Springfield is finally getting serious about Illinois’s pension crisis. So far the state house has been dragging its feet, rejecting previous reform bills and debating half-measures with little chance of fixing the problem. Yesterday, however, the Illinois House of Representatives finally a passed a bill that looks like the state’s best hope for a solution. The measure aims to increase the funding level of pensions for state workers by forcing workers to pay more into the system, reducing annual cost-of-living increases, raising the eligibility age, and capping pensionable income.The bill still has to make it through the State Senate, but Governor Quinn has given every indication that he will sign the bill if it reaches his desk. This is a step in the right direction, and it’s good to see it coming with a mea culpa of sorts, as the WSJ reports:
The measure was promoted by House Speaker Michael Madigan, who has led the chamber for nearly three decades. Ahead of Thursday’s vote, Mr. Madigan acknowledged that the pension problem flowed partly from lawmakers and governors enhancing retirement benefits over the years and not always weighing the costs of their decisions. A spokesman for Mr. Madigan said the speaker accepts his share of blame, but was one of many who contributed to the problem.
Not everyone is satisfied with the measure. As the WSJ notes, a number of observers have criticized the bill for sticking with the defined-benefit systems that have caused problems for pension systems around the country, rather than switching to the defined-contribution plans that now dominate the private sector. We tend to agree, but given that far more modest bills have stalled, it’s doubtful such a reform could pass.And even if this bill passes, the pain will continue. Unions are likely to challenge the measure in court and argue that reneging on promised benefits would violate the state constitution. This battle is only beginning, but it is, at the very least, a good first step for a state that desperately needed one.[Photo of Governor Pat Quinn courtesy of Getty Images]