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Thursday, Jan. 17, 2013 01:24 pm

The state pension reform waiting game

“Frankly, I’m not sure they want it,” Illinois Senate Republican Leader Christine Radogno said Tuesday about the Democratic legislative leaders and state pension reform.

It sure looked like she was right last week, at least in the House, where Speaker Michael Madigan barely lifted a finger for any of the pension reform bills that were on the table.

His top aides insist that Madigan does, indeed want pension reform. Madigan has said he wants a bill to pass. So, what will it take to get him off the dime and start pushing for a solution?

Madigan’s members almost always take their cues from their leader on the big stuff. When he says “This is the bill I want right now,” they tend to go along. Until they get that message, rank-and-file House Democrats hold back and wait.

For his part, the conservative Madigan doesn’t usually get too far ahead of his members. He polls his caucus regularly, and if he sees major resistance to an issue, he’s almost always reluctant to push it. Unlike Gov. Quinn, Madigan understands that defeat makes you look weak, and Madigan is obsessed with projecting his image of power.

And sometimes, especially when Madigan wants something big, he’s willing to wait and wait, and then wait some more until the time is right before he’ll make his move.

So, take him at his word that he wants pension reform. What’s he waiting for?

The most obvious answer is the so-called pension payment cost shift, a proposal favored by Madigan, Senate President John Cullerton and Chicago Mayor Rahm Emanuel. The plan shifts employer pension costs currently paid by the state to public schools and colleges.

The Republicans and plenty of suburban and Downstate Democrats oppose the cost shift, claiming it will lead to property tax hikes. Chicago isn’t in the Teachers Retirement System, which is why Emanuel supports the idea.

But proponents point to a recent pension plan as a very workable framework. That proposal shifts the state’s employer costs at a rate of half a percentage point of payroll per year. If school districts and universities can’t absorb half a point of payroll a year without a big tax or tuition hike, proponents say, then they need to send their leaders back to management school.

Even the Republicans admit that there’s some merit to the cost-shift idea. The ultra-conservative Illinois Policy Institute and Ty Fahner at the Civic Committee both back the plan as well. They point out that school districts use end of career pay raises to encourage people to retire. Those raises are capped at 6 percent a year, but over four years that works out to be 26 percent with interest, which puts a huge burden on the pension systems, and in turn, on state taxpayers who have to pick up the tab.

When Madigan dropped the cost shift as a “must have” in the days leading up to January’s “lame duck” session, the governor trumpeted the move as a major breakthrough that would lead to a pension reform deal.

But, the lame duck session turned out to be very much like last May, when Madigan agreed to back off the cost shift and handed the pension bill to House Republican Leader Tom Cross. Quinn hailed that decision as progress, but Madigan’s members quickly realized that no Madigan sponsorship meant no Madigan support and the bill crashed and burned.

So, how the heck is this cost-shift thing ever gonna pass? If the Republicans oppose it and lots of members of Madigan’s own caucus say they’re against it, how does he find the votes and convince the GOP to climb aboard?

Madigan’s people won’t say, but a major crisis would be the most obvious avenue.

If the state’s credit rating is seriously downgraded, tons of pressure will be put on the General Assembly to take some action and restore some credibility to state finances. The Republicans might be more willing to come to the table if their nervous big business allies insist they participate in a comprehensive solution.

Barring that, the only other way forward in the interim might be to do some small things that Madigan’s caucus clearly agrees to. But even that might not go anywhere if Madigan decides to continue withholding support until he reaches his ultimate goal.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.
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