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Lawmakers OK pension overhaul Bloomington Pantagraph Monday, May 30, 2005 SPRINGFIELD -- Democrats rammed a key piece of the

state budget through the House and Senate late Sunday that will reduce payments to state pension funds to fill a lingering budget gap. In a show of political muscle that included some last-minute horse-trading between Gov. Rod Blagojevich and fence-sitting lawmakers, the plan moved out of the House on a 61-53 vote, with no Republicans on board. The Senate voted 32-26 in favor of the plan, putting the General Assembly on track to avoid a repeat of last year's lengthy overtime session. Supporters say Senate Bill 27 will allow the state to pay about $2 billion less into the state's three largest pension funds over the next two years. That money would then be used to close a $1.2 billion state budget gap and increase funds for schools and health care. State Rep. Robert Molaro, D-Chicago, who sponsored the legislation in the House, said the changes wouldn't affect pension checks for retirees and, because of a series of reforms, wouldn't hurt the state's historically underfunded pension funds. One change will limit the state's cost of covering end-of-career pay hikes for teachers. State Sen. Jeff Schoenberg, D-Evanston, the bill's Senate sponsor, said the changes will save $30 billion over the next 40 years. But, Schoenberg could not say how much the changes would save in the fiscal year beginning July 1 -- a key sticking point for Republicans, who say that represents a raid on the pension funds. "Nothing good has ever come from robbing the pension system. Nothing good is going to come from this," said state Rep. Dan Brady, R-Bloomington. "In my six years in the House, this was the most irresponsible thing this chamber has done," said state Rep. Bill Mitchell, R-Forsyth. "Democrats think that Illinois citizens are on a holiday weekend and won't be paying attention to this. I think they are wrong." Central Illinois Republicans in the Senate were just as opposed to the proposal. "Less than four months ago Gov. Blagojevich touted the necessity for pension reform and emphasized the inherent dangers of raiding the pension system. Now he is doing the very thing he preached to the General Assembly against," said state Sen. Larry Bomke, R-Springfield. In a nod to the days of former Gov. George Ryan, Democrats who were wavering in their support of the plan received promises from the governor's office that some of their pet projects and programs would be funded if they

supported the plan. The governor's office acknowledged that lawmakers wanted some goodies if they were going to put their votes behind the controversial plan. "Knowing that this budget process is one of give and take, the leaders in recent days have brought forward some priorities that they would like to see in the budget," said Blagojevich spokeswoman Rebecca Rausch. Rausch wasn't aware of any specific projects promised by the governor. "Most of them have to do with social services and educational programs, like after-school programs that benefit our children," Rausch said. Lawmakers are set to spend today and Tuesday putting the final touches on the state's $53 billion spending plan. Except for schools and health care programs for the poor, most state spending is expected to remain flat for the budget year beginning July 1.

Pension reform plan zips through Legislature Carbondale Southern Illinoisan Monday, May 30, 2005 SPRINGFIELD - A pension reform package rocketed through the Legislature Sunday despite criticism that it would hurt state employees and taxpayers. The proposal is being touted by Democrats as a way to close the state's 1.2 billion budget shortfall and avoid an overtime session. Proponents estimate the range of savings for the entire program to run from $30 billion to $70 billion. ''We are saving $30 billion to the taxpayers, if you say that's not reform you're mistaken," said state Rep. Bob Molaro, D-Chicago. ''This is good for the taxpayers and good for this budget." Republicans argued that part of the estimated $820 million that would be used to shore up this year's spending plan would be used to bail out the troubled Chicago Transit Authority. ''Our pension funds are now going to the Chicago Transit Authority - nothing to do with the pension system," said state Rep Chapin Rose, R-Mahomet. ''They're going to finance hundreds of millions of dollars in pork expansion in the Chicagoland area, pork projects, and all on the backs of the pensioner and ultimately the taxpayer." The reforms include a moratorium on benefit increases unless extra money can be found. In the meantime, a

