Will Mike Madigan get his way and pass pension reform in Springfield?

Will Mike Madigan get his way and pass pension reform in Springfield?

You thought last weekend was hot in Chicago? Last weekend’s heat shifted downstate to Springfield, where a classic Mike Madigan powerplay is underway.

One problem is that Mike Madigan’s proposal is the only solution as it doesn’t appear there is an alternative to Madigan’s plan on the critically underfunded Illinois public employee pension system.

The deal brokered by Mike Madigan, initially suggested by Governor Pat Quinn, will give current and future state pensioners a choice: either give up their post retirement cost of living increases of 3% or give up their state subsidized health care coverage. The proposal would also shift teacher pension costs from the state to downstate and suburban school boards.

Illinois Republicans have a huge problem with the proposed legislation because it would force downstate and suburban school districts to pay pension obligations for their teachers (currently, the state is supposed to pay these obligations). Republicans are livid over this option because to pay for the increased pension obligations, downstate and suburban cities would be forced to increase property taxes. Those districts unable to raise taxes would be forced to cut services.

However, the plan will save Illinois an estimated $115 billion over 30 years which would, by itself, right Illinois pension mess. Illinois underfunded public employee pension systems is the worst in the nation. Appropriately, House Republicans spent some of yesterday laying blame for the current fiscal mess at Mike Madigan’s feet. House Minority leader Tom Cross said:

Maybe you need to take responsibility, Mr. Speaker, for your actions because think about this, Mr. Speaker: For the last 40 years, you have had your fingerprints on the mess we have today. Not making pension payments? Go find Rod Blagojevich and ask him what it was like a few years ago when he and Speaker Madigan decided not to make a pension payment.

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It became clear over the last couple of days that he was going to go down a route that reminded me of the old days of Mike Madigan. No more collaboration, no more bipartisanship. But, this will be my way, and if you don’t like it, too bad.

Mike Madigan coolly responded: "I don’t plan to issue any threats. I don’t plan to issue any kind of statements which are designed to be derogatory toward anybody," Madigan said. "So I would simply ask everyone, let’s not get swept up in the emotion of the minute. Let’s keep our focus. Move toward good solid decisions as to how we can solve these problems."

The heat was ratcheted up another level when another Republican went on a profanity-laced tirade against Madigan from the House floor.

"You should be ashamed of yourselves!" Rep. Michael Bost (R-Murphysboro) screamed at House Democrats. "I’m sick of it! Every year! We give power to one person! It was not made that way in the Constitution!"

Dan Montgomery, president of the Illinois Federation of Teachers found himself in bed with House Republicans: "There’s no free choice here, but a coercive dilemma where a public servant must choose between harm on the one hand or more harm on the other," he said against the bill Tuesday morning.

The harm Dan Montgomery fails to consider is the status quo, which we can’t afford. The status quo has our state pension system underfunded by $83 billion. Unfortunately, it’s time for public employees to feel the pinch that the private sector has felt for some time. Private sector individuals, reliant on 401(k)’s do not see "cost of living" increases. We collectively saw our 401(k) and IRAs cut 40% in 2008– which changed all of our retirement dates. I didn’t hear Dan Montgomery complaining about me having to work an additional six years to make up for that loss.

So we’ll see if Mike Madigan can coerce the democratic votes he needs to pass the bill. This year, all House and Senate seats are up for reelection and a vote– by a Democrat or Republican– effectively raising property taxes could prove unpalatable to suburban rank and file.

How broken is Springfield? We’ll find out over the next two days. This showdown again paints a bad picture of our state’s finances considering the increased revenues the Governor has had to work with– in terms of last year’s income tax increase and the recent $1 hike on cigarettes (roughly half of the cost of a pack of cigarettes in Chicago are for various taxes). Stay tuned to see what, if anything, gets done. The General Assembly is scheduled to leave Springfield after Thursday’s session.

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  • I inappropriately inferred the Madigan and Quinn plans were one and the same and they are not. Today's Chicago Tribune editorial page points out the key differences while backing Quinn's plan.

    Find that editorial here: http://www.chicagotribune.com/news/opinion/editorials/ct-edit-pension-20120530,0,5129194.story

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    One problem is that Mike Madigan’s proposal is the only solution as it doesn’t appear there is an alternative to Madigan’s plan on the critically underfunded Illinois public employee pension system. WRONG: Chris Lauzen has a much better plan the legislators have chosen to ignore: http://www.forbes.com/sites/ralphbenko/2012/06/11/the-lauzen-plan-how-to-rein-in-a-3-trillion-rogue-pension-elephant/2/

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