BRADY VOTES AGAINST INCOMPLETE PENSION REFORM MEASURE
This week State Senator Bill Brady (R-Bloomington) voted against Senate Bill 1, an incomplete pension reform measure that passed the Illinois Senate on Wednesday, March 20. Also on Wednesday, Brady voted for Senate Bill 35, a more comprehensive pension reform plan that failed to garner the necessary votes to pass the Senate.
“Senator Cullerton should be commended for his effort on pension reform, but his bill unfortunately didn’t do enough to right the system and put Illinois back on the path to fiscal solvency,” said Brady. “Another bill we considered directly before the vote on SB 1, Senate Bill 35, contained much broader reforms.”
Brady, who voted in favor of Senate Bill 35, pointed out that it was a better option because it took a much more comprehensive approach making reforms to not only the Teachers Retirement System, but also to the State Universities, State Employees and General Assembly Retirement Systems. SB 35 would have made changes to benefits for current employees and retirees, strengthened the state’s funding formula, and created a new tier 3 defined contribution plan. Additionally it would have saved the state seven times more than SB 1.
Senate Bill 1 only applies to current teachers hired before 2011 and requires them to choose between either reduced cost of living adjustments on future benefits and keeping access to retiree health insurance, or keeping a full cost of living increase and losing access to health insurance.
Senate Bill 1 initially failed only receiving 29 of the requisite 30 votes and was placed on postponed consideration. The bill was brought up for another vote a few minutes later and barely passed with the minimum 30 votes.
“The vote on Senate Bill 1 clearly demonstrates that it is far from a perfect solution,” said Brady. “Illinois has the worst funded pension system in the nation, and we need to address this, but we can’t do it in this piece-meal fashion making small reforms one system at a time. Real, comprehensive reform that considers all of the pension systems, including the General Assembly, is necessary.”
IL HOUSE APPROVES PENSION REFORM
While one proposal won approval in the Senate this week, a very different piece of pension reform legislation passed the Illinois House. The House’s plan would limit Cost of Living Adjustments (COLA) paid to all retirees. A 3% compounded COLA currently granted to retirees has been identified as a major expense driving up the cost of pension benefits. Under HB 1165, retired workers would be limited to a cost of living increase of 3% on the first $25,000 of pension income for persons not covered by social security, and on the first $20,000 for those covered by Social Security. This would translate into no more than $750 for those who do not receive Social Security benefits and $600 for those covered by Social Security.
Annual COLA increases are one of the largest costs to the state’s current retirement systems. Projections show that changing the way in which these increases are calculated could save the state $100 billion by 2045.
LEGISLATION MOVES OUT OF COMMITTEE AHEAD OF DEADLINE
While pension changes stole the show, much of the week was really spent in committees reviewing reviewing hundreds of pieces of legislation in advance of a March 22 deadline to conclude committee review of bills and send them on to the full Senate. The committee reviews are the first step in the legislative process that narrows down thousands of legislative proposals to find those that will ultimately win approval from both the Senate and House and be signed into law by the Governor.
One critical proposal that did not pass out of committee is a much-needed reform of the state's workers’ compensation laws to assure that a genuine tie between the workplace and the injury exists. Illinois has long been plagued by a system in which employers are forced to cover injuries under the workers’ compensation system, even if the injury had little or nothing to do with the employee's job.
Senate Bill 2307 would establish "causation" standards in Illinois that would be used to determine if an injury was actually caused by work conditions or occurred on the job. The lack of such standards has been cited by businesses as a major reason why Illinois' workers' compensation costs are higher than competing states. Even the Illinois Attorney General has issued a report calling for reform, citing the causation issue as a major factor in driving up workers' compensation costs for the state.
SENATE ACTION ROUND-UP
While committees dominated the week's work, several measures did pass the Senate including the following:
EPA Reports (SB 33): Allows the Illinois Environmental Protection Agency (IEPA) to require that drinking water quality test data be submitted electronically rather than filing paper copies.
Gaming Chips (SB 66): Clarifies that gaming chip suppliers can attach their logo (rather than the company name) to chips, supplies and equipment. This codifies actual practice, as most suppliers have used a logo, but a review of statutes found that the law actually required the use of the supplier's name rather than a logo or other distinctive mark.
Nursing Home Notices (SB 1197): All nursing homes must provide written statements on federal asset income disclosure requirements and provide notice that Medicaid can be denied for failure to comply.
Sexually Violent Offenders (SB 93): Allows for sexually violent persons to be temporarily housed in a distinct portion of the Chester Mental Health Center. The temporary housing is needed while permanent facilities at Rushville are undergoing renovations to expand capacity. The temporary housing must be closed by June 30, 2015.
Cook Co. Homestead Exemption (SB 1894): Increases the maximum reduction that may be made in the Senior Citizens Homestead Exemption for Cook County and the General Homestead Exemption. This legislation was introduced because the Alternative Homestead Exemption in Cook County that began in 2003 is beginning to expire.
Additional legislation approved by the Senate and Senate committees can be found at the Senate Republican’s “Senate Action” page at www.senategop.state.il.us.