The Illinois Senate soundly rejected a House pension bill Thursday night leaving state lawmakers one day to reach a compromise before the legislative session ends.
The Senate voted 42-16 against a House bill sponsored by Speaker Michael Madigan that was aimed at saving the state about $188 billion over the next 30 years by raising employee contributions and capping pension levels.
“The legislation is looked at by many members of the legislature as unconstitutional and an overreach by the House,” the Illinois Senate Democratic Caucus said in a statement.
Under the House-passed bill, state employees would contribute one percentage point more each of the next two years and pension benefits would not be earned on salaries above $110,000. Cost-of-living adjustments would change to 3% of $1,000 per year of service from the currently, a compounding 3% annual COLA on the pension benefit is granted.
It appears the last hope for the General Assembly to pass pension reform this session lies in Mr. Madigan's hands. He has yet to call for a vote on a competing Senate bill introduced by President John Cullerton, who has said his bill would withstand a constitutional challenge and which was negotiated between legislators and unions who represent state workers and retirees.
Mr. Cullerton actually voted in favor of the House bill, unlike many of his fellow Democrats.
Mr. Cullerton's Senate bill is only expected to produce a third of the savings of the House bill. His bill mainly revolves around giving participants different options on which retirement benefits to keep.
Illinois' unfunded pension liabilities are around $100 billion and the state has the worst credit ratings in the country, largely because of the failure to enact meaningful pension reform.