A good summary of where we are and the different arguments as to how we got there below. SB 512, the bill to
force current teachers and other public employees to select one of three bad choices determining their future
pension benefits, will be heard in the House Pension Committee on Wednesday, May 22, at 2:00pm. Mike
Madigan will tell his suburban House Democrats to vote for this bill or against it based on what they believe will best
ensure their reelection. If they hear from current and retired teachers that this bill is important to us and we think
that it is wrong, the bill should not pass. I intend to be there to keep score. Representatives Karen May and Elaine
Nekritz, both North Shore suburban Democrats, are on the committee. They need to know where we stand. Both of
these Representative should support us. Remember If the General Assembly can do this to active teachers, and if it
would be found constitutional, they can do it to us next. Bob Lyons
255 South Stratton Office Building
Springfield, IL 62706
427 Sheridan Road
Highwood, IL 60040
256 West Stratton Office Building
Springfield, IL 62706
24 South Des Plaines River Road, Suite 400
Des Plaines, IL 60016
A good summary of where we are and the different arguments as to how we got there. SB 512 the bill to force
current teachers and other public employees to select one of three bad choices determining their future pension
benefits will be heard in the House pension committee on Wednesday, May 22, at 2:00pm. Mike Madigan will tell
his suburban House Democrats to vote for this bill or against it based on what they believe will best ensure their
reelection. If they hear from retired teachers that this bill is important to us and we think that it is wrong, the bill
should not pass. I intend to be there to keep score. Representatives Karen May and Elaine Nekritz, both North
Shore suburban Democrats are on the committee. They need to know where we stand. Bob Lyons
Taking a Page from the Republican Playbook
Illinois state Democrats rumble with the unions over benefits
By Tim Jones
The quest to control public worker benefits and wages has been defined this year by high-profile
clashes over collective bargaining rights in Republican-dominated Wisconsin and Ohio. Now, in
Illinois, it's the Democrats who find themselves playing the heavy when it comes to reducing the
state's pension burden. Public sector unions, the party's traditional allies, have returned fire with a
million-dollar ad campaign. Meanwhile, Democrats in states such as Connecticut and Massachusetts
are pushing for similar concessions.
In Illinois, where pensions have been underfunded for decades, Democratic House Speaker Michael
J. Madigan says it's time to consider cutting benefits. Senate President John Cullerton, also a
Democrat, is backing a bill to make retirees pay a bigger share of premiums for health care and to
force school districts to shoulder more of the teacher-retirement costs. Republican Governor Pat
Quinn has said that he would prefer negotiating with unions to win concessions, but has not
threatened to veto legislation to cut benefits. Lawmakers may act before the legislative session ends
on May 31. "We paid our share for the pension, and the politicians did not put in their fair share," says
Kathy Reno, 55, a certified nurse's aide at the state-run LaSalle Veterans Home, who makes about
$38,000 a year. "Why should we be punished for something they didn't do?"
To fight the proposed changes, a coalition of public and private labor groups called We Are One
Illinois has launched a $1 million ad campaign. "All I have is the pension I paid for," says one voice in
a 30-second spot featuring a firefighter, teacher, and police officer. "But the politicians broke their
promise, failed to make payments. And now they want to punish me for their mess?"
The union counteroffensive follows a series of radio spots paid for by a Chicago-based business
group called the Illinois Is Broke Campaign. "Right now, 95 percent pay higher taxes so 5 percent—
bureaucrats and other public workers—can retire at 55," one ad asserts. "Sweet deal for them. Raw
deal for us."
The Illinois pension system is the least financially sound in the country, with a funded ratio of about
51 percent, according to data compiled by Bloomberg. (Oklahoma and Kentucky are next on the list).
The state's unfunded pension liability is at least $80 billion. There is also a $40 billion long-term
obligation for retired public employee's health care, according to a report from the Pew Center on the
States. Illinois spent $473 million annually on retiree health care last year, while the retirees
themselves paid about $12 million, according to the Healthcare & Family Services Dept.
The state is projected to close the current fiscal year ending on June 30 with $8 billion in unpaid bills.
A 67 percent increase in the state income tax, approved in January, will raise $6 billion annually,
Madigan said in a Mar. 29 speech in Springfield. That's "the exact amount of money that the
legislature will be required to pay over to the five state pension systems in the next budget," he said.
House Republican Leader Tom Cross is sponsoring a bill that would require a higher employee
retirement contribution and let workers enter a self-managed retirement plan. He expects a vote
before the end of the month. "People who are currently in the system are not putting in enough to
justify or support the benefit they are getting," says Cross. "I don't see it as a reduction at all. I see
this as an adjustment to put you on par with the benefits you are going to get."
Illinois's politicians biggest obstacle in their quest to control costs may be the state's constitution,
which says benefits "shall not be diminished or impaired." Public workers in Colorado, South Dakota,
and Minnesota are suing their states, which are among 18 that want to increase employee
contributions, raise the retirement age, or curb cost-of-living increases. "There's a core fairness
question here," says Anders Lindall, spokesman for the American Federation of State, County &
Municipal Employees in Illinois.
The bottom line: Democratic legislators in Illinois want to tackle the state's $8 billion budget gap even
if it means alienating labor unions.
Jones is a reporter for Bloomberg Magazine