taskforce of legislators and unions will look into the future of benefit increases. End-of-career payouts to school teachers would be capped at 6 percent. If schools wanted to dole out more money that additional cost would have to be picked up by the local district. Current teacher contracts would not be effected. Current state university workers and school teachers would also see changes to the money purchase formula. The interest rate would no longer be set by state retirement system officials; it would be set by the comptroller's office. New hires would no longer be able to choose the money purchase option. Downstate teachers and the Teachers' Retirement System would have to pick up the cost of the Early Retirement Option. Local lawmaker reaction to the proposal was split along party lines. State Rep. Mike Bost, R-Carbondale, expects the university workers in his district will be upset over Sunday's vote, as will the taxpayers. ''Whenever I talk to people and explain how long, and how great of a debt this is going to be," Bost said. ''They're not very happy with us." State Reps. John Bradley, D-Marion, Dan Reitz, D-Steeleville, and Brandon Phelps, D-Norris City, support the measure. ''This provides for significant pension reform," Bradley said. ''It's going to take a period of years to get the pension system in line and this is the first step in the process of doing that." Reitz said there were no other options to bring in revenue since the Democrats could not agree on gaming expansion. ''The other good thing about voting for the total pension bill was we were able to add more money to education," Reitz said. ''All in all I think it was a good compromise that the leaders reached." All three representatives discredited the opposition's argument that the holiday would hurt downstate more than Chicago. ''It was used as a political game to try to get us into overtime," Phelps said. ''I know some people say by taking the holiday it's going to put a strain on our future. I don't believe that because I believe the reforms that we made are going to pay for all of that." State Sen. Gary Forby, D-Benton, voted for the legislation. State Sens. David Luechtefeld, R-Okawville, and John O. Jones, R-Mount Vernon, opposed the reform package. Jennifer Miller and Shelby Sebens contributed to this report.

Pension holiday measure advances Champaign News Gazette Monday, May 30, 2005 SPRINGFIELD - The Illinois General Assembly narrowly approved legislation on Sunday to pay $2.3 billion less into the state pension systems over the next two years than would be required under current law. The measure is now on its way to the governor's desk, where he is expected to sign it. The Illinois Constitution guarantees pension benefits, so the "pension holiday" would not affect retirees' payments. It would, however, significantly increase the state's long-term pension debt and would require the retirement systems to sell off more assets in order to make the payments they owe to retirees, said Republicans, who refused to support the bill. "You are mortgaging our future," said State Rep. Bill Black, R-Danville. "You are playing with fire, you are playing with potential bankruptcy of the pension systems." State Sen. Jeffrey Schoenberg, D-Evanston, said such concerns were "unwarranted" and noted that the bill did not change the ultimate goal of having enough assets on hand to pay 90 percent of the pension system's obligations by 2045. That target was part of a 1995 law passed to help the state recover from years of skipped or reduced pension payments, but Senate President Emil Jones, D-Chicago, said the payment schedule set up in that law was "a mistake." "Like a homeowner that has a mortgage, and cannot meet that mortgage payment, will go in and refinance it, we are restructuring the '95 law so that the state can afford to pay the dollars into the pension systems," he said. Some Democrats were less enthusiastic about the plan than others. State Rep. Frank Mautino, D-Spring Valley, said he reluctantly voted yes only because a gaming bill failed to come together and no one could agree on any other revenue sources to balance the budget. "This is hard vote, it is not a good vote, and right now there is no one offering other options," he said. State Rep. Robert Molaro, D-Chicago, who sponsored SB 27, said the bill made some important steps forward. "For the first time in 60 years of the pension systems, we are demanding reforms," Molaro said. "This is good for the taxpayers. It's great for the budget." According to Molaro, the benefit changes included in the legislation would save the state $30 billion or $40 billion in payments over the next four decades, which he said would help balance out the long-term impact to the pension systems. Senate Minority Leader Frank Watson, R-Greenville, warned that the savings would be more like $12 billion over 40 years and that most of that would not be realized until decades from now. The legislation to reduce the state's pension payments for the next two years is the centerpiece of a budget deal Jones and House Speaker Michael J. Madigan, D-Chicago, hope to send to the governor by Tuesday night. After the Tuesday, they will need a three-fifths majority to pass the budget, which would require Republican votes. The Democrat spending plan for the year beginning July 1 would add an extra $300 million for schools, give more money to the Chicago Transit Authority and expand health care coverage for low-income Illinoisans, while closing a $1.2 billion budget deficit. State funding for universities is expected to remain at this year's levels. The House vote on the pension bill on Sunday afternoon was 61 to 53. "This is a good deal because it saves money, helps balance the budget, prevents painful cuts in state services and avoids major layoffs of state employees," said state Rep. Naomi Jakobsson, who voted yes. State Rep. Chapin Rose, R-Mahomet, voted no along with Black. "No effort has been made to reduce government spending, instead we are going to raid the pensions," Rose said. State Rep. Shane Cultra, R-Onarga had an excused absence and did not vote, but told The News-Gazette on Sat-

urday that he did not support the bill. "What we have to do is tighten our belts and either cut spending or raise revenue somewhere else," Cultra said. The bill passed the Senate on Sunday night by a vote of 32 to 26. State Sen. Rick Winkel, R-Urbana; state Sen. Dale Righter, R-Mattoon; and state Sen. Dan Rutherford, R-Chenoa, all voted no. "I don't know how you vote yes and go home and explain that," Winkel said.

