The Illinois Senate and House of Representatives both took up legislation to reform the state’s public employee retirement systems during the week of March 18-22.
The pension changes were largely “test votes” that could help define the final parameters of any reforms that may ultimately be sent to the Governor.
The Senate approved a very narrow measure – Senate Bill 1 – that would only impact active teachers outside Chicago. Retired teachers, state employees, university employees, Chicago teachers, General Assembly members and judges were not included in the bill.
Senate Bill 1 was criticized as a piecemeal approach to a problem that has overarching consequences for all Illinoisans. It was approved on a partisan roll call with no Republicans voting for it.
Despite having bipartisan support, a much more comprehensive measure – Senate Bill 35 – failed to garner sufficient votes in the Senate to advance. Only 11 of the 40 members of the Democrat super-majority voted for the changes in Senate Bill 35 while 12 of the 19 Republicans, including me, voted for it.
The House also approved a pension change that would limit cost-of-living adjustments (COLA) paid to all retirees. A 3% compounded COLA currently granted to retirees has been identified as a major expense driving up the cost of pension benefits. Under House Bill 1165, retired workers would be limited to a cost-of-living increase of 3% on the first $25,000 of pension income for persons not covered by Social Security, and on the first $20,000 for those covered by Social Security. This would translate to no more than $750 for those who do not receive Social Security benefits and $600 for those covered by Social Security.
Annual cost-of-living increases have been indentified as one of the largest cost drivers of the state’s current retirement systems. It has been projected that changing the way in which these increases are calculated could save the state $100 billion by 2045.
One measure that did pass the Senate with strong bipartisan support was Senate Bill 1224, which would end the practice of allowing persons to use unused vacation and sick time to boost their pensions when they retire. The measure, which passed 53-0, would apply only to new hires.
Earlier in the month the House sent the Senate measures that would increase the retirement age to 67 (House Bill 1166) and cap pensionable income at about $113,000 (House Bill 1154).
It was disappointing that Governor Pat Quinn didn’t bother coming to Springfield to push for reforms, despite having said he “was put on earth” to solve the pension problem.
While not directly a pension issue, a March 19 ruling by a Sangamon County judge upholding legislation adopted last year could have a significant impact on the state’s ability to control healthcare insurance costs. The court upheld Senate Bill 1313, a 2012 law that repealed a guaranteed state subsidy for health insurance premiums of up to 100% (for retired employees with 20 years or more of service). The court ruled that the benefit was not a part of an employee’s pension and therefore did not fall under the constitutional guarantee afforded to pension benefits.
Although pension changes gathered the most attention, much of the week was spent in committees reviewing hundreds of pieces of legislation in advance of a March 22 deadline to conclude committee review of bills and send them to the full Senate. The committee reviews are the first stage of the annual process that winnows down thousands of proposals to those that will ultimately win approval from both the Senate and House and be signed into law by the Governor.
One critical measure that remained in committee is a much-needed reform of the state’s workers’ compensation laws to assure that a genuine tie between the workplace and the injury exists. Illinois has long been plagued by a system in which employers are forced to cover injuries under the workers’ compensation system, even if the injury had little or nothing to do with the employee’s job.
Senate Bill 2307 would establish “causation” standards that would be used to determine if an injury was actually caused by work conditions or occurred on the job. The lack of such standards has been cited by businesses as a major reason why Illinois’ workers’ compensation costs are higher than competing states. Even the Illinois Attorney General has issued a report calling for reform, citing the causation issue as a major factor in driving up workers’ compensation costs for the state.
In other action during the week, the Senate passed a number of bills, including:
EPA Reports (SB 33): Allows the Illinois Environmental Protection Agency to require that drinking water quality test data be submitted electronically rather than filing paper copies.
Gaming Chips (SB 66): Clarifies that gaming chip suppliers can attach their logo (rather than the company name) to chips, supplies and equipment. This codifies actual practice, as most suppliers have used a logo, but a review of statutes found that the law actually required the use of the supplier’s name rather than a logo or other distinctive mark.
Nursing Home Notices (SB 1197): Requires nursing homes to fully inform prospective residents and their families of their obligations to comply with federal spousal impoverishment disclosure requirements and the potential for denial of Medicaid for failure to comply.
Sexually-Violent Offenders (SB 93): Allows for sexually-violent persons to be temporarily housed in a distinct portion of the Chester Mental Health Center. The temporary housing is needed while permanent facilities at Rushville are undergoing renovations to expand capacity. The temporary housing must be closed by June 30, 2015.
Additional legislation approved by the Senate and Senate committees can be found at the Senate Republican’s “Senate Action” page.