No Vote on Madigan's Pension Proposal

House Speaker Michael Madigan introduced a plan Friday to use the Corporate Personal Property Replacement Tax to address a massive shortfall in the Teachers' Retirement System.

A proposal by House Speaker Michael Madigan (D-Chicago) to divert billions of dollars from local taxing bodies to the massively underfunded Teachers' Retirement System did not go to vote Wednesday, the Associated Press reports.

Madigan added three amendments to House Bill 3637 on May 11, which would allow the state to tap into the Corporate Personal Property Replacement Tax to help cover teacher pensions.

Under the proposal, local governments—including municipalities, schools, libraries and park districts—could lose as much as $1.4 billion from the CPPRT, a 2.5 percent tax on corporations that is collected by the state and earmarked for local governments.

The amendments were scheduled to be discussed during a House Executive Committee meeting Wednesday afternoon, but ultimately were not considered. However, they could come up for discussion again in the future, according to Joe McCoy, legislative director for the Illinois Municipal League.

"Despite the lack of movement, however, we strongly recommend that local leaders continue to press their legislators to oppose the diversions," McCoy wrote on the IML website. "It is always possible that the amendments could be considered at a later date."

A Madigan aide told the Associated Press on Wednesday that the idea was introduced for discussion purposes, but the effect "was to mobilize mayors and city managers from every corner of Illinois."

Read more: Illinois speaker targets local money for pensions

Illinois currently has an $83 billion unfunded pension liability—$44 billion of which is from the Teachers’ Retirement System (TRS). The state has to come up with $5.1 billion for pensions next year.

One of the most talked about scenarios involves the , which administrators and board members believe will inevitably end up on the backs of taxpayers. 

McCoy said the purpose behind Madigan's proposal was to bring up an idea so unpopular, people might start to embrace the shift to school districts.

Officials from and said the shift would cost each district more than $730,000 annually.

"If this plan were to pass, it would be detrimental not only for schools in Lemont, but for almost all schools across the state,” District 113A Interim Superintendent Robert Madonia said. “District 113A and many other school districts have already made dramatic cuts. We simply cannot afford this; it would destroy public education.”

This week, local officials said Madigan's proposal would severely impact the ability of local governments to provide services to their constituents.

Lemont taxing bodies received the following CPPRT disbursements between July 2010 and June 2011, according to the Illinois Department of Revenue:

  • : $34,252.21
  • : $19,207.06
  • : $66,224.42
  • : $210,390.94
  • : $347,848.43
  • : $398,911.41
  • Lemont Township Road and Bridge: $20,571.45

"Like the potential shift of the state's responsibility of TRS pension payments to local school districts, Speaker Madigan's proposal would have a negative impact on school districts across the state, including Lemont High School District 210," said Tony Hamilton, director of school and community relations for District 210. "Over the past three years, we've been allotted an average of more than $350,000 annually. That revenue is important to District 210, as it is to school districts and other government entities across the state."

On Monday, Lemont Mayor Brian Reaves said he has already written letters to State Rep. Jim Durkin (R-Western Springs) and Senate Minority Leader Christine Radogno (R-Lemont) regarding Madigan's proposal, and urged residents to do the same.

The state's budget deadline is May 31.

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