Analyzing Gov. Rauner's Latest Pension Plan

Is Gov. Bruce Rauner's newest pension proposal constitutional? How will it impact city and state employees? John Tillman, CEO of the Illinois Policy Institute, and Ralph Martire, executive director for the Center for Tax and Budget Accountability, analyze the plan.


On Wednesday, Gov. Bruce Rauner said he was re-introducing his five-point turnaround agenda as well as a new pension plan. According to Amanda Vinicky’s reporting, Rauner’s yet-to-be-released 500-page plan gives state employees and public school teachers a choice: take a smaller retirement immediately or take a smaller benefit down the line by choosing to forgo having future salary hikes count toward pensions.

The Chicago Teachers Union on Wednesday issued a statement following Rauner’s announcement:

“The Pension Reform Bill proposed by the governor is nothing more than a collection of Bruce Rauner’s worst ideas as it relates to Illinois’ public sector workers.  He continues to treat the people who perform some of the hardest jobs in our state with contempt and disregard,” said CTU Vice President Jesse Sharkey.

“His proposal stands in stark contrast to the tax cuts he’s enjoyed this year as one of the wealthiest men in Illinois. We continue to be dismayed at his lack of economic vision that would include progressive revenue solutions and the stabilizing of our pension systems.

“The legal theory he is using has resulted in an unconstitutional mishmash of proposals which diminish and impair pensions. Chicago’s public school educators should not have to choose between having an arm cut off or a leg---meaning we should not have to decide which hard earned right we must give up in order for the state to make contributions to our fund, as it does to others across Illinois. Asking people who do not receive social security upon retirement to take a 7 percent pay cut in order to possibly retire healthy enough to draw down their deferred compensation is an insult to our intelligence,” Sharkey said.

Cook County spokesman Frank Shuftan issued the following statement on Wednesday:

“We just received a copy of the Governor’s proposal and staff will now begin their analysis of it. The issue of pension reform has languished for too long without substantive action as costs continue to rise. While we will carefully review the proposal and continue to work with legislative leaders, the bill we introduced, and which we still endorse in its current form, is designed to resolve the County’s actuarial shortfall and put the Pension Fund on a road to long-term, sustainable solvency. Our bill was crafted over two years in consultation with our labor partners. It calls for shared sacrifice and it earned the support of the vast majority of our unions. We believe that our bill, as it is constructed, is the best vehicle through which true and meaningful pension reform for Cook County can be achieved, and we will continue to respect the legislative process as debate on this issue continues.”