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Rauner hints his pension plan may not survive challenge, either

By Doug Finke
State Capitol Bureau
Posted on 5/14/2015, 9:12 PM

Gov. Bruce Rauner Thursday raised the possibility his pension reform plan may not be constitutional, a day after officials from his administration told a House panel last week"s Supreme Court decision did not affect it.

During a brief Statehouse news conference, Rauner said he had a "productive discussion" with Senate President John Cullerton, D-Chicago, over Cullerton"s ideas for enacting a pension reform plan he thinks will survive a court challenge.

But Rauner added, "I think we all have some concerns now with the Supreme Court"s ruling about what is constitutional. We"ve got some concerns about whether (Cullerton"s) ideas will work and we"ve got some concerns about whether our ideas will work."

Rauner said the Supreme Court ruling "was broad and tough and not crystal clear about what can change and what can"t."

Rauner said several options are under consideration.

"Some haven"t been brought forward yet," he said.

He said the options will be pursued simultaneously to see which ones can pass a court review and which ones may not.

"We are feverishly endeavoring to come up with a solution that we have a high confidence level will pass court muster," Rauner said. "We can"t afford to spend years in court and end up with, like we did here, no real change."

Rauner has proposed freezing pension benefits already earned by workers, but then moving all of them into the less generous Tier 2 pension system for their future work. He has insisted the idea should be constitutional because it does not change pension benefits already earned.

The plan got a hearing before a House committee Wednesday where skeptical Democrats insisted they felt the court opinion makes Rauner"s plan invalid and that he should focus on a new proposal.

Cullerton"s plan is based on consideration, giving workers a choice going forward. They could give up 3 percent compounded raises in their pensions and have future pay raises count toward their pensions. Or, they could keep the 3 percent raises, not have future pay increases count toward pensions.

Also Thursday, Moody"s Investors Service issued a statement saying that last week"s court decision is a "credit negative" for the state.

The service also questioned whether Rauner"s plan would survive a court challenge.

"Although Mr. Rauner asserts that these pension plan changes would not violate the state"s constitutional protections, we believe they will at least be subject to litigation and delay," the service said. "Moreover, the court"s latest ruling raises doubts that they can be implemented at all."