Pension update

Colleagues

It appears there will be no action on pensions until August, at the earliest.

The state’s top lawmakers announced Thursday that they are waiting at least five weeks to resume talks aimed at developing pension legislation.

Following a two-hour, closed-door meeting in Chicago, legislative leaders announced they remain stuck on the issue of whether the state should continue to contribute to employee pensions, or whether the cost should be shifted to local school districts.

Speaker Madigan is a proponent of the “cost shift,” saying local districts have been enjoying a “free lunch,” paid for by the state. He says decisions that determine the size of an educators’ pension, and how much the state will contribute to that pension, are made by local school boards, with the legislature having no say in the matter.

Republican legislators in particular have refused to sign on to any pension proposals that call for the shift, saying that forcing districts to take on new costs would cause a local tax increase.

Meanwhile, Gov. Quinn’s office earlier this week released balances in districts’ “rainy day” funds across the state. Though the governor claimed the money on hand was enough to cover the cost of shifting pensions to school districts, school administrators noted the great disparity in funds from district to district, pointed out that the numbers were from a year ago and argued that those numbers didn’t reflect the past year’s underfunding from the state.

The governor promised to provide additional data prior to the next leaders meeting.

Please check the IEA website for new information about pensions and other Association news.