(The following is continuation of yesterday’s post about how the Illinois House’s vote on the pension reform bill went down.)
Mr. Turner (Rep. Arthur Turner, D-9th District) PRESIDING.
The afternoon session opened with House Speaker Michael Madigan (D-22nd District) speaking from his floor seat. Mr. Madigan stood at his place centrally located amidst the Democratic side of the aisle and spoke slowly and forcefully without hesitation in a loud, clear, and emphatic tone, using a prepared statement as his guide. He was careful to clearly describe the several points of the pension reforms in their final form for vote. His staff assistant (and counsel) stood near him across the table and he frequently referred to her when needed, sometimes speaking to her and sometimes looking into her face as for confirmation. This was done without detracting from the tone or force of his comments. The entire room was totally quiet during the several minutes in which Mr. Madigan spoke.
Following his remarks several members were recognized for question and comment, as follows. (Note: The discussion lasted about three hours and I left the room briefly for a few minutes, so I am sure I missed at least one speaker during the proceedings, but the account below represents the jist of the session.)
Rep. Patrick J. Verschoore (D-72nd District) asked, Why does this bill deliver $160 Billion in changes to the costs of pension funding, if projections show that we only need $100 Billion to solve the underfunding problem?
Mr. Madigan waffled. Basically, he insisted that the final form of the bill was the result of extended negotiation process with the four leaders (meaning the Democratic and Republican leadership of both houses). The amount of money described as $160 Billion was figured over the course of 30 years and is the best estimate of the returns that should result from the requested reforms. The immediate relief would be much less but substantial enough to put Illinois on a firm foundation and allow the General Assembly leeway in appropriating funds over the coming years, instead of having their hands tied by the costs of pension funding consuming the lion’s share of available money.
Rep. Elaine Nekirtz (D-57th District) said that she considers the outcome just great. She thanked everyone involved in the negotiations that led to the final form and said Mr. Madigan deserves special thanks for his hard work and determination to see the process through.
Rep. Jeanne M. Ives (R-42nd District) said she thinks the plan isn’t even enough savings to support.
Rep. Ron Sandack (R-81st District) indicated that he thinks it’s a good compromise bill.
Rep. Mike Fortner (R-49th District) questioned the validity of the “consideration” that Mr. Madigan had referred to during the opening remarks. (Note: consideration refers to the legal requirement of a contractual relationship needing to have something in it for both parties, and will be seen as a key component on any constitutional challenge in the courts).
Specifically, Mr. Fortner asked, What about the already retired? Fortner said that he considers the guarantees of funding going forward as just like the existing statutory guarantees that have been frequently ignored. Mr. Fortner concluded by saying he will not support it.
Mr. Madigan fielded more legislators’ questions while continuing to confer with staff counsel who clearly knows her stuff. She stood across from him for the entire session.
Rep. Michael P. McAuliffe (R-20th District) said that he wants claimed numbers independently confirmed by another set of auditors rather than rushing to an immediate vote.
Rep. Jil Tracy (R-94th District) rose in support of holding the vote today. The needs of the state are for action as immediate as possible.
Rep David R. Leitch (R-73rd District) quoted the genius of Einstein’s “eighth wonder of the world,” i.e., compounding interest, which means we should adopt the measure today, not later or in the future when a perfect bill exists, but when the pension systems no longer exist due to bankruptcy.
Rep. Scott Drury (D-58th District) said we must do something, and not worry about constitutionality until something is passed, because the Court cannot rule on an issue until they receive a test case: “This is our test case. We need to move it to the courts so that we in the legislature can move on to other issues.”
Rep. David Harris (R-53rd District) asked if consideration disappeared from the bill? (Note: I wasn’t sure if he was using the word consideration legally, as it sounded like he may have meant thoughtfulness instead.) Rep. Harris quoted former Illinois Senator Dirksen when asked about a bill pending back in his day, to the effect, “Some of my friends are for it, and some are against it. As for me, I’m for my friends.” Mr. Harris said that the state does NOT have an immediate pension crisis, but an impending large problem. Next, he quoted the saying, “Don’t allow the perfect to drive out the good.” Nevertheless he said he believes we can do better than this bill.
