Summit on Illinois pension woes ends with no new plan

Reuters News
Posted: Feb 11, 2013 10:03 PM

By James B. Kelleher

CHICAGO (Reuters) - A union-led summit to address Illinois' unfunded pension liabilities ended on Monday without any deals or significant breakthroughs, according to elected officials from both sides of the aisle who attended the event.

The summit, organized by a coalition of unions that represents public workers, drew Democrat and Republican state lawmakers to an AFL-CIO office in Burr Ridge, Illinois, but ended after three hours without a statement of consensus or a commitment to meet again.

Daniel Biss, a Democratic state senator from Chicago's northern suburbs who as a state representative co-authored a plan to address the state's pension mess, said "no substantive breakthrough" was made during the meeting.

In Illinois, five state pensions are in the red by a staggering $97 billion - or more than $20,000 for every household in the state. Inaction by lawmakers has prompted rating agencies to downgrade the state's credit rating and raised fears of service cuts, tax increases and other hardships for the residents.

"I'm glad that everyone was in the same room," Biss said. "But at some point, you have to stop talking about talking and start crafting a solution. That didn't happen."

Biss, who came up with a proposal with Democratic state Representative Elaine Nekritz to reduce the unfunded liabilities of the state's five public pension plans, said he came away from the meeting unsure whether the parties would even meet again.

"It's not even clear whose court the ball is in," Biss told Reuters.

Tom Cross, the Republican leader in the state House, said the union coalition, "We Are One Illinois," remained committed to fixes it proposed late last year, which rely largely on new taxes to address sky-rocketing pension liabilities.

"All five systems are receiving a benefit they are not adequately paying for," Cross said. "The unions need to recognize that fact - and the fact that there is not an appetite among the general public to fix the problem just by raising more revenue."

In a joint statement, the nearly two dozen unions that belong to the "We Are One Illinois" coalition said the summit was designed to demonstrate organized labor's "ability to work together constructively with all parties."

By that measure, the coalition said, Monday's meeting was a success and the unions challenged lawmakers to "use the momentum from today's summit to finally, seriously, negotiate a fair and constitutional solution that all parties can support."

Although Monday's summit drew a number of state lawmakers, Michael Madigan, a Democrat and the powerful speaker of the Illinois House, did not attend. Many analysts view Madigan as the most powerful politician in the state and look to him for leadership on pension reform.

Illinois has contributed less than needed to restore its public pension systems in nine of the last 10 years, according to a state report. Last month Standard & Poor's Ratings Services cut the state's credit rating and said it may downgrade it again, citing the state's inaction on pension reform.

The state's leaders have stalled for years in fixing the pensions shortfall, in part because of fierce opposition from public sector labor unions.

Democrats have a stranglehold on state government and depend on unions for significant political and financial support.

(Reporting by James B. Kelleher; Editing by Lisa Shumaker)