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State lawmakers adjourn Friday without acting to resolve pension funding crisis across Illinois

June 1, 2013

SURS: State Universities Retirement System of Illinois logoThe Illinois General Assembly adjourned Friday evening without taking action to resolve Illinois’ pension funding crisis. Illinois public university presidents and chancellors worked diligently this spring to craft a viable solution to the SURS funding problems.

The Illinois Government & Public Affairs Policy Institute (UIUC) developed a Six Point SURS Pension Reform Plan that was promptly endorsed and put forward to the General Assembly as a solution to the SURS funding woes. Major portions of the legislation were contained in SB 1687 and SB 2591. After extensive negotiations, SB 1687 passed the House Thursday and the Senate Executive Committee Friday, but failed on the Senate floor by a vote of 21-33-5 immediately prior to adjournment.

SB 1687 contained several provisions that would have significantly helped universities in return for gradually assuming the employer share of pension costs beginning in FY15 at the rate of 0.5 percent per year.

Two positive developments from the Spring Session:

  • Public universities aggressively advocated for and were successful in maintaining FY13 appropriated budget levels, a significant improvement over Gov. Pat Quinn‘s proposed budget for FY14 that would have reduced university budgets by 5 percent. For NIU, that cut would have slashed more than $4.5 million for the university’s budget.
  • No matter what opinion one has on the conceal/carry issue facing the state, IIlinois universities successfully advocated for and received an exemption that will prohibit guns on college campuses.

Since SB 1687 fell nine votes short of passing the Senate during the waning hours of the spring session, the regulatory changes that accompanied the cost-shift legislation will not take effect. Extensive negotiation with House and Senate leaders and staff resulted in legislation that, had it passed, would have net substantial savings and operational efficiencies for universities going forward.

Symbol of the State of IllinoisSB 1687 included:

  • Numerous changes to procurement rules including exempting various university functions from the code including expenditures under grant awards, and allowing universities to enter into joint purchase agreements.
  • A one-year postponement of the new regulations related to the rehiring of retired faculty and staff, which would have help schools affordably stave off a “brain drain” as a large percentage of their workforce reaches retirement age in the next few years.
  • Changes to the property control act that would have substantially reduced the cost of tracking university property.
  • An agreement to provide lump sum appropriations to public universities beginning in FY15 to provide universities with additional flexibility to manage budgets efficiently.

“Nothing is more frustrating than seeing the work of our best public pension experts fail on the floor of the General Assembly, especially when there is no alternative solution to resolve the pension woes for public higher education,” NIU President John Peters said. “I want to thank Steve Cunningham, Jerry Blakemore, Kathy Buettner and Avijit Ghosh (UIUC) for their tireless efforts and professionalism throughout lengthy, difficult and complicated negotiations with General Assembly staff and legal experts. Despite the outcome on the floor of the Senate, I am proud of our efforts to put forth a viable and pragmatic solution that will save the SURS system for our faculty and staff.”

Gov. Quinn has indicated he will call a meeting of the four legislative leaders soon in an attempt to continue to tackle a pension funding solution for the state. In the meantime, SB 2591, a working-version of the IGPA Six Point Plan remains on the Senate calendar for future consideration.