Sunday, January 6, 2013

No deal on Illinois pension fix, talks to continue

CHICAGO (Reuters) - A fix for Illinois' public pension crisis remained elusive on Saturday after a meeting between Democratic Governor Pat Quinn and legislative leaders failed to produce a deal.

State House of Representatives Speaker Michael Madigan, a Democrat, said that it was still possible to reach a deal in time to be voted on early next week by the Legislature.

"There's no resolution today. We're going to continue to work throughout the weekend and right through Tuesday of next week to try and move legislation that will solve this funding problem of Illinois pension systems," Madigan told reporters following the meeting.

The House has scheduled a Sunday-through-Tuesday lame-duck session ahead of the start of a new legislative session on Wednesday. Quinn has been pushing the Democratic-controlled Legislature to pass pension reforms before the new session begins.

Illinois' finances are buckling under the weight of a huge $96 billion unfunded pension liability that is rapidly siphoning off money needed for essential state services such as healthcare and public safety.

The lack of a pension fix has led to downgrades of Illinois' credit ratings, with Moody's Investors Service warning last month it could drop Illinois below the current A2 rating, the lowest among the states it rates.

A potential breakthrough on a pension fix surfaced on Friday when Quinn announced that Madigan had agreed to defer until a later date a measure to gradually shift state payments for teacher pensions onto local school districts. Republican lawmakers were concerned the move would lead to local property tax hikes.

Madigan on Saturday said that will lead to a partial pension fix, leaving lawmakers to deal mainly with benefit levels. The Teachers' Retirement System, which includes educators in the state outside of the Chicago Public Schools, is the largest of the five state pension funds and accounts for the lion's share of the unfunded liability.

Legislative leaders discussed a series of steps aimed at fully funding the pension system in 30 years, including boosting worker contributions, raising retirement ages and limiting cost-of-living adjustments for retirees.

But differences of opinion remained about the structure and, ultimately, the constitutionality of the bill. Public labor union officials have warned they will go to court to fight pension changes and they are confident they will prevail given strong protections for pension benefits in the Illinois Constitution.

" The question is can you bring these all together and get a bill that can pass and be signed by the governor," Madigan said.

The governor did not make any statements after the meeting. A spokeswoman said he would continue to push for a deal until the last moments of the lame-duck session.

"We still want to see pension reform done by January 9. We're going to be working on it every hour up until that time. Progress has been made, but no deal yet, no solid agreement yet," said Quinn spokeswoman Brooke Anderson. (Additional reporting by Karen Pierog; Editing by Will Dunham and Eric Walsh)

Source: http://news.yahoo.com/no-deal-yet-illinois-pension-fix-state-house-212352529.html

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