Lawmakers OK skipping pension fund payments to balance budget Chicago Sun Times Monday, May 30, 2005 SPRINGFIELD -- A Democratic bid to withhold nearly $2 billion in required payments to employee pension systems to balance the 2006 state budget swept through the Legislature on Sunday, despite Republican comparisons of the deal to a payday loan. On party-line votes, the pension proposal passed the House 61-53 and the Senate 32-26, putting in place the controversial cornerstone of a budget deal struck Thursday by Gov. Blagojevich, House Speaker Michael Madigan (D-Chicago) and Senate President Emil Jones (D-Chicago). "We set out to fundamentally change and reform the way the pension system works. That's what we did," Blagojevich said in a statement after the votes. The plan is built upon a series of pension rule changes the governor and other leaders say will save the state at least $30 billion over the next 40 years. They want to use some of those "savings" upfront during the next two years, in part, to cover the $1.2 billion budget deficit. Among the pension-rule changes voted on was the capping of end-of-career pay hikes for educators at 6 percent annually. Late-career pay increases of as much as 60 percent have exorbitantly boosted educators' tax-funded pensions, a practice that was the subject of a Sunday Chicago Sun-Times expose. The newspaper reported on how the retiring finance director of Adlai Stevenson Township High School District 125 collected lucrative health insurance stipends the last four years, on top of his six-figure salary, to boost his pension to more than $200,000 a year for the rest of his life. "... Is that what we're about? For no other reason, we should vote for this bill to stop that practice," said Rep. Robert Molaro (D-Chicago), the bill's chief House sponsor, waving a copy of the Sun-Times during floor debate. Republicans railed how it will add to the $34 billion underfunding of the state's three biggest pension plans and that future generations will be left holding the bill -- all so Blagojevich can balance the state's books today and avoid an overtime session beginning Wednesday that would empower Republicans. "This is like a payday loan for state government," said Sen. Kirk Dillard (R-Hinsdale). All GOP members opposed

With the administration claiming immediate savings from the reforms, some GOP estimates peg the ultimate cost to the pension funds as high as $87 billion because those savings won't be reinvested in the pension systems and allowed to compound interest. "This is a little like the state using a credit card, charging a little more and a little more, but only making the minimum payment. While we're doing it, the debt keeps getting larger and larger," said Sen. Dale Righter (RMattoon). With Republicans unanimously voting against the plan, the margins were extremely tight in the House, where Madigan spent two days trying to line up 60 of his 65 Democrats to vote for the plan. On Saturday, as many as a dozen House Democrats were prepared to vote against it, but intense arm-twisting by party leaders left only Rep. Kevin Joyce (Chicago) and Rep. Julie Hamos (Evanston) as Democratic no-votes Sunday. Two House Democrats were absent. The bill, which Blagojevich is expected to sign, will not decrease monthly benefits for existing retired state workers, teachers and university employees. Lawmakers and judges, who belong to smaller pension systems, were spared any changes to their lucrative retirement plans.

Balanced budget just passes Pension reforms included, but payments to be skipped Daily Herald Monday, May 30, 2005 SPRINGFIELD Suburban Democrats stuck their political necks out Sunday, voting for a plan to skip nearly $2 billion in pension payments in order to balance the state budget but at the risk of saddling future generations with the tab. Youre breaking into our childrens piggy banks, stealing from kids and schools and the disabled of tomorrow, said state Sen. Dan Cronin, an Elmhurst Republican. You think you can get away with it because the public doesnt understand. Republicans uniformly opposed the plan cobbled together by Gov. Rod Blagojevich and Democratic leaders in the House and Senate, accusing the ruling party of larding up the state budget with $200 million in pet projects and programs in order to get the votes. Democrats said they had no choice after Republicans refused to help fix budget problems. Its the right thing to do, said Senate President Emil Jones Jr., a Chicago Democrat. A handful of suburban Democrats provided the votes in both the House and Senate. State Rep. Jack Franks, a Woodstock Democrat, had criticized skipping pension payments but voted for the plan because of the included

