Madigan Drops Plan to Shift Pension Costs to School Districts

UPDATED: June 4, 5:50 a.m.

Illinois House Speaker Michael Madigan (D-Chicago) on Wednesday dropped his controversial proposal to shift the costs of teacher pensions from the state to local school districts, universities and community colleges.

The announcement came after two days of spirited debate in both the House and Senate. The General Assembly adjourned without passing any legislation for pension reform.

Madigan's plan, which was part of Senate Bill 1673, was widely criticized by Republicans, and threatened to derail other legislation to address the state's massive pension shortfall.

Madigan said he reached the decision after Gov. Pat Quinn asked him to drop the amendment, the Associated Press reports.

“He agrees with the Republicans. He thinks that we ought to remove the issue of the shift of normal cost out of the bill,” Madigan told the House on Wednesday night. “I disagree with the governor, but he is the governor. This is his request.”

Quinn's request was a shift from his previous position. Jerry Stermer, the governor's budget director, told Illinois Statehouse News that "forcing school districts and colleges to pay employees' retirement benefits is the responsible thing to do" since school boards negotiate teachers' pay.

Stermer added that the governor would support anything that could fix the state's unfunded pension liability.

The bill was handed over to House Republican Leader Tom Cross of Oswego, who slammed Madigan on Tuesday, calling his proposal a "poison pill" to kill pension legislation.

Plans to remove Madigan's amendment will be considered by a House Panel on Thursday, the Chicago Tribune reports.

Illinois currently has an $83 billion unfunded pension liability—$44 billion of which is from the Teachers' Retirement System.

With the cost-shift language off the table, lawmakers could vote on a comprehensive pension reform plan before the legislative session ends Thursday night.

Prior to Wednesday's announcement, officials in and spoke out publicly against Madigan's proposal and .

The shift would have cost the two districts each more than $730,000 annually, officials said.

District 113A Interim Superintendent Robert Madonia reacted to the news via email Thursday.

"I think (Madigan) heard a loud and clear message from his constituent base that this is the responsibility of the state and since the state did not pay their obligation in the past they should not be making school districts, and in the end taxpayers, pay for their mistakes," Madonia said.

District 210 Superintendent Sandra Doebert said she is "cautiously optimistic" about lawmakers dropping the cost-shift.

"As I have said all along, it is unfair for the legislature—which created the equation for its portion of TRS, established the increases in COLA (cost-of-living adjustment), and for many years did not to meet its own financial obligations under the system it established—to give the responsibility for those payments to school districts with no funding source, especially when they were reducing state revenue to schools at the same time," Doebert said in an email Thursday.

"While the main points are being publicized, the details of the new legislation are unknown," she said. "Often, 'the devil is in the details.' I am happy that it appears that this shift has been dropped at this time, but before I can fully respond to this legislation, I believe all the details must be seen and understood."

Doebert also thanked Senate Minority Leader Christine Radogno (R-Lemont), Rep. Jim Durkin (R-Western Springs) and House Minority Leader Tom Cross (R-Oswego) for speaking out against Madigan's plan.

"All three of these legislators have been very responsive, and they consistently seek all information and viewpoints with regard to pending legislation." Doebert said. "Our administrative team has communicated with them concerning this issue several times, as I am sure other superintendents have done. I greatly appreciate their consideration of the concerns that we proposed to them."

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