While the speaker of the Illinois House has said he's willing to work with the governor, and that nothing's a non-starter, he had a warning for Gov. Bruce Rauner about the pension changes Rauner proposed in his budget message. The short version: the Illinois Constitution prohibits a diminishment of pension benefits, and there's already one pension restructuring plan which awaits final court action.
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Rauner's plan “would appear to be a reduction in benefits that we did not do in S.B. 1,” Speaker Mike Madigan (D-Chicago) said, comparing the plan to a 2013 law now tied up in court, “and they are proposing to spend $2.2 billion of anticipated savings, which I consider to be reckless conduct, and something that should not be done.”
S.B. 1 restricts future increases. Rauner says the earned benefits would hold, but from now on, all state workers and teachers would be treated the same way new hires are, with larger employee contributions and later retirement ages. That “Tier Two” alignment pertains to those hired in 2011 or later.
“S.B. 1 was already declared unconstitutional by a court, (and) this one has even greater constitutional challenges,” adds Senate President John Cullerton (D-Chicago). “He cannot book any savings in the next fiscal year with that proposal. That's a $2.2 billion hole in his budget that he'd have to make up somehow.”
Madigan, during his post-speech news conference, was asked to compare Rauner's vision of Illinois to two states whose governors Rauner says he admires: Wisconsin and New Jersey.
“Refinancing is what Gov. Walker is proposing in Wisconsin,” Madigan said. “That's churning the paper by the underwriters, the investment houses, and the 1 percent of the country just makes more money.”