pension reforms. I hate to qualify my statement, but the fact is if it were standing alone, I wouldnt vote for it, the nonpayment, Franks said after the vote, denying hed waffled. I slept on it last night and I feel compelled to (vote yes) just because I think we need these reforms. And without the vote, were not going to get these reforms. The plan cleared the House by two votes. All five suburban Democrats voted for it. A party-line vote in the Senate cleared the way for the General Assembly to adjourn on time by Tuesday night. Among the pension changes are limits to the end-of-career pension sweeteners school boards often handed out to inflate administrators and teachers retirement checks. The new plan limits to 6 percent the final years pay raises, down from 20 percent. Democrats say these and other pension changes will save the state $30 billion, if not more, over the next 40 years and the state can start recognizing those savings now. Thats how they justify shorting the pension system nearly $2 billion over the next two budgets. The move allows them to balance this years budget without raising taxes. This is good for the taxpayers. Its great for this budget, said state Rep. Robert Molaro, a Chicago Democrat who sponsored the pension plan. Republicans roundly criticized the plan as shortsighted and irresponsible, like skipping minimum payments on maxed-out credit cards just because times are tight. This is a payday loan for state government, Hinsdale Republican state Sen. Kirk Dillard said. Republicans doubt those savings will materialize and argue its irresponsible to count them now anyway. There are no real fundamental reforms and there are no real savings, said state Rep. Mark Beaubien, a Barrington Hills Republican. He pointed out the pension changes dont apply to Chicago teachers, whose pension system actually gets $9 million more in state tax dollars while other pension systems are shortchanged. Republicans also said as much as $200 million was being diverted to pay for supporters pet projects. Franks denied he was promised anything. Republicans questioned how lawmakers and judges who enjoy lucrative retirement benefits were exempted from the reforms. I cant answer that right now,

Plan to cut pension payments approved Decatur Herald Review Monday, May 30, 2005 SPRINGFIELD - A pension reform package rocketed through the legislature Sunday despite criticism that it would hurt state employees and taxpayers. The proposal is being touted by Democrats as a way to close the state's $1.2 billion budget shortfall by taking $820 million from the state pension program. Proponents estimate the savings will range from $30 billion to $70 billion in the long run. "We are saving $30 billion to the taxpayers, if you say that's not reform, you're mistaken," said state Rep. Bob Molaro, D-Chicago, the proposal's House sponsor. "This is good for the taxpayers and good for this budget." Republicans argued that part of the estimated $820 million used to shore up this year's spending plan would also be used to bail out the troubled Chicago Transit Authority. "Our pension funds are now going to the Chicago Transit Authority - nothing to do with the pension system," said State Rep. Chapin Rose, R-Mahomet. "They're going to finance hundreds of millions of dollars in pork expansion ... and all on the backs of the pensioner and ultimately the taxpayer." The reforms include a moratorium on benefit increases unless extra money can be found. In the meantime, a task force of legislators and unions will look into the future of benefit increases. End-of-career payouts to schoolteachers would be capped at 6 percent. If schools wanted to dole out more, that additional cost would have to be picked up by the local district. Current teacher contracts would not be affected. Current state university workers and schoolteachers also would see changes to the money purchase formula. The interest rate would no longer be set by state retirement system officials; it would be set by the comptroller's office. New hires would no longer be able to choose the money purchase option. Downstate teachers and the Teachers' Retirement System would have to pick up the cost of the Early Retirement Option. Local lawmaker reaction to the proposal was split along party lines. State Rep. Bob Flider, D-Mount Zion, voted in favor of the proposal. "This provides for an opportunity to reform the pensions in a way that will save $70 billion over the life of the reforms," Flider said. The representative said the General Assembly's failure to adequately fund pensions in the past is the reason the system needs reform.

