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D-200 officials, union address effect of state pension plan

Published: Thursday, Dec. 5, 2013 1:42 p.m. CDT • Updated: Tuesday, July 29, 2014 9:58 p.m. CDT

A bill narrowly passed by Illinois lawmakers Dec. 3 intended to fix the state's pension crisis could have long-term effects on local school districts, including Community Unit School District 200.

The legislation, approved by both the Illinois House and Senate and signed into law by Gov. Pat Quinn Dec. 5, is written to guarantee full funding of the state's pension systems by 2044, according to the Illinois Senate Democrats website, and to save $160 billion during the next 30 years.

Three of Wheaton's four members of the General Assembly voted against the measure, including Sen. Kirk Dillard, R-Hinsdale, and representatives Jeanne Ives, R-Wheaton, and Sandra Pihos, R-Glen Ellyn. Sen. Michael Connelly, R-Naperville, was the lone "yes" vote.

The pension shortfall has put the financial future of both teachers and school districts in question, and strained state finances to the extent that payments from the state have often been delayed or significantly cut.

In that sense, said District 200 Board of Education President Barbara Intihar, a bill addressing the situation is a good thing.

"I'm very optimistic about it," she said. "I think we were concerned that [state legislators] were going to continue to kick the can down the road, but I'm happy they decided to take action."

Intihar said she was glad the General Assembly didn't pass a portion of the pension payments on to local school districts, something that was considered as an option in previous talks.

Superintendent Brian Harris said that, while the bill won't have any direct impact on the school district in terms of cost, there will be many indirect effects. Aside from easing budget projections in the future, the reform would also affect future collective bargaining agreements with teachers, he said.

Workers in state-funded pension plans, including public school teachers, will have to retire later and will see lower cost of living increases and pensionable salary levels. How that will specifically affect future negotiations was unclear, Harris said.

"But what it's going to do, basically, is impact people's decisions and when they enter and when they exit the district," he said. "It's going to impact compensation, how much is being deducted from their paychecks, how much is 'guaranteed' to them in the long term."

Harris said he used the word "guaranteed" lightly, as the vote Tuesday was a change from what was previously agreed upon by the state and he referred to the outcome as a sad situation.

"It's unfortunate that after 20-plus years of the state balancing their budget on the backs of employees by not making their pension obligation payments that now they come back and cut them," he said.

Opponents of the bill, including labor and teacher unions, say the deal punishes workers and many have said they will challenge the bill's constitutionality. Both Harris and Intihar said they weren't sure if it would hold up in court.

Bryce Cann, president of the Wheaton-Warrenville Education Association, said he was disappointed in the bill and believes it to be unconstitutional. The problem with state pensions is one of revenue, he said, not of benefits costing too much.

"The teachers have never missed a payment. The state is the one that has missed payments, and now they are reducing benefits and asking teachers to pay more," he said. "They're not looking at ways to shore up revenue streams, and that's going to be a problem, not just for pensions, but also for maintaining state services."

Reporter Ed McMenamin contributed to this story.

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By the numbers

Senate vote – 30 to 24 House vote – 62 to 53

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Effects on pensions

• Pensionable salary capped at $110,000 • Cost of living adjustments capped at 3 percent simple interest, with annual growth supplemented with the rate of inflation • Workers will contribute 1 percent less to their plans • Current employees age 45 and under have a retirement age increase

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