State legislators representing DeKalb County were lukewarm toward the pension reform bill approved Tuesday to fix the state’s $100 billion pension shortfall.
State Rep. Robert Pritchard, R-Hinckley, voted against a bill to reform the state’s pension system. He said the annual cost savings this bill generates has not been earmarked for pension reform, and he believes spending for other programs, such as Medicare, will increase as a result.
“I’m fearful what we’re doing is making it more difficult for cities and colleges to hire people,” he said.
The House voted 62-53 in favor of the plan, while the Senate approved it with a 30-24 vote.
Supporters of the bill said it is critical to repairing the state’s troubled finances but faces an immediate threat of a legal challenge from labor unions. Public employee unions, which oppose the bill, say the legislation is unfair to workers and retirees who for years made faithful contributions to retirement systems but now will see benefits cut because of government mismanagement. They also argue parts of the measure are unconstitutional.
State Sen. Dave Syverson, R-Rockford, who voted for the bill, said the legislation likely faces an uphill constitutional challenge in the courts. While the bill was not what he would have preferred, he said the pension system was heading for insolvency and something had to be done. He said he would have wanted less of a reduction for the cost-of-living adjustments in the legislation.
“We had to vote for something that will assure the pension system will be there for those who worked and been promised a pension,” Syverson said.
State Sen. Tim Bivins, R-Dixon, voted against the bill.
The state’s unfunded pension problem is considered the worst in the nation because lawmakers failed for decades to make the state’s full payments to the funds. The massive unfunded liability has led the major credit rating agencies to downgrade Illinois’ rating to the lowest of any state in the nation. It’s also siphoned money from education, roads and other areas.
Yet for years, lawmakers have been unable to agree on how to fix the problem.
The measure approved Tuesday emerged last week after negotiations by a bipartisan pension conference committee and then meetings of Illinois’ legislative leaders. They say it will save the state $160 billion over 30 years and fully fund the systems by 2044.
State Rep. Tom Demmer, R-Dixon, who voted in favor of the bill, said over the course of the past year lawmakers have voted for several provisions but couldn’t find majority support until the conference committee came up with a plan that had bipartisan support. He said in a statement Tuesday he made a difficult decision to support the legislation as it will provide better certainty and security to public pensions going forward.
“Change is never easy,” he said in a statement. “But the adjustments [in the bill] are essential to create stabilization within our pensions systems to have the reassurance that we will continue to offer good retirement benefits to our teachers and public sector employees.”
The measure would push back the retirement age for workers ages 45 and younger, on a sliding scale. The annual 3 percent cost-of-living increases for retirees would be replaced with a system that only provides the increases on a portion of benefits, based on how many years a beneficiary was in their job. Some workers would have the option of freezing their pension and starting a 401(k)-style defined contribution plan.
Workers will contribute 1 percent less to their own retirement under the plan. Legislative leaders say they included that provision, as well as language that says the retirement systems may sue the state if it doesn’t make its annual payments, in hopes of boosting the measure’s odds of surviving the unions’ anticipated court challenge.
Gov. Pat Quinn and legislative leaders reached out to a number of lawmakers over recent days, urging them to support the bill.
Some Republicans said they opposed the bill because it didn’t cut benefits enough. Other opponents said there wasn’t sufficient time for lawmakers and the public to review it.
“When we have a problem this size, no solution is easy,” Demmer said. “And we needed to make a difficult decision today in the best interest of all people in the state of Illinois.”
• The Associated Press contributed to this report.
How they voted
State Sen. Dave Syverson, R-Rockford
State Rep. Tom Demmer, R-Dixon
State Rep. Robert Pritchard, R-Hinckley
State Sen. Tim Bivins, R-Dixon