Mike Tryon Talks about Fall Veto Session, Sees Constitutionality Problems with Pension Bills

A missive from State Rep. Mike Tryon:

A Message From Rep. Tryon

On October 22 legislators will return to Springfield for the 2013 veto session. During that time the House and Senate will take action on bills that received a partial or full veto from Governor Quinn, and we will also consider additional legislation.

Pension Reform

Pension reform is the issue that most people would like to see resolved during veto session. I agree that pension reform is our #1 issue and priority right now. The bipartisan Pension Conference Committee has met several times since mid-July to draft a compromise bill which includes a framework that adequately decreases the liabilities of the state pension system while maintaining the integrity of the system moving forward.

Information that has been revealed thus far suggests that the compromise plan would save $138 billion over 30 years.

That’s significantly more than Senate President John Cullerton’s original plan, which would save $58 billion during that time frame, but less than Speaker of the House Mike Madigan’s plan, which would have saved $163 billion over 30 years. However, the bill is not yet final and it is quite probable that additional changes will be made.

While the rules of the Conference Committee require six of the ten members to sign off in support of the compromise plan before it can be brought to the General Assembly for consideration, it appears that only four are willing to support it as written at this time. President Cullerton is considering a legislative maneuver through which the language of the compromise bill could be inserted into an existing bill, at which point it could be called on the Floor for discussion and debate without the required 3/5 support of the Conference Committee.

Mike Tryon

Mike Tryon


I look forward to reviewing the ultimate compromise bill, and hope it is something I can support.

For me, the biggest sticking point is Constitutionality.

The Madigan bill included wording that is almost identical to language that was ruled unconstitutional in two other states, and for that reason I could not support his bill.

My oath of office includes a provision that will protect and defend the constitution of the State of Illinois, and I do not take that oath lightly.

Tax Credit Issues

Several bills have been filed that would provide tax incentives that would allow businesses to either stay in Illinois or move to Illinois. Some or all of these bills could come up for a vote during veto session:

  • Floor Amendment #1 to HB380: Archer Daniels Midland is asking for an EDGE tax credit and utility tax break to move its headquarters from Decatur to Chicago.
  • Floor Amendment #1 to HB381: This bill would create an Interactive Digital Media income tax credit.
  • Floor Amendment #1 to HB382: Univar, a chemical company currently headquartered in Redmond, Washington, is asking for an EDGE tax credit to move its headquarters from the Seattle area to Downers Grove.
  • Floor Amendment #1 to HB383: Zurich Insurance Company of Schaumburg is asking for an EDGE tax credit to move its headquarters to the Motorola campus.
  • SB1448: This bill would create a five-year 50% income tax credit for endowment gifts to community foundations. The fiscal impact would be capped at no more than $50 million per year.

Corporate Transparency Legislation Resurfaces

A bill that resurrects an effort to create the Illinois Corporate Responsibility and Tax Disclosure Act has been filed. HB3627 is nearly identical to a bill from the 97th General Assembly that passed in the Senate but failed before the House Revenue Committee.

The new bill requires publicly traded corporations and their subsidiaries to disclose certain tax information if they do business in Illinois. Business owners and the Taxpayers Federation oppose the bill because they feel the proposed disclosure requirements undermine the traditional notion of taxpayer privacy and business confidentiality, while allowing business competitors to use the tax information to gain an advantage.

It is yet another example of a bill that would make Illinois a less attractive state in which to invest and create jobs. I also fear that the passage of HB3627 would open the door to requiring similar disclosure mandates for small businesses and individuals.

Minimum Wage Increase

Governor Quinn has renewed his push to raise the minimum wage from $825 to $10. The business community believes a bill could surface either during veto session, or when regular session begins in January.

I am opposed to this effort and believe it would create a spike in unemployment as employers reduce staffing levels so that higher wages can be absorbed.

