CHICAGO — Illinois lawmakers Friday failed to take action to tackle the state’s massive pension liability during a one-day special session.
Legislators are not expected to take up the subject again until after the November election.
Gov. Pat Quinn in late July called the special session to take up pension reform legislation that stalled during the regular session in spring.
Illinois’ pension liability is just under $83 billion, with a 43% funded ratio, the worst among the states.
Top lawmakers and Quinn have bickered over proposed reforms, and the prospect of a major pension reform bill seemed unlikely.
The House was expected to consider a bill that would have reformed two of the state’s five retirement systems,
That bill, which the Senate passed in the spring, featured cost-of-living changes for the state employees and General Assembly members.
But the measure never came up for a vote in the House. Representatives instead debated a small bill that would have eliminated pensions for future lawmakers.
“This at least begins reform right here at home,” Rep. Barbara Flynn Currie, D-Chicago, who sponsored the bill, said during floor debate. “It’s not a huge step from a financial perspective, but is a huge step from the perspective of pension reform, and we can say to our constituents that we’ve taken a first step toward solving the state’s fiscal problems.”
The House ended up not voting on it. The Senate adjourned even before the House finished its debate.
Rating agencies have warned that Illinois needs to act on pension reform to stabilize its finances and ratings.
After the state’s spring session ended in May without pension action, Standard & Poor’s warned leaders that there would be consequences from the pension strain.
The agency rates Illinois’ general obligation debt A-plus with a negative outlook, and analysts said they expect to resolve the outlook by the end of the year based in part on how the state addresses the retirement liability.
Moody’s Investors Service rates Illinois A2, making it the agency’s lowest-rated state, with a stable outlook. Fitch Ratings assigns an A rating, also with a stable outlook.
In a statement issued late Friday, Quinn said it was a “disappointing day for Illinois taxpayers.”
“Each day we wait to enact comprehensive pension reform, the problem gets worse,” Quinn said. “Illinois is currently on track to spend more on pensions than education by 2016, and that is unacceptable.”