Pam Althoff Tells Highlights of Last Week in State Senate

A press release from State Senator Pam Althoff:

Springfield, Ill. – State Sen. Pamela Althoff (R-Crystal Lake) said last week the Senate passed a pension reform measure backed by the Senate President and acted on a number of other measures, including medical marijuana legislation, a bill to open the state’s system of education funding up to additional scrutiny and a measure creating the state-based health insurance exchange.

Pension Reform – Senate Bill 2404

On May 9, Senate President John Cullerton presented his pension reform legislation to the Senate, Senate Bill 2404, and chose to ignore Speaker Madigan’s pension proposal that already passed the House. President Cullerton’s measure passed with some bipartisan support.

Althoff voted in favor of the measure in order to keep the discussions of reform moving forward as she feels this is not the final version of reform.

Pam Aalthoff

Pam Aalthoff

“All stakeholders should be a part of the discussion for the pension reform solution,” Althoff said.

“Although the current form of Senate Bill 2404 does not produce the same savings as Speaker Madigan’s proposal, it does in fact save the state money.

“With that said, there is opposition to this bill and it is assumed that these issues will be taken up with other aspects of the Madigan proposal in the House.

“It is important that these discussions move forward and we achieve a solution that sustains our systems while protecting our retirees and workers.”

Rough estimates project Senate Bill 2404 will reduce the state’s pension payments in the upcoming fiscal year by $850 million, and would save a total of $46 billion over the next 30 years. While the measure would not strengthen the current funding formula, it would guarantee the state could make the pension payments required under current law.

However, opponents of the bill say Senate Bill 2404 does not do enough to stabilize the pension systems or reduce the state’s pension liabilities, which have been estimated by some to exceed $100 billion. They noted that in comparison Senate Bill 1, the pension proposal being pushed by Speaker Michael Madigan, promises savings of about $150 billion over 30 years, including approximately $2 billion in 2015.

The May 9, 2013, vote on the union-backed pension reform bill sponsored by Senate President John Cullerton.

The May 9, 2013, vote on the union-backed pension reform bill sponsored by Senate President John Cullerton.  Locally, Senators Dan Duffy and Karen McConnaughay voted, “No,” while State Senator Pam Althoff supported the measure.

Supporters of the measure contend that it may be more likely to meet Constitutional muster through provisions which give employees a choice of benefits. But opponents said there was no guarantee that the proposal would be held constitutional and pointed out that a retired teachers organization has already pledged to challenge the measure in court.

Senate Bill 2404 would require employees in every system but the Judges choose one of three options:

  • Keep their current Cost of Living Adjustments (COLA) on their future pension benefits – which is 3% compounded annually. Give up access to State health insurance when they retire and have future salary increases not count for their pension; or
  • Keep the current COLA but agree to a three-year delay in that COLA. Retain retiree health insurance. Future raises would count toward pensions. Workers would be required to pay an additional one week’s pay each year toward their pensions; or
  • Take a lower COLA (3% with no compounding) and agree to a two-year delay in that COLA. Employees could keep their retiree insurance and pensionable raises and not have to make extra contributions.

Retirees would be able to retain their current 3 percent compounded COLA, but must choose between:

  • Keeping access to health insurance and having a 2-year freeze in their COLA; or
  • Giving up health insurance with no COLA freeze.

The measure now moves to the House for consideration, although successful passage of it remains rather unlikely.

Education Funding Transparency – House Bill 3133

In addition to pension reform, Senate lawmakers turned their attention to other matters, including a bill sponsored by Senate Republican Leader Christine Radogno that would open up the General State Aid formula to greater public scrutiny.

The Senate Executive Committee approved House Bill 3133, which would require the approximate amounts forecast to be paid for state Poverty Grants and Foundation Level Grants to be listed out in a state budget bill for easy review; the Property Tax Extension Limitation Law adjustment must also be listed separately.

The measure was introduced in response to a study conducted by Senate Republicans that revealed the General State Aid allocation has been listed as a lump sum in the state budget, which makes it difficult to decipher how state education funding is being allocated.

House Bill 3133 seeks to increase transparency of the state’s system of education funding, which will allow policy-makers to detect trends that—until very recently—had been concealed, and ensure that schools are being funded in the way the General State Aid formula was intended.

Medical Marijuana – House Bill 1

The Senate Executive Committee also advanced legislation that would allow for the dispensation of medical marijuana, a measure which has received significant attention from the media and the public. House Bill 1 would allow a patient who has been issued a registry identification card by the Department of Public Health to possess up to 2.5 ounces of cannabis during a 14 day period. The measure specifies certain qualifying diseases and illnesses, but does not include general eligibility for chronic pain or nausea.

The measure establishes criteria for medical marijuana cultivation centers and requires them to be registered by the Department of Agriculture. The Department of Agriculture may approve up to 22 licensed marijuana growers, but no more than one per State Police District.

House Bill 1 stipulates that a cultivation center would only be permitted to provide medical cannabis to dispensing organizations whose purpose is to dispense cannabis and paraphernalia to qualified patients. The dispensing organizations would have to register with the Department of Financial and Professional Regulation (IDFPR); IDFPR would be allowed to approve up to 60 dispensaries.