State Rep. Bill Mitchell, R-Forsyth, balked at the proposal dumping more money into the Chicago public school teachers' retirement fund. "How do you tell the teachers in Macon County in Decatur that we can't fully fund their pension, but we can the Chicago teachers? That's what this General Assembly did," Mitchell said. State Rep. Roger Eddy, R-Hutsonville, said Democrats such as House Speaker Michael Madigan, D-Chicago, supported the measure in order to avoid an overtime session, which would give Republicans more say over the budget. "Desperate times call for desperate measures, and this is desperation by a party that obviously has shown that it can't govern," Eddy said. "(Madigan) wanted to erase that perception, by showing that he could." Senate Minority Leader Frank Watson, R-Greenville, opposed the legislation as well as Sens. Bill Brady, R-Bloomington, and Dale Righter, R-Mattoon.

Lawmakers OK pension cuts Peoria Journal Star Monday, May 30, 2005 SPRINGFIELD - Both the Illinois House and Senate narrowly approved a bill Sunday to divert more than $2.3 billion from state pensions over the next two years so it can be used instead to finance other state programs. The House voted 61-53 to approve Senate Bill 27, just one vote more than the minimum needed for passage. The Senate voted 32-26. In both chambers, the vote split nearly along party lines, with Democrats supporting the bill and Republicans voting against it. "You are playing with fire. You are playing with potential bankruptcy of the pension system," said Rep. Bill Black, R-Danville. "We are mortgaging all of our tomorrows for the expediency of adjournment by May 31." But Democrats said there were no options left for closing a $1 billion plus budget hole without making substantial cuts to state programs. "This is a hard vote. It is not a good vote and right now, there is no one offering any other options," said Rep. Frank Mautino, D-Spring Valley.

No Republicans voted for the bill in either the House or Senate. Two Democrats - Kevin Joyce of Chicago and Julie Hamos of Evanston - voted against the bill in the House. No Democrats voted against the bill in the Senate. Under this legislation, about $1.2 billion that was supposed to be deposited in the five state-funded pension systems after July 1 instead will be used for other programs. An additional $1.1 billion will be diverted next year. The money was intended for pensions covering downstate teachers, state and university workers, judges and lawmakers. Republicans said the long-term cost of the diversions will be $30 billion or more. "For every dollar we get from the systems today, the cost is $11 to pay it back," said Rep. Chapin Rose, R-Mahomet. "It's like Wimpy from Popeye. I'll gladly pay you Tuesday for a hamburger today." 'Demanding reforms' However, Rep. Robert Molaro, D-Chicago, said the diversions come with pension benefit changes that will save $30 billion in coming decades. Among those changes are limiting the amount of end-of-career teacher raises that the state will cover with pensions, changing the way interest is determined on the money purchase retirement option offered to university employees, limiting the number of state employees who qualify for the more lucrative alternative pension formula and requiring future pension enhancements to be fully funded. "For the first time in the 60 years of the pension systems, we are demanding reforms," Molaro said. "We are making real reforms," said Rep. Jay Hoffman, D-Collinsville. "Is that what this is all about? Do you (Republicans) want to push us into overtime?" Last year, the General Assembly ran a record 54 days into overtime. Gov. Rod Blagojevich said he thought Republicans were stalling budget talks in hopes of forcing an overtime session where they would have greater clout. Rep. Mark Beaubien, R-Barrington Hills, said the reforms don't require any changes in the pension systems for state employees, judges and lawmakers. The bill eliminates the reforms proposed by Blagojevich that would have saved the most money, Beaubien said. "There are no real fundamental reforms," Beaubien said. "There are no real savings." Republican unrest Republicans repeated their charge that Blagojevich and House Speaker Michael Madigan, D-Chicago, essentially bought votes for the plan by promising pork projects or increased state spending for specific programs. House Republican Leader Tom Cross, R-Oswego, said the size of the diversion increased by $200 million as Madigan worked to line up votes for it. "That is outrageous, and I can't imagine that people want to let that go on," Cross said. Blagojevich spokeswoman Rebecca Rausch said the administration has agreed to several "memorandums of understanding" about items that will be included in the budget. The memorandums were not made public Sunday.

"As the budget process progressed this year individual members discussed various programs and initiatives with their leaders," Rausch said. "Most of these surround social and educational programs that benefit our youth. This is a process of give and take. We reviewed these requests, and we agreed." Madigan and Senate President Emil Jones, D-Chicago, brought the requests to Blagojevich. "Most of the priorities the leaders brought to us occurred in the last few days," Rausch said. Changing sides Rep. William Delgado, D-Chicago, initially opposed the plan but voted for it Sunday. He said he received an agreement that some after school programs and new immigrant services programs will be funded. "I wasn't going to (be able to) stop the bill," Delgado said. "I wasn't going to be the obstacle to other programs that are very important to us in terms of funding for social services." Joyce - one of the two House Democrats to vote "no' on the bill - said Madigan tried to persuade him to vote for the legislation. "I just think it's fiscally wrong to put this off," Joyce said. "It's tough to go against your leader, but sometimes you have to stand by your convictions and do what you think is right."

