Pension shift in the works

Last week, powerful Illinois House Speaker Michael Madigan, D-Chicago, appeared to all but endorse an idea to force downstate and suburban school districts to pay a significant share of their state pension contributions for the first time in anyone’s memory.

Senate President John Cullerton, D-Chicago, floated that very proposal last year, and Gov. Pat Quinn, D-Chicago, added his support not long ago.

Needless to say, if all three Democratic leaders are talking about it, you can probably expect some action this year. However, there will be strong pushback from suburban and downstate legislators, who’ll undoubtedly fear a voter backlash over potentially massive local tax increases to pay for the idea.

Madigan spoke for well over an hour last week at an Elmhurst College event at the invitation of his old nemesis, Lee Daniels, who was House speaker for 2 years after the 1994 Republican landslide. Madigan almost never talks for that long when he speaks in public, so his speech was heavily covered by the media.

As is his custom, Madigan didn’t come right out and officially endorse the idea to ease the state’s ongoing budget strain by passing pension obligations down the governmental food chain to local schools and public colleges and universities, but he did indicate he was strongly leaning in that direction.

The “normal arrangement,” for pensions, Madigan said, was that the employee and the employer both pay into the pension system. But, local school districts pay just 0.054 percent of payroll into the Teachers’ Retirement System fund, Madigan noted (and when he has it down to the decimal like that, you know he’s focused on the issue), and added that the universities pay “zero” toward employee pension costs.

“And let’s understand,” Madigan said about education employees, “these are people that never got a payroll check from the state of Illinois.” The speaker went on to note that the state paid $4 billion this year into the pension funds, half of which went to the Teachers’ Retirement System alone. “So over one-half of our obligation to pensions, which is the subject of great public debate today, is for people who never worked for the state of Illinois,” Madigan said.