failure also could pose political problems for Quinn as he eyes a re-election bid.

Illinois' five public employee retirement systems are about $97 billion short of what's needed to pay benefits as currently promised, largely because lawmakers skipped or shorted their payments for years. The full annual payment in 2014 will be about $6 billion — nearly one-fifth of the state's general revenue fund.

If the Legislature doesn't take action by 2016, the governor's office estimates the state's pension payment will be larger than the amount spent on education.

This year's failure came down to a difference of opinion between Madigan and Cullerton, both Chicago Democrats, on how best to address the problem. Madigan wanted a comprehensive pension bill that cut benefits across the board. Cullerton favored giving employees and retirees a choice in benefits — an approach he said was the only one that would survive a court challenge.

Public employee unions, which threatened to sue if Madigan's bill passed, lobbied hard for Cullerton's approach, saying they wanted a deal that would uphold the state's promises to workers and retirees and stabilize the pension system.

The Senate acted first, approving in committee in March legislation sponsored by Cullerton that included both approaches: one as the primary legislation, the other as a "backup" in case the Illinois Supreme Court deemed the first unconstitutional. But the business community and other critics lobbied against the bill, saying it didn't save enough money. Despite a few changes, the legislation arrived in the House with little chance of being passed.

In late April, Madigan announced he was stripping Cullerton's language and replacing it with his own comprehensive bill. The measure cut cost-of-living increases, raised the retirement age and required employees to pay more toward their own retirement. Madigan and other supporters said it would save the state more money than Cullerton's plan. But unions said it violated a provision of the state constitution that says pension benefits cannot be diminished.

Shortly after the House passed Madigan's bill in early May, the Senate approved a separate, union-backed measure that Cullerton sponsored. It gave workers and retirees a choice in pension benefits.

Cullerton called Madigan's bill for a Senate vote late Thursday, where it failed. Cullerton said he knew the support wasn't there, but thought Madigan's legislation deserved a vote.

"I wish he'd do the same for me," Cullerton told The Associated Press.

That was wishful thinking: The vote never came, and the House adjourned.

To take up the issue again, either Madigan and Cullerton or Quinn could call for a special legislative session to take up the issue.

But brokering a deal could be more difficult during a special session because it would take a three-fifths majority to pass legislation, rather than a simple majority.

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