Overturning Gubernatorial Vetoes

Not every bill that is vetoed by the Governor is called during veto session. If the General Assembly does not take action on a vetoed bill during veto session, the bill dies. However, lawmakers have received notice that a “motion to override” has been filed on the following vetoed legislation:

  • HB1200: This bill reduces the free museum days in Illinois. The bill passed in the House in a 79-36 vote and in the Senate in a 40-4 vote. Governor Quinn issued a full veto of the bill, and said he disagrees with any effort to limit access to museums by lower income families.
  • HB2454: This bill addresses township advisory referenda and notices of meeting agendas. The measure was approved unanimously in both the House and Senate. Governor Quinn issued an amendatory (partial) veto, which addressed the part of the bill that said the referenda had to relate directly to township business.

I will continue to update you on important legislation as bills make their way through the legislative process, and as always, if my staff or I can assist you in any way, please do not hesitate to call my Crystal Lake office at 815-459-6453.


Comments

Mike Tryon Talks about Fall Veto Session, Sees Constitutionality Problems with Pension Bills — 7 Comments

  1. “For me, the biggest sticking point is Constitutionality.”

    So why not amend/change the constitution to save the state from bankruptcy?

    I have yet to read any media about changing to constitution.

    What would this take?

  2. Minimum wage $10? What a joke.

    Who can live on that.

    If minimum wage was more like $20 or $25, then people could actually afford to pay their rent and get a decent meal every now and then.

    I’d even support $30.

  3. If minimum wage were to go to $30.00 everything in your life would be three times more expensive.

    How stupid is that?

  4. Nice sentiments about that constitution Tryon.

    But if I had my choice between a $900 M dollar bill and the State constitution to wipe my rear end with, take a wild guess which one I’d choose?

    Just as a stock a certificate of a bankrupt corporation is worthless, so goes the articles of a bankrupt State.

  5. It took 40 years of new pension hiking laws to create the pension problem.

    It will take 40 years of pension reduction laws to solve the pension problem.

    Whatever “pension reform” is passed will not be the end of it.

    The problem is literally unsolvable at this point in Illinois history because voters are not knowledgeable enough about the issue, and because labor laws, pension laws, and labor unions are so strong.

    So there will be Mickey Mouse pension reform.

    Not real pension reform.

    The Illinois Constitution can be amended either by Constitutional Convention (if 3/5 of the members in each House of the General Assembly agree to it, which voters can approve or disapprove) or by the General Assembly (if 3/5 of each house of the General Assembly approve the amendment, which is then submitted to the voters at the next general election).
    http://www.leadinglawyers.com/helpdesk/illinois_constitution.htm

  6. The constitutionality problem is due to one sentence added to the Illinois State Constitution at the 1970 Constitutional Convention.

    Article XIII – General Provisions.

    Section 5 – Pension and Retirement Rights.

    “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    Note the United States Constitution has no such clause for Social Security or any Federal pensions.

    One main problem is the clause allows unlimited benefit increases.

    That’s why over 130 benefit increases occurred to state pensions in 38 of 40 years from 1971 – 2011.

    The press coverage of the vast majority those benefit increases was very sparse and poor.

    And the practice continues.

    In 2013 Early Retirement Option (ERO), which was a series of the aforementioned benefit increases, was renewed in 2013 for Teachers Retirement System (TRS) of Illinois.

    Some more details about pensions.

    Illinois spends about 25% of its General Revenue Fund on pensions.

    Many or most other states on average spend about 5% of their General Revenue Fund on pensions.

    Now the State of Illinois has a large contribution to teacher pensions, not sure how common that practice is in other states.

    Illinois teacher/administrator pensions are extremely lucrative when comparing the amount the employee actually contributed to the pension the employee receives, factoring in Cost of Living Allowance (COLA), number of years worked to receive the pension, and retirement age.

    Not many pensions are more lucrative than the myriad of Illinois State pensions (TRS, SERS, SURS, GARS, JRS) and note Illinois police and fire pension benefits are also determined by state law although the state doesn’t contribute financially to the pensions.

    All these pension benefits have been increased over the years.

    The pension benefits when the employee started employment versus when they retired, assuming the employee worked a full career, are VASTLY different in almost every case, good luck finding the exception.

    In almost every year pension benefits were enhanced.

    It depends on the exact pension fund, the teacher/administrator being the most frequently enhanced.

    It’s really an incredible story.

    In many or most cases union lobbyists handed legislators proposed pension benefit increase legislation.

    And in exchange for pension enhancing legislation unions provided campaign contributions and votes to politicians voting for the enhancements.

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