Ill. Governor to Legislators: No Pay Until You Fix Nation’s Worst Pension System

September 6, 2013 - 4:17 PM

Gov. Pat Quinn

IIllinois Gov. Pat Quinn

(CNSNews.com) –  Leaders of the Illinois General Assembly are suing Gov. Pat Quinn for freezing their paychecks in July in retribution for not doing anything about the state’s underfunded pension system in over two years. A court hearing on the lawsuit is scheduled for September 18th.

Illinois Senate President John Cullerton and Illinois House Speaker Michael Madigan filed the lawsuit on July 30th, arguing that Quinn’s suspension of the part-time legislators’ $67,836 annual base pay was an unconstitutional encroachment on the Illinois Constitution’s separation of powers between the state’s executive and legislative branches.

“If the Governor’s line-item veto is upheld, the independence of each member of the General Assembly will be forever compromised,” Illinois’ top legislative leaders argued, comparing Quinn’s action to an unsuccessful attempt by his predecessor, former Gov. Rod Blagojevich, to reduce the salaries of state judges, which was struck down by the Illinois Supreme Court.

But Quinn is calling their bluff, saying that all state lawmakers have to do to get their pay is to override his veto. Cullerton, Madigan and Quinn are all Democrats.

"If legislators had put forth the same effort to draw up a pension reform agreement that they did in crafting this lawsuit, pension reform could have been done by now," the governor said in a statement.

On July 10, a month after Quinn proposed a legislative conference committee to get the two chambers together to hammer out a compromise on “comprehensive” pension reform, and a day after the governor’s deadline, Quinn suspended legislators’ pay after calling the pension situation “an emergency.”

Using his line-item veto powers, the governor removed $13.8 million from the budget that was earmarked for legislative salaries, arguing that since state lawmakers had not done their jobs, they shouldn’t get paid.

Quinn, whose own salary is $177,412 a year, is voluntarily forgoing his own pay until the pension problem is addressed.

Illinois’ state pension system, which has $97 billion in unfunded liabilites, is considered the worst in the nation, according to Crain’s Chicago Business. It has $89.3 billion in total cash and investments, but owes $175.6 billion in contractual obligations.

The system’s 50.9 percent funding level is far below the standard set by the American Academy of Actuaries, which says that “most plans should have the objective of accumulating assets equal to 100% of a relevant pension obligation.” (See Actuaries.pdf)

Only two states – South Dakota and Wisconsin -  currently meet or exceed that standard.