Local pension consolidation proposal passes committee despite objections to changes

Four words – “A third party, including” – in two sections of a proposed amendment to the suburban and downstate police and fire pension consolidation bill could sink the effort, but lawmakers said the plan remains a work in progress. The Center Square

Four words – “A third party, including” – in two sections of a proposed amendment to the suburban and downstate police and fire pension consolidation bill could sink the effort, but lawmakers said the plan remains a work in progress.

More municipalities across the state report their share of property taxes are being taken up by police and firefighter pension costs, squeezing out money for other programs and services.

Gov. J.B. Pritzker and the Illinois Pension Consolidation Feasibility Task Force proposed a measure that would combine 649 police and fire pension funds into two funds. The consolidation would maximize the investment pool and increase investment returns, possibly saving taxpayers up to $500 million across the state. The combined funds would have more than $12 billion in unfunded liabilities. The consolidation proposal does not address the debt of the state’s five pension funds or Chicago’s pension funds.

The measure was initially filed as Senate Bill 616 last month. Police groups came on board with a planned amendment last week that would give active duty and retired police members a majority on the statewide investment board.

But an amendment late Monday to House Bill 1300 changed measure, which had broad bipartisan support.

Illinois Municipal League Executive Director Brad Cole said his organization was on board with the initial proposal and a proposed amendment over the weekend garnered support from police groups. But, Cole said the last-minute proposed amendment would remove taxpayers from decisions regarding disability benefit awards.

“I sit here in opposition to a bill that we have advocated for for years because of a midnight provision that penalizes the taxpayer, the person we’re trying to support,” Cole said Tuesday.

He said the additions in two sections weren’t relevant to the plan to consolidate pensions to boost investment returns.

The amendment says “A third party, including the Firefighters’ Pension Investment Fund … shall not have the authority to control, alter, or modify, or the ability to review or intervene in, the proceedings or decisions of the fund …”

State Rep. Mark Batinick, R-Plainfield, said that last-minute amendment would remove management on a municipal level from being able to present information in duty-disability cases.

“Let’s say there’s an injured employee, if there’s any information that management has it’s between the pension board and those individuals,” Batinick said.

Batinick said the proposed change would lead to higher costs for taxpayers, possible conflicts of interest and take away the broad support the measure had before the last-minute amendment was filed.

The sponsor of the bill, state Rep. Jay Hoffman, D-Swansea, said his understanding was that the amendment codifies current case law.

“It is the jurisdiction of the local boards to determine disability and causation of disability,” Hoffman said. “That’s current case law as I understand it. Does this language go further that? I’m not sure. I’m trying to figure it out.”

Hoffman said he will work to allay the concerns of the municipal groups and Republicans.

The measure passed committee despite several Republicans opposing the amendment, but it could be removed before final passage.

Other municipal groups said benefit enhancements for Tier II pensions before there are increased investment returns could lead to higher property taxes.

The Center Square

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