We covered the background of Illinois' budget- and state economy-crushing pension crisis in our last post, but with the Illinois General Assembly scheduled to adjourn at the end of Friday, things are changing quickly.
On Tuesday, the two main House proponents of House Speaker Michael Madigan's pension reform bill presented new numbers that make it an even better solution. Reps. Darlene Senger and Elaine Nekritz (suburban Republican and Democrat, respectively) said it's all the more evidence why the Madigan bill is best for the state.
The big number is $187 billion. That's how much less taxpayers will have to spend on public employee pensions through 2045. Originally, Madigan said his bill would save $150 billion. But a a study by actuaries last week placed that figure far higher. That's almost an extra $1 billion a year, which is extremely significant. (For comparison, the state budget this year may contain $400 million in cuts to education spending to cover pension costs.)
But it's even more significant when measured against the estimated $46 billion total that the competing bill -- favored by public employee unions and Senate President John Cullerton -- will save over 30 years.
Another number of significance: $20 billion. That's the amount the Madigan bill will cut from the nearly $100 billion in pension debt the state already has accrued. That number is down from the original estimate of $27 billion. The Cullerton bill, however, will trim only $6 billion.
But there's another angle that needs to be considered. The Cullerton bill's numbers change depending on what options employees and retirees choose to take. They could be significantly less if employees all opt to keep their annually compounded 3 percent cost of living adjustments, rather than trading them for state-provided health insurance.
"These numbers are flexible," Nekritz said Tuesday at a press conference in Springfield. "But whatever number you look at (the Cullerton/union bill) is always one-third of this bill."
There's been a stalemate in the Capitol over these two bills for more than a month now. The Senate has passed Cullerton's bill, the House has passed Madigan's bill. No matter which bill passes, there will be a lawsuit accusing it of violating the state constitution's protection of pension benefits. Both sides say they can make their bill hold up in court.
But with the difference in long-term taxpayer savings now pegged at $187 billion vs. (optimistically) $46 billion, and with the state mired in a fiscal abyss, it just got a lot harder for supporters of the Cullerton bill to defend it using math.
That's where the politics of all this comes in. Here's the union response to the Nekritz/Senger report. (SB 1 is the Madigan bill; SB 2404 is the union/Cullerton plan):
"It does not matter how much backers of Senate Bill 1 claim their bill saves. This latest, desperate attempt to trump up SB 1's savings does not change the basic truth around the bill.
"First, the savings are a fiction. SB 1 is unconstitutional and will save absolutely nothing when overturned by the courts. If SB 1 passes, the state's futile waste of time and resources will cost Illinois far more.
"Second, SB 1 illegally attempts to saddle half the state's pension debt onto public workers and retirees. It unfairly punishes those who played by the rules and contributed to their pensions from every paycheck.
"Third, the core of SB 1 has already failed the Senate. It does not have the support to become law -- nor should it.
"Members of the House should focus on a real solution and pass SB 2404 without change this week. It contains substantial savings that will actually materialize. It achieves those savings legally and responsibly compared to other approaches. And it received strong support in the Senate and would likely receive similar support in the House."
Not a lot of potential for compromise between those lines.
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