UPDATE 2-Illinois lawmakers pass long-awaited pension reform
SPRINGFIELD, Illinois Dec 3 (Reuters) - Illinois lawmakers on Tuesday passed a landmark pension reform bill, moving to address the state's crumbling finances in the face of strong public labor union opposition to the bill, which among other measures raises retirement ages.
The bill, passed in a special session, addresses problems that have built up over decades in the nation's worst-funded state pension system. Other changes include reducing and suspending cost-of-living increases and limiting the salaries on which pensions are based.
Championed by Democratic and Republican legislative leaders, the bill passed the Senate in a 30-24 vote and the House in a 62-53 vote after lengthy and at times emotional debate. It now heads to Governor Pat Quinn, who supports it.
"This bill will ensure retirement security for those who have faithfully contributed to the pension systems, end the squeeze on critical education and healthcare services, and support economic growth," the Democratic governor said in a statement.
With the state's finances buckling under a $100 billion unfunded pension liability, Democratic House Speaker Michael Madigan and others said the bill would save the state about $160 billion over 30 years and immediately reduce the unfunded liability by at least 20 percent.
Labor unions called on Quinn to veto the "unfair, unconstitutional bill. If he doesn't, our union coalition will have no choice but to seek to uphold the Illinois Constitution and protect workers' life savings through legal action," the union group We Are One Illinois said in a statement.
The measure will affect nearly half a million current and retired public sector union workers, according to a union spokesman. Unions argue the law violates a state constitutional prohibition against diminishing pension benefits.
Senate President John Cullerton, a Democrat, said he welcomes any court challenges to the constitutionality of the reform measures in the bill.
The affirmative vote came after a failed effort in the legislature's spring session, a summer of wrangling by a special legislative committee, and weeks of closed-door talks among the leaders. It also followed years of discussion and study, previous reform measures that provided limited improvements or failed to pass, and numerous downgrades of the state's credit ratings.
Some lawmakers during the floor debates worried that Illinois could be in for another round of credit downgrades should the bill fail. Its passage could brighten the prospects for a $350 million bond sale Illinois has planned for next week.