Rep. Elizabeth Hernandez (D-24th District) said that maintaining the viability of the economic middle class is important, and this bill is responsible action for the good of the people of Illinois. She asked for a YES vote.
Rep. Thomas Morrisson (R-54th District) said that if this becomes law we will still have $80Billion shortfall. He said he would be voting NO because he introduced his own bill incorporating the state’s use of DC-only (defined contribution, or 401K style) pension plans. “The State is the 12.9 million residents.” Mr. Morrisson said that the legislature must, “Go big,” in its pension reform effort. He noted that the City of Detroit bankruptcy hearing is today, and that we cannot expect taxpayers to foot the bill.
Rep. Dwight Kay (R-112th District) said that he had no prepared statement, but had a call last night from a constituent who asked, “For God’s sake, will someone speak for the taxpayers?” Rep. Kay then proceeded to question Mr. Madigan in some detail.
Would you agree there are 13 components to the state pension plans that we cannot afford today or into the future? Mr. Madigan indicated that the question was too vague to be able to answer.
Do the 85 sick days for half-year of service remain in the bill? Mr. Madigan said, Yes.
Survivor benefits paid at age 50? Mr. Madigan said, Yes.
Was the annual COLA fixed to some degree? Mr. Madigan said it’s different.
Children eligible for insurance coverage? Mr. Madigan said, Yes.
Sick leave credit? Mr. Madigan said, No change.
COLA compounded in 1990 has changed? Mr. Madigan said, Yes.
Survivors receive COLA changed? Mr. Madigan said, No change.
Disability for substitute teachers changed? Mr. Madigan said, No change.
In 1998 we waived early retirement cost in a provision where 34 years becomes 35 years of credit? Mr. Madigan said, No change.
Rep. Kay wanted to know why all these provisions remain unchanged.
Mr. Madigan said, All those items were discussed during the negotiation with the four legislative leaders, but did not survive the negotiation. Mr. Madigan reiterated that the changes made result in savings of $160B over 30 years.
(Note: Rep. Kay appeared to be cross-examining Madigan as if in a courtroom drama.)
Rep. Kay finished by asking, “This is not politics, this is real life, real people. What does, ‘File an action’ mean, if we as a state are broke?”
Rep. Kelly M. Cassidy (D-14th District) said she is pleased with the bill for protecting the needs of our lowest-income state workers.
Rep. Dennis M. Reboletti (R-45th District) said he has some constitutional concerns. He has delved into the original language at the Constitutional Convention back in 1970.
Mr. Madigan said that, as far as constitutionality is concerned, there are several elements that are severable: all except a list of four items, which he named. (Note: I wasn’t able to catch all four but two that he named included the retirement age changes, and the new salary cap provisions, but there were two more named.)
Rep. Patricia R. Bellock (R-47th) said the state of Illinois has had 21 downgrades by investment bond houses, primarily due to the state’s need for pension reform and Medicaid reform. Today, she said, is the day to stop the uncertainty that results in these downgrades. The matter being voted on today is the only reform that all four leaders and the Gov. have agreed upon.
Rep. Durkin (R-82nd) (note: Madigan-Durkin-Nekritz-Senger are the sponsors of the bill) Substantially his remarks:
We’ve come seeking your vote. I have a relative who is an actuary, and I put confidence in the actuaries. This plan sustains viability to the funds. Up to 5% of state employees can choose a DC plan, if preferred. “Failure to act today will surely move our state credit rating even lower if that is even possible.” Act on the merits of the bill, not on politics. Judge ruled today that City of Detroit is eligible for bankruptcy protection. Vote YES.
Mr. Madigan then summed up, very briefly noting that the Senate had just passed the bill.
The matter was then called for a vote.
TOMORROW: my thoughts on the proceedings