| SPRINGFIELD, Ill.
SPRINGFIELD, Ill. Aug 17 Illinois lawmakers,
meeting during a special session on Friday in a bid to fix the
state's ailing public pension programs, are unlikely to produce
an overhaul of the nation's most underfunded state retirement
system, lawmakers and lobbyists said.
Governor Patrick Quinn, who called legislators back to the
state capital of Springfield, said the state must reform the
creaking system, which has unfunded liabilities of $83 billion.
But few lawmakers or lobbyists believe substantive action
will be taken during Friday's session, which will consider one
small pension bill, and could adjourn a few hours after it
The predicament of Illinois is the latest example of a
nationwide problem of ballooning costs of pensions for
government workers such as teachers as the population ages.
Illinois' financial condition is among the worst in the
nation, on a par with California where three large cities have
filed for bankruptcy protection citing out-of-control pension
costs. The nation's most populous state and the fifth most
populous have some of the lowest debt ratings among the states.
Democrats, who hold the governor posts and legislative
majorities in both states, are between a rock and a hard place.
Voters are demanding curbs on pension abuses and skyrocketing
costs, while change is fiercely resisted by public sector
unions, the traditional paymasters of the Democratic party.
On Wednesday, Democrat Quinn got a taste of union anger when
he was heckled at a state fair by several thousand unionized
state workers - a group that helped narrowly elect him in 2010.
The Illinois pension system is the most underfunded in the
country, according to Moody's Investor Services.
Unlike California, where Governor Jerry Brown is seeking tax
increases to help plug a budget hole, Illinois already has
played this card, sharply raising both business and personal
state income taxes in 2010 with little financial improvement.
In April, Quinn proposed a pension fix that he said would
save taxpayers up to $85 billion over 30 years and result in a
fully funded system by 2042. The plan called for higher employee
contributions, lower cost-of-living adjustments and a phased-in
retirement age of 67 in exchange for access at retirement to
Quinn also wants obligations for teacher pensions, which
account for the bulk of the state's unfunded retirement
liabilities, shifted to local districts from the state.
That has put him at odds with minority Republicans and with
leaders of his own Democratic Party, including the longtime and
powerful House Speaker Mike Madigan.
Republicans fear a voter backlash if teacher pension costs
are shifted to school districts, which could prompt higher
property taxes in their stronghold of the Chicago suburbs.
Madigan, who is also chairman of the Illinois Democratic
Party, fears alienating Democratic union backers who are loyal
foot soldiers for election campaigns.
Labor unions are by far the biggest campaign finance backers
of Illinois Democrats, more than doubling the second-largest
group, lawyers, according to data compiled by Follow the Money.
Madigan has said he will allow a vote in the House of
Representatives on a limited pension reform bill that passed the
state Senate in May.
The measure only affects pensions for state employees and
lawmakers by creating a swap between lower cost-of-living
increases and state health care coverage in retirement.
Even this modest reform may not pass during the one-day
special session on Friday, lawmakers said.
"If we do something that nibbles around the edges we're done
with pension reform for a while," Tom Cross, Illinois House
Republican leader, said on Thursday.