Our Weekly Reader for the Week of 6/2/2013

There are two viable pension altering bills in the State Legislature. The Madigan Bill SB1, which has been heavily pushed by the Chicago newspapers and corporate heavyweights, barely passed the State House and was soundly defeated in the State Senate. The Madigan Bill would be crushingly devastating for state workers and retirees, with a crude calculation suggesting that the average victim would lose a quarter million dollars. (The Cullerton Bill SB2404, which was (sadly) written in consultation with some unions, is approximately 1/3 as swindling.) SB2404 easily passed in the Senate and would probably pass the House, but Speaker Madigan has shown no sign of calling it.  SB2404 gives trade-offs between pension and medical coverage, requiring irrevocable choices for the worker but no obligation on the state to subsidize the medical at below-market. It’s really a kind of “personal seat license” which you buy for the privilege of paying whatever you will be told to pay. Gov. Quinn has announced that he will try to meet with Madigan and Cullerton this week. I expect that “Squeezy the Pension Python” will make an appearance. The next legislative session begins in October, though special sessions are always possible. There is no indication that the IGPA plan, supported by State University presidents, ever received any legislative support.

Also, you may have read in the News-Gazette that colleges and universities had agreed to accept the eventual cost of pensions (in return for relief from some rules about procurement). The plan got a lot of publicity and was passed in the House, but was defeated in the Senate 21-33 last Friday, over concerns that these costs would be passed on to the students.

–Bruce Reznick