CHICAGO — A special Illinois legislative committee tasked with breaking a logjam on pension reform pushed back against Ill. Gov. Pat Quinn Monday for pressuring the group to complete its work as he threatened lawmakers with unspecified "consequences" if they fail to meet his Tuesday deadline.
The 10-member conference committee which convened for its third public hearing late Monday afternoon was appointed last month after it became clear that a legislative impasse over two rival pension packages could not be bridged ahead of a special session called by Quinn.
Lawmakers' failure to solve the state's pension crisis before adjourning their regular session at the end of May drove two rating downgrades. All three rating agencies assign a low single A rating to the state's general obligation debt and a negative outlook. The state is grappling with $95 billion of unfunded pension liabilities in a system just 40% funded.
Quinn imposed a July 9th deadline on the group, but members warned last week it could not complete its work by then given the need to seek actuarial analysis of various proposals and craft a plan that can meet the varying interests of the House and Senate.
"They have had one excuse after another for the last two years. It's time for them to do their job. If they don't do their job by tomorrow, there will be consequences," Quinn said during a public appearance Monday ahead of the Tuesday special session.
The governor has not signed pieces of the fiscal 2014 budget and some have speculated that he could act to stall lawmakers' pay. While no action is anticipated on pensions, lawmakers are expected to vote to override Quinn's amendatory veto on concealed carry weapons legislation.
Committee members pushed back against Quinn during the Monday hearing, chastising the governor for imposing what they considered an unrealistic deadline, threatening "consequences," and failing to attend the hearing. Committee members were also frustrated by their failed attempts to pin Quinn's administration down on specific savings he wants achieved in the package.
The administration voiced its own frustration with what it considers the committee's slow pace.
"We have a fiscal emergency," acting budget director Jerry Stermer told the committee. "Our bond ratings have been lowered by the rating agencies. That bond rating lowering impact spills over to public universities, units of local government."
Stermer underscored the two-year-old effort to reach consensus on reforms and the governor's expectation that sufficient actuarial work had been done on past proposals for the committee to meet the July 9th deadline. He also reiterated Quinn's support for a framework that erases the unfunded liabilities, stabilizes the system, and ends rising contributions that are squeezing the state's general fund. The fiscal 2014 contribution rises by nearly $1 billion from a year ago to $6 billion.
While saying the committee shared the governor's sense of urgency, state Sen. Kwame Raoul, D-Chicago, who chairs the committee, said: "It's important for all to fully understand what it takes to solve this problem and to really cast the politics aside and allow this conference committee to do the work."
"It takes work to break from that [stalemate over previous plans] and chart a new path," he told Stermer after his presentation. "It hurts the work of the committee" when the governor's representatives are saying that the committee "in essence is not working at a good enough pace."
Raoul said the committee was awaiting actuarial scoring on various proposals members have discussed for possible inclusion in a reform package in addition to proposals laid out by Quinn's office. The group is also expected to seek actuarial work on a plan endorsed by public university presidents that ties cost-of-living adjustments to inflation and shifts a portion of the contribution burden from the state to universities.
Raoul and other committee members questioned why Quinn had not accepted their invitation to appear at the hearing and repeatedly failed to pin Stermer down on how much savings Quinn was seeking the plan they put forth. Stermer said he was appearing in Quinn's stead.
Stermer did not offer up specifics on what "consequences" lawmakers face, except to say they would have to answer to taxpayers. The state has said the pension burden grows by $5 million daily.
In addition to Stermer's appearance, the committee heard Monday from representatives of several of the state's five retirement systems and from a state representative who has offered up his own reform plan.
The downgrades and negative headlines of pension inaction drove up the state's already steep penalties to borrow when it sold $1.3 billion of general obligation bonds late last month. The spread on the deal's 10-year uninsured bond to the Municipal Market Data benchmark scale rose to 164 basis points from 141 on a sale in June.
The most recent gridlock is over two plans, one sponsored by Senate President John Cullerton, D-Chicago that asks employees and retirees to accept cuts in exchange for preserving their retiree healthcare subsidies. House Speaker Michael Madigan, D-Chicago, sponsored a separate plan that imposes direct cuts and offers double the savings.