Pension holiday passes Rockford Register Star Monday, May 30, 2005 SPRINGFIELD -- After sweetening the deal by freeing up more cash for state spending, Democrats advanced their plan Sunday to balance the state's budget by skipping payments to public pension systems. The move could saddle taxpayers with billions in long-term debt, but it put the Democrat-controlled Legislature on track to finish its spring session by Tuesday. Come June, Democrats can't implement a spending plan without GOP support. The Democrats approved the plan to cut pension payments -- 61-53 in the House, 32-26 in the Senate -- after hiking the total reduction from $2.1 billion to $2.3 billion over two years, effectively giving legislators $200 million more to spend on other concerns. Republicans accused Democrats of cultivating support with the promise of pork-barrel projects financed with that $200 million. "If you have intelligence above plant life, you can figure out what happened because all of a sudden we got the necessary votes," said Rep. Jim Sacia, a Pecatonica Republican who voted no.

Democrats said the extra cash was necessary to help close an estimated deficit of $1.2 billion. Still, Rep. Chuck Jefferson of Rockford acknowledged that it made the package more attractive. "It gives us the ability to do more things in the line of service to agencies that otherwise might have been on the verge of being cut back," said Jefferson, who joined his fellow Democrats in supporting the plan. The Rock River Valley's other legislators -- Sens. Dave Syverson of Rockford, Brad Burzynski of Clare and Todd Sieben of Geneseo, and Reps. Dave Winters of Shirland and Ron Wait of Belvidere -- opposed it. All are Republican. Lawmakers of both parties agree that skipping payments increases the state's long-term liability because interest will not be earned on money not invested.

Pension diversion plan passes House, Senate narrowly OK contentious bill State Journal Register Monday, May 30, 2005 The Illinois House and Senate narrowly approved a bill Sunday to divert more than $2.3 billion from state pensions over the next two years so it can be used instead to finance other government programs. The House tally on Senate Bill 27 was 61-53, just one vote more than the minimum needed for passage. The Senate vote Sunday night was 32-26. In both chambers, the vote split nearly along party lines, with Democrats supporting the bill and Republicans against it. "You are playing with fire. You are playing with potential bankruptcy of the pension system," warned Rep. Bill Black, R-Danville. "We are mortgaging all of our tomorrows for the expediency of adjournment by May 31." But Democrats said there were no options left for closing a $1 billion-plus budget hole for the fiscal year that begins July 1 without making substantial cuts to state programs. "This is a hard vote. It is not a good vote, and right now, there is no one offering any other options," said Rep. Frank Mautino, D-Spring Valley. No Republicans voted for the bill in either the House or Senate. Two Democrats - Kevin Joyce of Chicago and Julie Hamos of Evanston - voted "no" in the House. No Democrats voted against the bill in the Senate. Under the bill, about $1.2 billion that was supposed to be deposited in the five state-funded pension systems after July 1 instead will be used for other programs. An additional $1.1 billion will be diverted the following year. The money was intended for pensions covering downstate teachers, state and university workers, judges and lawmakers. The diversion of funds won't reduce retirees' monthly checks but will increase the state's long-term debt.

