Illinois Pension Bill Breakdown - News and Weather For The Quad Cities -

Illinois Pension Bill Breakdown

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Illinois lawmakers head back to Springfield on Wednesday for a special pension legislative session.

There are two competing bills in the state's capitol.

Both would save taxpayers millions, but both do it in very different ways.

The big number Illinois has to deal with is $100 billion.

That's the total amount the state will have to pay for its retirement systems if nothing changes.

It's money the state does not have, it would have to raise taxes or take money from someplace else in the budget to pay that bill.

That's why there is a push to change something.

What that change looks like depends on which part of the General Assembly you happen to be standing in.

House speaker Michael Madigan and Senate president John Cullerton have two plans.

Both have passed out of their own chamber, but stalled across the hall.

Madigan's pension fix works like this:

It would raise the retirement age to 67 for new retirees, delaying their ability to qualify for a pension.

Employees would have to contribute more money into the plan and the big point, it would limit the current annual three percent cost of living increases, which are one of the biggest drivers of growing pension liability.

Cullerton's plan over in the senate would also have employees pay more of their salary into the pension system.

His plan offers a deal with employees, they can choose to keep their annual three percent cost of living raises and give up their state subsidized health insurance.

Or, they can choose a cost of living raise that's lower and keep their state subsidized health insurance.

The reason for that deal is the Illinois Constitution says public employee pensions are considered a contract, the benefits of which shall not be diminished or impaired.

Cullerton's choice has the support of the unions and is considered to have the best chance of standing up to a potential lawsuit.

So why can't lawmakers agree on either bill? When you crunch the numbers, neither plan saves the same amount of money.

Madigan's plan would save two billion on pension costs each year.

Cullerton's would save $800 million each year, less money because of the options for members.

Madigan's plan would eliminate the entire $100 billion shortfall over 30 years.

Cullerton's would eliminate 90 percent over 30 years.

Leaving Illinois still owing $10 billion.

How does all this affect you?

Illinois raised income taxes by 67 percent in 2011, the tax increase is supposed to expire at the end of 2015, but all the money it has raised has gone to pensions.

Without a fix, it's tough to see lawmakers letting that tax hike expire.

The state is already seeing its budget hurt by pensions, school districts are the most noticeable.

They're only getting 89 cents of every dollar the state is supposed to pay up.

Some state lawmakers are also pushing a third option.

Changing to a 401-k system, rather than a pension plan.

The Illinois Policy Center estimates switching to a 401-k system would trim half of the state's unfunded pension bill right away.

However, critics say it would leave current state retirees without anyone paying into the retirement system.

Still leaving the state searching for a way to pay for pensions.

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