In response to safety concerns, the bill provides a framework to allow for employer regulation and discipline for use of cannabis in the workplace. It also stipulates that a patient may not drive while under the influence of medical cannabis. A provision was included in the bill allowing for field sobriety tests to be administered to a medical cannabis card holder suspected of driving under the influence, and states that evidence would be admissible in court.

State Health Insurance Exchange – House Bill 3227

The Senate also moved forward with implementation of a state-based health insurance exchange as part of the requirements of the federal Affordable Care Act, often referred to as “Obamacare.” The Senate Insurance Committee approved House Bill 3227, establishing and outlining the structure of the Illinois Health Benefits Exchange. It is projected plan enrollment will begin Oct. 1, 2014. The exchange will initially have two components, one serving individuals and one serving businesses with 50 or fewer employees. In 2016, the two parts could be merged and could also include employers with up to 100 employees.

Additional Senate Action

The Senate considered a number of additional measures both in Senate Committees and as a full body. You can catch up on legislation moving through the Senate, as well as measures that have been approved by the General Assembly, at the Senate Republican’s “Senate Action” page.

Governor Quinn Requests Federal Assistance for 11 Counties Affected by Flooding

On May 9, Gov. Quinn asked President Obama to declare 11 Illinois counties major disaster areas following the storms and heavy rainfall in April. If that request is approved, the residents in those counties will be eligible to apply for grants and low-interest federal loans to help recover from the historic flooding. The counties included in the request are Cook, DeKalb, DuPage, Fulton, Grundy, Kane, Kendall, Lake, LaSalle, McHenry and Will.


Pam Althoff Tells Highlights of Last Week in State Senate — 2 Comments

  1. “While the measure would not strengthen the current funding formula, it would guarantee the state could make the pension payments required under current law.”

    That’s nuts.

    The state can’t afford the payments.

    Noone can afford the payments.

    The pension payments are unaffordable because of all the benefit increases added to state law by legislators.

    See the payments are currently on the Edgar ramp.

    Now they are proposing to replace the Edgar ramp with another ramp which will not solve the problem.

    The pension payment guarantee is what the unions really want out of all this legislation.

    That’s their top priority.

    The problem with that is the pension benefits were increased over the years by state lawmakers to unaffordable levels.

    We have a major, massive, benefit increase problem.

    So Madigan is going to do a cost shift of the state contribution to TRS, to the school districts, to dump the pension problem state lawmakers and Governors created through state legislation onto the local school districts.

    That would be the same technique currently used for police and fire pensions.

    Meaning state makes the police and fire pension laws, and local taxpayers get to fund the police and fire pensions.

    Ask suburban Mayors how that is working out.

    Madigan, Cullerton, and Quinn are Chicago Democrats and CPS is not part of TRS, rather, CPS has a separate pension fund from the rest of the school districts.

    What a disaster.

    Every day we wait to legitimately reform pensions is another day we are racking up unaffordable debt.

    The Cullerton pension bill does not do enough to adequately reform pensions.

    It’s a pothole patch and more reforms will be necessary.

  2. Since the unions will sue to enforce the sentence that was added to the Illinois State Constitution in 1970, the only sustainable method to reform pensions is to repeal the benefits shall not be diminished or impaired sentence through voter referendum.

    “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.”

    Repeal through voter referendum.

    That’s the bottom line.

    The younger you are the more this problem affects you.

    These so called reforms which are pothole patches are just like the Edgar ramp, an illusion that they will eventually solve the problem by stating they contribute to solving the problem.

    Rather, the pothole patches contribute to sustaining the problem.
    Until repeal you’ll see continuous tax increases, fee hikes, and service cuts (to reallocate money) to fund pensions, which will lead to more people and businesses leaving the state which increases the burden on those remaining.

    Of course the State will continue seeking Federal pension bailout relief.

    There’s nothing in Federal law stating Social Security benefits cannot be diminished or impaired.

    Rather, there’s continuous talk that Social Security will be diminished or impaired.

    A few other states have added similar sentences in their state law or constitutions stating state and local government pensions cannot be diminished or impaired, most don’t.

    The pensions can’t be diminished or impaired movement by unions remains a top legislative movement today.

    Note they are defined benefit pensions that were made gradually more lucrative by passing new state laws.

    It benefits special interests at the expense of society as a whole.

    It’s clearly unfair to citizens not receiving such pensions, to fund something they themselves will not receive.

    To Average Joe it’s an Unfair Siphoning of Hard Earned Money to Political Special Interest Groups.

    The only way the unions and lawmakers get away with this trickery is by blaming millionaires, billionaires, hedge fund managers, private equity firms, and heartless business people.

    Left unsaid is their defined benefit pensions are invested with the very same millionaires, billionaires, hedge fund managers, private equity firms, and business people.

    Try to get an 8% rate of return in US Treasuries and see what the does to your pension funding ratio.

    Because the lawmakers can’t get funding for pensions from the millionaires, billionaires, hedge fund managers, and private equity firms (rather they cut deals with them through state law or their private law firms), they tax you, Average Joe.

    Average Joe pays more, gets less.

    State pension recipient pays less, gets more.

    It all evens out.

    Just not for Average Joe.

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