Partial pension reform; higher age for purchasing tobacco

Partial pension reform passed on final day of session
One of the largest long-term challenges state government faces is the large unfunded pension liabilities in state-managed pension funds. These include the systems which cover pension payments promised to teachers and other public-sector professional workers. We cannot even determine the exact size of these liabilities because they are based on future interest rates and estimated future rates of return on the funds which have already been invested. The current estimate of the unfunded pension liabilities stands in excess of $130 billion, with the largest portion being the $71 billion of commitments made by the Teachers’ Retirement System (TRS).



In the spring session, the legislature took significant actions to address the unfunded liabilities on the books of the TRS and State Universities Retirement System (SURS). We need to ensure that we are able to meet the commitments that have been made to those who will be counting on these programs in their retirement.

The legislation which passed on a bipartisan basis on May 31 will reduce these liabilities in two ways. First, school districts will no longer be able to pass on to the state the cost of end-of-career raises greater than 3%, which are the salary levels on which pension payments are based. A school district may still grant end-of-career raises, but the state pension fund will only pay for a 3% increase (down from 6% in the previous law). Pension costs generated from raises greater than 3% must be borne by the school or university that granted the raise. This change will not apply to collective bargaining agreements already in force; so many teachers who are on the verge of retirement will not be affected.

Secondly, the state has put in place a new program to buy out all or part of the future pension benefits to be paid out to active and inactive vested workers. Under this proposal, vested public-sector workers – especially those enrolled in pre-2011 “Tier I” pension plans – will be given the option of taking a buyout of a segment of their pension benefits. Workers who choose to accept a buyout will receive a substantial cash payout that could be reinvested as desired by the worker.

Legislation passed to raise legal age for purchasing tobacco
Senate Bill 2332 will phase out the current ability of Illinoisans under the age of 21 to buy cigarettes, chewing or rolling tobacco, and other tobacco products in Illinois. Previously, the minimum age was 18. Persons under 21 who have drivers’ licenses are already required by law to carry distinctive license identification cards which are part of the existing practice of “carding” adults when they buy alcohol. The same idea can now be applied to tobacco purchases as well.  The bill has passed both houses and is now awaiting action by the Governor.

How much do we owe?
As of the time of this writing, the State of Illinois owes $7,397,238,910 in unpaid bills to state vendors. This figure represents the amount of bills submitted to the office of the Comptroller and still awaiting payment. It does not include debts that can only be estimated, such as our unfunded pension liability which is estimated to be approximately $130 billion.

General Assembly accelerates construction of new Quincy Veterans Home
The deadly Legionnaires Disease outbreak at the Quincy Veterans Home has been in the news for almost three years now. Earlier this year a commission appointed to study the outbreak presented its recommendations to the legislature and the Governor. Now, the House and Senate have acted to provide funding for the major construction effort which is needed to address the tragic problems in Quincy.

The home is a skilled-nursing-care facility which is set aside for exclusive use by Illinois veterans and their families. It was built in 1886 for veterans of the Civil War. As the facility has aged, its plumbing system has begun to fail, contributing to the outbreak of the water-borne disease. In a two-step process, Senate Bill 3128 provides for both immediate and long-term solutions to the problems plaguing the facility. First, it allows for immediate remediation of the problems at the Home, including the digging of a new well for clean water. Over the long term, the legislation puts the construction of a completely new Veterans Home at Quincy on the fast track. The bill contains language which will ensure that the design and building of the new Home starts as soon as possible.

New law brings independence, transparency to legislative sexual harassment investigations
House Bill 138 has been approved by both houses and signed into law by the Governor. It will close loopholes in the existing state law, especially in regard to the Illinois General Assembly, on issues of sexual harassment. The office of the Legislative Inspector General will now be a full-time position. The new law also lengthens the window of time during which a survivor of sexual harassment may file a complaint with the Department of Human Rights. It toughens harassment training for state legislators and employees, requires annual reporting of sexual harassment reports, and makes other changes.

Did You Know?
Illinois is split into 18 congressional districts for the purpose of choosing representatives to serve in Congress in Washington D.C. Currently there are eleven Democrats and seven Republicans in Illinois’ U.S. House delegation. Congressional districts, like state General Assembly districts, are re-drawn every ten years, with the next remap taking place after the 2020 census. There are 435 total Congressional districts nationwide, and they are apportioned among the states based on population figures determined by the Census. Illinois is tied with Pennsylvania for the fifth-largest House delegation, while California has the largest.

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