A Senate budget hearing this week focused on the state economy, with additional time dedicated to an overview of a budget plan offered up by The Civic Federation, a non-partisan research organization. Senate Republican lawmakers welcomed the discussion, but noted their disappointment that there was no conversation about reforming state government or cutting government spending. In fact, the Civic Federation’s proposal would increase state taxes by a whopping $9 billion.
Senate Republicans continue to prioritize cuts to state and local spending, as lawmakers and the Governor work towards a bipartisan, full-year balanced budget with reforms that will stem the tide of employers and residents from Illinois. A compromise pension reform measure that has been introduced in the Senate, and has gained the support of the Governor, Senate and House Republican leaders, and a number of Republican legislators, is one significant platform upon which Senate Republicans say consensus could be built.
The reforms contained in this Senate Bill 2172 and Senate Bill 2173 have received bipartisan support in the past. The package incorporates pension reform concepts that have been supported by both Governor Bruce Rauner and Senate President John Cullerton. The pension package would save taxpayers billions of dollars, while also providing significant fiscal relief to Chicago Public Schools.
Senate Bill 2172 includes the Tier 3 and budgetary items of SB16 along with the text of SB 2822 from the previous General Assembly. It creates an optional hybrid Tier 3 for new hires, as well as a voluntary 401k program for active Tier 1 employees and an optional pension buy out provision. Additionally, the legislation institutes provisions designed to curb late-career salary spiking, and closes the General Assembly Retirement System pension plan to new entrants. Among other provisions, the legislation also provides $215 million for Chicago Public Schools pensions in Fiscal Year 2017.
The second component, SB 2173, includes the consideration model portions of SB16 previously proposed by Cullerton. This measure applies to active Tier 1 employees of the General Assembly Retirement System (GARS), the State Employee Retirement System (SERS), the State Universities Retirement System (SURS), the Teachers Retirement System (TRS), and the Chicago Teachers Pension and Retirement Fund of Chicago (CTFP). Retirees are not impacted by this measure.