Politics & Government

Political Rewind: Lawmakers Look for Pension Loophole Fix

It's always good to be caught up on state politics. Here's an easy guide to what happened this week.

Editor's Note: This article was created by aggregating news articles from Illinois Statehouse News that were written by various Illinois Statehouse News reporters.

Work continues on casino compromise

It’s a sure bet that gaming expansion will come up during the Illinois Legislature’s fall veto session, but who will win and who will bust is uncertain.

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A plan to add five casinos throughout the state, expand the number of places where people can make betsat each casino, and allow video gambling at horse tracks eked out of the Legislature this spring but stalled in the face of opposition from Gov. Pat Quinn. 

Quinn has criticized the legislation repeatedly, calling it “top heavy.” 

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“The bill that they have proposed has many, many defects, and it needs to be improved substantially," Quinn said earlier this week. "I’m going to speak about this later this month, and we’ll lay out some principles that I think ought to be used for the Legislature when it comes to gambling.” 

Lawmakers will return Oct. 25 to the state Capitol for the start of the two-week veto session. 

State Sen. President John Cullerton, D-Chicago, has put a temporary hold on the gaming legislation, preventing it from going to Quinn, who could reject part or all of the package.

Lawmakers look for pension loophole fix

Illinois lawmakers are trying to close pension loopholes — they created — that are allowing union leaders to cash in on public pensions.

Legislation from state Sen. Matt Murphy, R-Palatine, and House GOP Leader Tom Cross, R-Oswego, targets these labor leaders who are collecting taxpayer-guaranteed pensions based on the time and salary they acquired while working for their unions. 

Dave Commerford, spokesman for the state's largest teachers' union, the Illinois Federation of Teachers, or IFT, said the union is "reviewing the legislation and has no further comment at this time." Calls to the teachers' union Illinois Education Association, or IEA, were not returned.  

Murphy's proposal, Senate Bill 2499, takes action against education union leaders with the IFT and IEA as well as the Illinois Association of School Board, an organization that helps school boards with professional development and is indirectly funded by taxpayers. The proposal seeks to prevent the leaders from using their jobs with the unions or association to pad a pension they earned inside a classroom or school building.

Illinois taxpayers kick in $400 million for teachers’ pensions

Some Illinois taxpayers are being asked to shell out more for teachers’ retirement payments than others.

A new study by the Illinois Policy Institute, a free market think tank, said teachers in 416 of Illinois’ 867 school districts, not including Chicago, didn’t contribute anything to the Illinois Teachers’ Retirement System, or TRS, for the 2009-2010 school year. The report added that 139 school districts paid a portion of teachers’ contributions to TRS for the 2009-2010 school year. Teachers in the remaining 312 school districts contributed to TRS directly from their paychecks. TRS required the following contributions to the pension fund based on teacher salaries:

  • Teachers giving 9.4 percent;
  • State giving a matching contribution of 9.4 percent;
  • School districts giving 0.58 percent.

Teachers can have their school districts cover their TRS contributions through contract negotiations with local school boards. In total, 554 school districts pitched in $400 million for teachers’ pensions during the 2009-2010 school year, according to the institute's report. 

The policy institute said it is highlighting this practice now because of the severe underfunding of the pension system. TRS has an unfunded liability — how much money a pension system falls short of to pay current and future pensions — of $39.8 billion, or about 51 percent of what it needs to pay current and future pensions.

Illinois adds jobs, but unemployment rolls continue to grow

The extent of Illinois’ job loss this summer depends on who is speaking and how they are defining jobs.“We’ve lost 100,000 jobs in the last few months,” said Illinois House Minority Leader Tom Cross, R-Oswego, at an event in Chicago last week in response to Democratic Gov. Pat Quinn’s claims that Illinois’ economy is rebounding.

Cross said tax hikes are to blame for driving away businesses and jobs. In January, Illinois raised its corporate tax rate by 45 percent, from 4.8 percent to 7 percent, and its personal income tax rate by 67 percent, from 3 percent to 5 percent.

But the Illinois Department of Employment Security, or IDES, said Illinois only lost 10,200 jobs between June and August. In fact, the state has netted a total of 36,000 jobs since January of this year, according to IDES.

Sara Wojcicki, spokeswoman for Cross, said the House Republican leader was using statistics from theIllinois Policy Institute, or IPI, a free market think tank. IPI’s statistics are based on a report by the U.S. Department of Labor showing the number of employed in Illinois has dropped by nearly 100,000 since January.

Comparing the number of unemployed to the number of jobs in the state is like comparing apples and oranges, Greg Rivara, IDES spokesman, said.





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