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Bivins votes against pension reform bill

Senator open to tax on retirement income

Published: Tuesday, June 4, 2013 1:15 a.m. CDT • Updated: Tuesday, June 4, 2013 11:44 a.m. CDT

(Continued from Page 1)

The Democratic majority of the Illinois Legislature is divided on how to reduce the state’s nearly $100 billion in debt, but then again, so are the minority Republicans.

Last week, the state Senate voted 42-16 against the House’s more aggressive version of pension reform.

Of the 19 Republicans, 10 Republicans voted for the House measure. Nine voted against it, including Sen. Tim Bivins, R-Dixon. (One Republican “no” vote, Sen. Karen McConnaughay of St. Charles, later told a newspaper that she had intended to vote yes.)

Sen. Mike Jacobs, D-East Moline, who represents Whiteside County, joined most Senate Democrats in rejecting the House bill, sponsored by Democratic House Speaker Michael Madigan of Chicago. It would have required workers to contribute more, cut benefits, and raised the retirement age for younger workers.

The House measure would have cut pension debt three times more than the one backed by Senate President John Cullerton, D-Chicago.

The state constitution bans the diminishing of public workers’ retirement benefits. Unions read that language to mean that the terms of pensions should not change after workers’ careers start. Others, including top law firms, say the provision bars the state from removing pension benefits employees already have received, but changes can be made going forward.

Bivins opposed the House bill, saying it was unconstitutional. He was the rare Republican who used the same argument against the Cullerton measure. That bill would have given workers and retirees choices for their benefits. For instance, they could choose between getting health insurance or 3 percent cost-of-living increases compounded each year.

While public employee unions backed Cullerton’s bill, the state retired teachers association did not, citing the constitutional argument. Bivins said that before the retirees came out against the bill, he had planned to vote for it.

Bivins blamed the pension debt on the state’s history of not making payments into the fund. He said he wasn’t “totally against” proposals to transfer teacher pension payment responsibilities from the state to school districts. But he prefers a phase-in, so that local property taxes don’t skyrocket.

He also said he would consider a tax on pension income “if that’s the only option” to help solve the pension problem. The state doesn’t have such a tax now.

“Personally, I would have no problem with that,” said Bivins, a retired Lee County sheriff who makes $77,256 a year from his government pension.

Some of the other Republican senators who rejected the Madigan pension measure have high numbers of state workers in their districts.

Sen. David Luechtefeld, R-Okawville, who voted against both the Madigan and Cullerton bills, has 11 prisons in his southern Illinois district or in areas that border it. It also includes Southern Illinois University in Carbondale.

“The constitution is really clear,” he said. “We cannot diminish the pensions.”

Sen. Dan Duffy, R-Lake Barrington, disagreed with Luechtefeld’s approach.

“The only one who can determine whether a bill is constitutional is the courts. It’s not our job to determine what is constitutional,” said Duffy, who represents a suburban district. “It’s our job to make sure we get out of bankruptcy.”

Duffy, who didn’t vote on the Madigan bill last week because he was attending his child’s graduation, said he would have voted for it.

“Speaker Madigan’s bill would rip off the bandage quickly,” he said. “Cullerton’s would revisit the issue every year. We would have uncertainty.”

Sen. Kyle McCarter, R-Lebanon, said he opposed the Madigan bill because it was unconstitutional. He said the state should get out of the “pension business” and have new employees go on 401(k) plans.

He opposed the idea of taxes on retirement income, unless the state does away with the 67 percent income tax increase from a couple of years ago.

“It’s hard to talk about a pension tax when the state imposed such a huge tax increase,” he said.

The pension debt is rising by $17 million a day, but Bivins and the other Republican senators said they didn’t know whether the state would solve its pension problem this year.

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