Lawmakers push off pension talks for 5 more weeks

CHICAGO (AP) — Top Illinois lawmakers put off the state’s most pressing financial issue yet again Thursday, as negotiations on pension reform delved into a discussion on school funding equality.

During a two-hour, closed-door meeting, legislative leaders appeared to make no headway on their major sticking point of who should pay for the retirement costs of suburban and downstate school districts. They’ve been trying to reach an agreement after the General Assembly failed to adopt a plan during their spring legislative session to address the growing $83 billion in unfunded pension liability.

Gov. Pat Quinn and House Speaker Michael Madigan, both Democrats, say they want a comprehensive plan that includes shifting the costs from the state to local districts. But the top House and Senate Republicans and Senate President John Cullerton want Quinn to call lawmakers back into session and pass a widely supported reform plan while continuing to discuss schools as a separate issue.

On Thursday, Republicans asked for more time to study schools as it relates to the equity of state funding. Both sides told reporters that they’ll take at least five more weeks before meeting again on pensions.

"If we’re going to shift any kind of cost, these schools need to be given the tools to handle that additional responsibility," said Senate Republican Leader Christine Radogno. "All that will be part of the discussion."

Madigan disagreed, saying the key issue was ending what he called a "free lunch" for school districts. Currently, the state pays the employer’s portion of pension costs for downstate and suburban Chicago schools. Chicago Public Schools, the state’s largest district, pays its own.

"Local officials are making spending decisions but they’re not paying the bill. That’s not a good thing to tolerate," Madigan said.

Both parties have accused the other of using stall tactics in an election year. The pension issue was contentious during the legislative session and is opposed by unions.

Madigan said refusing to include the cost shift and asking for more information on school funding was Republicans’ attempt to delay until after the Nov. 6 election. Republicans said that including the major issue of shifting schools costs in a pension reform package was a way to delay on Democrats’ part.

The economic impact of shifting pension costs has been widely debated. The Illinois State Board of Education released numbers this week showing that many school districts don’t have the ability to absorb more costs. And though Quinn insists that there will be no impact on property taxes, schools experts say it’s difficult to come up with accurate figures as the issue is constantly changing and complex.

One thing both sides agree on is the urgency of the problem. Credit rating agencies have threatened to downgrade Illinois’ rating, and a national study this week ranked Illinois as the worst at funding the pension system.

"This is an emergency," said Quinn, who estimated that each day $12.6 million is added to the state’s unfunded pension liability. "The taxpayers have to come first here."

Quinn said he agreed to the delay because he wants a bipartisan pension reform plan.

He also pointed out how the state has made some progress in dealing with its other financial problems. Quinn signed a Medicare reform package last week that makes $1.6 billion in spending cuts. And earlier Thursday, he signed legislation ending free and reduced health care for more than 80,000 state retirees starting July 1.

Copyright 2012 The Associated Press.

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