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Illinois Lawmakers at Odds with Madigan over Proposed Pension Shift

A plan to shift the cost of teacher pensions from the state to local school districts became the most hotly debated topic in Springfield on Tuesday.

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With the clock ticking on the current legislative session in Springfield, Illinois lawmakers are scrambling to find a solution to the state's massive shortfall in the Teachers' Retirement System (TRS).

The most hotly debated topic in the Illinois General Assembly on Tuesday was a plan to gradually shift pension liabilities from the state to local school districts, universities and colleges. The proposal is part of Senate Bill 1673, a pension bill backed by House Speaker Michael Madigan (D-Chicago).

An Illinois House committee voted 6-3 to send the proposal to the House before Thursday's adjournment deadline, NBC Chicago reports.

House Republican Leader Tom Cross of Oswego slammed Madigan and the proposed shift, calling it a "poison pill" to kill pension legislation. The state should take responsibility for the pension shortfall, Cross said, not teachers, school districts and taxpayers.

"Maybe you, Mr. Speaker, need to take responsibility for your actions," Cross said. "For the last 40 years you have had your fingerprints on the mess we have today."

Madigan defended his position after Cross spoke on the House floor, according to an NBC Chicago report.

"There is a concept in America that we all try to live under, which is called responsibility," Madigan said of the proposed pension shift.

Illinois currently has an $83 billion unfunded pension liability—$44 billion of which is from the TRS. The state has to come up with $5.1 billion for pensions next year, the Associated Press reports.

Local officials have slammed the proposed shift, saying it would have a "significant negative effect" on and .

District 61 makes its staffing commitments in March, so if the plan were to role out by July 1, Superintendent Bob Carlo said the district would have no choice but to pull from its fund balance.

"It would jeopardize the future financial position of the district," he said. Carlo noted that the district works hard to remain fiscally responsible, completing remodeling projects at and with money it has saved.

Carlo said it could cost District 61 as much as $1.9 million, based on last year's figures, to take on the state's share of pension liabilities. 

District 63 Superintendent Kerry Foderaro said that even though his district is small, proportionally the burden would be just as significant. His district would have to pay out more than $400,000.

"We would not be able to just write a check for that year after year," he said. 

Foderaro estimated the district would have to eliminate between six and eight staff members whose salaries fell on the higher end of the spectrum to pay the bill. Because of the district's small size, cutting staff is the equivalent of cutting programs, he said.

"The taxpayers are the ones getting hurt," he said. "They're still paying the same in taxes but getting less from the government."

If legislators were to adopt the plan, school districts could begin seeing the effects immediately. 

The current legislative session ends Thursday, May 31.

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Rich Brandeis June 01, 2012 at 05:03 PM
I love Mr. Madigan's comment: "There is a concept in America that we all try to live under, which is called responsibility," You are absolutely correct Sir. The State is responsible for the multi-billion dollar shortfall in the pension funds. You borrowed against it to fund other wasteful spending bills. We the voters are watching very carefully Mr. Speaker. We will hold accountable any lawmakers who attempt to sidestep these bills and pass them off at the expense of the quality of future education in our schools.

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