Republicans estimated the eventual cost at $30 billion or more. "For every dollar we get from the systems today, the cost is $11 to pay it back," said Rep. Chapin Rose, R-Mahomet. "It's like Wimpy from 'Popeye.' I'll gladly pay you Tuesday for a hamburger today." However, Rep. Robert Molaro, D-Chicago, said the diversions come with pension-benefit changes that will save the state $30 billion in coming decades. Among those changes are limiting the amount of end-of-career teacher raises the state will cover, changing the way interest is determined on the money purchase retirement option offered to university employees, limiting the number of state employees who qualify for the more lucrative alternative pension formula, and requiring future pension enhancements to be fully funded. "For the first time in the 60 years of the pension systems, we are demanding reforms," Molaro said. "We are making real reforms," added Rep. Jay Hoffman, D-Collinsville. "Is that what this is all about? Do you (Republicans) want to push us into overtime?" Last year, the General Assembly ran a record 54 days into overtime as legislative leaders tried to reach a budget compromise. Democratic Gov. Rod Blagojevich had said he thought Republicans were stalling this year's budget talks in hopes of forcing another overtime session where they would have greater clout. Rep. Mark Beaubien, R-Barrington Hills, noted that the Democrats' reforms don't change anything in the pension systems for state employees, judges and lawmakers. The bill passed Sunday eliminates pension changes proposed by Blagojevich that would have saved the most money, Beaubien said. "There are no real fundamental reforms," Beaubien said. "There are no real savings." Republicans repeated their charge that Blagojevich and House Speaker Michael Madigan, D-Chicago, essentially bought votes for the pension plan by promising pork projects or increased spending for specific programs. House Republican Leader Tom Cross of Oswego said the size of the diversion increased by $200 million as Madigan worked to line up votes for it. "That is outrageous, and I can't imagine that people want to let that go on," Cross said. Blagojevich spokeswoman Rebecca Rausch acknowledged that the administration has agreed to several "memorandums of understanding" about items that will be included in the fiscal 2006 budget. The memorandums were not made public Sunday. "As the budget process progressed this year, individual members discussed various programs and initiatives with their leaders," Rausch said. "Most of these surround social and educational programs that benefit our youth. This is a process of give and take. We reviewed these requests, and we agreed." Madigan and Senate President Emil Jones, D-Chicago, brought the requests to Blagojevich. "Most of the priorities the leaders brought to us occurred in the last few days," Rausch said. Rep. William Delgado, D-Chicago, initially opposed the pension bill but voted for it Sunday. He said he was assured that some after-school programs and new immigrant-services programs will be funded.

"I wasn't going to (be able to) stop the bill," Delgado said. "I wasn't going to be the obstacle to other programs that are very important to us in terms of funding for social services." Joyce - one of the two House Democrats to vote "no" - said Madigan tried to persuade him to support the legislation. "I just think it's fiscally wrong to put this off," Joyce said. "It's tough to go against your leader, but sometimes you have to stand by your convictions and do what you think is right." Sunday's vote puts into place a key part of a budget plan that should allow lawmakers to finish their work by Tuesday's constitutional deadline. The actual state spending plan could be presented to lawmakers as early as today. Tuesday is the deadline for enacting a new budget if lawmakers want to avoid having to muster a three-fifths majority to pass it.

High cost of deferring pension payments Daily Herald Sunday, May 29, 2005 Were damning our grandkids. With those words in February, Steve Brown, spokesman for Illinois House Speaker Michael Madigan, a Chicago Democrat, criticized past legislative decisions to ignore pension contributions and spend money elsewhere. Fast forward to the end of May, with the legislative session set to close. The Democrats, including Madigan, are in control and ready to do the same thing all over again. As a way to fix the current budget problems, the Democratic leadership is ready to push through a proposal to pass as much as $1.1 billion in pension debt onto future generations. The state would skip part of next years payment into its employee pension system and use the money to fill a $1.2 billion hole in the budget. The Democrats say they also will pass some changes to future pension benefits to save money over time. But not paying the debt now pushes the burden into the future to the tune of about $13 for every dollar not paid this year. Its a mistake and they know it. That is why the states leading Democrat, Gov. Rod Blagojevich, said in his February budget address that not paying the pension debt is akin to irresponsible credit card use. So what happens? The principal goes up, the interest rate goes up and the monthly minimum goes up. Its exactly what the state of Illinois has been doing year in and year out. So much for reform. Apparently, Blagojevich has thrown in the towel and decided he must do what others have

done, despite his dire warnings of just a few short months ago. Republicans, on the other hand, are saying all the right things now. Financially, its one of the worst things we can do as a state. I cant imagine that were going down this road, said House Republican leader Tom Cross of Oswego in a Daily Herald article Friday. The GOP leaders were banking on gambling expansion just like the Democrats but that seems dead thanks to Mayor Richard M. Daleys remarks that the city should get a casino as part of any expansion. But Republicans have yet to come up with something else to deal with the current budget woes. So, its the end of May. The clock is winding down on another legislative session. The politicians want to avoid overtime, like last years two-month embarrassment, and they throw out the old tried-and-true method of just not living up to the states obligations. Let someone else worry about the consequences. Weve got a budget to approve and we need the money and no one is coming forward with another idea. Grandkids, be damned.

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