Illinois lawmakers expressed skepticism Wednesday that they'll be able to pass a new pension fix this spring, despite pressure from Gov. Bruce Rauner and major credit rating agencies to quickly replace a 2013 overhaul the state Supreme Court struck down.
The court last week ruled the plan to address Illinois' worst-in-the-nation public-pension shortfall by reducing benefits was unconstitutional, sending lawmakers back to square one on an issue that has dogged them for years.
On Wednesday, House lawmakers held their first hearing on the Republican governor's proposed solution, and Rauner and Senate President John Cullerton met to discuss a separate plan Cullerton is floating.
But Rep. Elaine Nekritz, the Democratic chairwoman of the House pension committee, called the odds of a deal before the session ends May 31 "slim."
"You don't just slap these things together," said Nekritz, noting that the 2013 deal took years to negotiate.
Illinois' five public-pension systems are short more than $100 billion of what's needed to pay out benefits as promised, largely because lawmakers for years didn't make the state's contributions. The payments now are taking up roughly one-fifth of the state's general revenue fund, with next year's payment reaching about $7 billion.
Major credit rating agencies already have given Illinois the worst rating of any state in the nation. Moody's Investors Service this week downgraded to junk bond status the credit rating for the city of Chicago and its public school district, citing the court's ruling and the city's own deep pension debt. The agencies also have warned that the ruling puts additional pressure on the state to find a solution.
Rauner has said approving another overhaul is "essential" and that he believes it can be done before the end of the month.
He wants to allow state workers and retirees to keep the benefits they've already earned but move them to a less-generous plan going forward that he says would save the state $2.2 billion next year. He also wants to put a constitutional amendment on the 2016 ballot that would allow future pension benefits to be cut, in hopes of heading off any future lawsuits from labor unions or retirees.
Cullerton is reviving a plan he floated in 2013, but with some adjustments. His proposal could offer state workers a choice between keeping annual cost-of-living increases in retirement and counting future pay raises when calculating their retirement benefits. His office estimates the plan would save about $1 billion in the first year.
Both Cullerton and Rauner believe their proposals would be found constitutional, though others have expressed doubt that anything short of raising taxes to keep current benefit levels in place would pass the court's muster.
Labor unions, which sued along with retirees and other groups to get the 2013 law thrown out, supported Cullerton's plan when he first proposed it. But armed with the court's unanimous decision, they're no longer saying they back it.
Even so, Cullerton said he believes his proposal has the best chance of getting the Legislature's approval because it's been considered before and the Senate passed it in 2013. He said he's willing to push the legislation through in the next few weeks, but he needs the governor's support before calling it for a vote.
Rauner's office said the governor is willing to consider other options, but didn't comment specifically about Cullerton's plan.
Democratic Rep. Art Turner of Chicago, who was a member of the special bipartisan committee that helped craft the 2013 law, also said he believes it will take a while to get consensus on a solution.
"It's going to be an uphill battle," he said.