Public employee pension reform dominated the agenda when the Senate and House of Representatives returned to Springfield June 19 for a special session. But with no agreed-upon plan, the special session was anticlimactic, dealing only with the procedural requirements needed to create a “conference committee” designed to move negotiations to the next step.
Governor Pat Quinn, who called the special session, was criticized by members of both parties for having no clear plan and for failing to take an active role in trying to sway members to support reforms he says he favors.
At the close of the day, Governor Quinn issued a new pronouncement setting a “deadline” for legislative action by July 9. It was not clear what the Governor intended to do if the deadline is not met. Legislative leaders had already said they hoped to have an agreement by then.
The bipartisan conference committee will be charged with crafting a plan that could pass muster with a majority of lawmakers. The conference committee process is not well-known and has not been utilized in several years. It was established to facilitate negotiations between Senate and House lawmakers when the two chambers cannot agree on legislation.
Conference committees are composed of 10 appointees designated by each of the four legislative leaders: the Senate President and House Speaker each appointed three members, while leaders of minority caucuses each appointed two. Conference committee members are anticipated to meet both privately and publicly to iron out differences and come to an agreement, which will be filed and presented to lawmakers in both chambers in a conference committee report. I asked to serve on the committee, but was told I am too “independent.”
Lawmakers plan to return in early July to consider the product of the Conference committee’s meetings. If the effective date of the report is immediate, then the measure will require a 3/5th vote for passage. If the effective date is changed to June 1, 2014, a simple majority vote would be required.
If the conference committee cannot reach agreement or the report is defeated by roll-call vote, a second conference committee can be created. If the second fails to develop a proposal that passes muster with lawmakers, the bill is declared lost. However, it is also possible for the committee to submit “corrected” reports, which contain new changes and have the practical effect of giving lawmakers more than two opportunities to reach a consensus.
On June 17, I joined the Illinois Policy Institute at a press conference to present a pension reform plan that is constitutional, would immediately cut Illinois' $100 billion unfunded pension liability by nearly half, and would protect the benefits earned to date by current government workers.
Here are some highlights of the pension reform bill I sponsored with Representatives Tom Morrison and Jeanne Ives:
* Saves Illinois more than $221 billion over the next 30 years;
* Is constitutional because it banks and protects the benefits that government workers have earned to date;
* Ends the repayment ramp, and establishes a flat-rate payment schedule to retire Illinois’ pension debt and pay off benefits earned to date by current workers and retirees;
* Going forward, current and future government workers would earn retirement benefits in a self-managed, 401(k)-style system. They would receive a generous 7 percent employer match every single paycheck after they contribute 8 percent (most workers currently contribute 9 percent);
* Does not affect current retirees but protects and pays what they have earned.
To prevent Illinois from going down the path that has led many companies to file for bankruptcy, Illinois must end its dependence on the defined benefit pension system and follow the lead of the private sector, by converting its retirement system to 401(k)-style plans. This is the only way Illinois will be able to end its pension crisis and begin to make way for the economic growth our state needs.
This plan was developed by the Illinois Policy Institute, a nonpartisan research and education organization. At its core, this plan calls for expanding a retirement plan that already exists today in Illinois for university and community college workers, and has more than 17,000 voluntary participants.
Earlier in the week, the Governor signed legislation I cosponsored that allows the state to adopt regulations affecting hydraulic fracturing, frequently known as “fracking.” Senate Bill 1715 was the product of extensive negotiations between environmental groups and industry representatives, and defines how Illinois will regulate and monitor this practice.
Hydraulic fracturing forces pressurized water, sand and other materials underground to expand fissures in rock layers that trap natural gas or oil. This allows the gas or oil to escape to the surface, where it can be recovered. Though environmental groups initially raised concerns about the impact hydraulic fracturing could have on Illinois’ natural resources, the regulations in Senate Bill 1715 are considered to be a model for the nation in balancing environmental concerns with the significant opportunities for jobs that the process offers.
It has been estimated that hydraulic fracturing could create as many as 40,000 jobs in Illinois, many in southern Illinois and other job-starved areas of the state. The economic development opportunities and growth associated with fracking will also expand to other regions of Illinois, as the industry will rely on resources, material and transportation from all corners of the state.
Governor Quinn also signed Senate Bill 2155, which amends the definition of “new property” in the Property Tax Extension Limitation Law, to include an increase in the assessed value of property due to oil or gas production for a well used for fracking and which was not produced in or accounted for during the previous levy year.