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Major Budget Items Pass at Capitol

By Fanna Haile-Selassie
By Randy Livingston

Story Created: May 29, 2012 at 6:20 PM CDT
(Story Updated: May 30, 2012 at 4:14 AM CDT )

WSIL TV -- It was a busy day at the Illinois state capitol on Tuesday. Lawmakers finally passed a Medicaid reform plan. The last hold-up was in the Senate, where lawmakers had yet to vote on the cigarette tax bill. With that done, an overall budget agreement and pension reform remain on the agenda.

Tuesday morning, House Speaker Mike Madigan introduced the long-awaited pension proposal in the house pension committee. It eventually moved onto the house floor, where debates grew heated and eventually stalled. Representative Mike Bost gave a furious speech about how lawmakers are trying to pass the bill too quickly and without reading it.

The bill would begin shifting the state's pension payments for teachers to local school districts, a move not popular with the state's teacher's union.

"That's going to result in reduced funds for the schools around here, and for the universities, tuitions will be raised. You know, services will have to be cut," explains Matthew Johansson, with the Illinois Education Association.

Right now, school districts pay a contribution rate of .58 percent per employee. Under the proposal, the rate would increase to 1.25 percent in the new fiscal year. Lawmakers who oppose the bill worry it will drive up property taxes because of the cost shift to local school districts. Union members want more say in the proposal.

Johansson says, "Let's slow it down, let's talk about things, let's come up with something that's fair. There's no need to rush something through, rush a bad bill through, just because you want to get something done."

Two measures are heading to the governor's desk: Medicaid reform and a charitable care bill. Both were tied together in a bill that senators passed Tuesday afternoon. A one-dollar cigarette tax will help close a $2.7 billion gap in Medicaid, and the charitable care bill defines which hospitals can be tax exempt.

To keep that status, hospital losses on Medicaid patients and charitable care must surpass their potential property tax liability. A deal local hospital officials call fair.

"I think you should justify your tax exempt status in terms of your behaviors and what you do for your community. And we, multiple times over, exceed that liability," says Southern Illinois Healthcare President and CEO, Rex Budde.

Governor Quinn is already giving kudos to lawmakers for finishing up work on Medicaid. The legislative session is set to wrap up on Thursday.

From the Southern Illinoisan...

Link to the Original Story

Public pension overhaul moving forward in Capitol

BY KURT ERICKSON, THE SOUTHERN SPRINGFIELD BUREAU

SPRINGFIELD — With time ticking down on the spring legislative session, a Democrat-led plan to overhaul state employee pensions ran aground in the Illinois House on Tuesday.

A proposal that would shift state pension costs to suburban and downstate school districts became the focal point of outbursts by Republicans and was not called for a vote.

State Rep. Mike Bost, R-Murphysboro, expressed outrage on the House floor when Democrats ignored Republican attempts to remove school districts from the cost shifting plan over concerns that it could result in local property tax hikes.

“You should be ashamed of yourselves,” Bost screamed as he tossed copies of the bill from his seat on the floor. “Enough! When’s it gonna stop?”

House Minority Leader Tom Cross, R-Oswego, accused House Speaker Michael Madigan — a member of the General Assembly since 1971 — of not negotiating in good faith and being the root of many of the state’s financial problems.

“For the last 40 years, you have had your fingerprints on the mess we have today,” Cross said.

Madigan, D-Chicago, didn’t take the bait as lawmakers worked toward a midnight Thursday adjournment date with major issues like pensions and the budget still unresolved.

“We have several major issues to be resolved before we end this session. I don’t plan to issue any threats. I don’t plan to issue any kind of statements which are designed to be derogatory toward anybody,” Madigan said.

Emotions were running high after a House panel voted 9-5 to endorse the pension plan, which is designed to begin chipping away at an unfunded pension liability of $83 billion.

The measure appeared poised to be voted on by the full House on Tuesday, but Democrats who control the chamber adjourned for the day in the mid-afternoon. A vote could still come Wednesday. The Senate also could float a pension fix and try to ram it through before the end of the session.

Supporters had expressed hope that a vote would come soon.

“We are on the verge of historic reform in Springfield. With this change, we can move away from being financial laughingstocks,” said state Rep. Elaine Nekritz, D-Northbrook, who helped negotiate the package. “I feel confident that the pain we’re inflicting today will ease in the days ahead.”

The proposal would affect teachers, lawmakers, prison guards, university employees and current retirees. It would not affect judges. It would not require workers to make larger contributions to their pensions, nor would they be required to work until age 67, as Gov. Pat Quinn had suggested.

But, schools, universities and community colleges would have to start paying a larger share of employee pension costs. And, retirees would receive smaller cost-of-living increases or have to give up their state-paid health insurance premiums.

Opponents said shifting the state’s costs would lead to higher property tax bills and higher college tuition costs.

“The cost shift is going to be a problem,” said Ben Schwarm of the Illinois Association of School Boards.

Democratic leaders say the cost shift is fair because Chicago property taxpayers pay into the retirement fund for Chicago Public Schools, while the retirement fund for downstate teachers is partially financed by the state.

Union groups made it clear the changes would be challenged in court.

“It is simply not fair to the employees to ask them to pay for the mistakes of others. Our members have paid each and every paycheck, every dime they’ve been required to pay, they’ve done that,” said Henry Bayer, executive director of American Federation of State, County and Municipal Employees Council 31.

Madigan said the proposal will ensure the currently underfunded systems are 100 percent funded by 2043.

“The reforms in this package, coupled with the new funding formula, should result in significant savings,” Madigan said.

James Bachman, chief of the Illinois Retired Teachers Association, said the changes will cause financial “calamity” for his members.

“Retired teachers fulfilled each and every requirement of them. In return for their services in the field of education, they were given a modest salary and the promise of security when they retired,” Bachman said.