REBOOT ILLINOIS
GUEST OPINION
By State Rep. Mark Batinick

The state faces many fiscal challenges.  None of them are unsolvable.  In fact, many of our challenges are inter-connected.  A failed policy decision in one area often leads to other negative results in another area.  For example, skipping pension payments in the past has led to a higher percentage of our current budget being used to “catch up.”  It also has contributed to lowering our credit rating which means more money is needed for interest payments on loans.  This crowds out funding for basic government operations. 

On the flip side, reducing our unfunded pension liabilities would have the opposite effect in the long term.  Returning our pension funds to appropriate balances and increasing our credit rating would save the state billions.  We have to start taking a series of small steps that have long term benefits and lead to additional savings.  My pension reform proposal is a significant step in positive direction and would have a multiplier effect moving forward.
FY16 Budget
·         Democrat majority continues piecemeal budget strategy.  Although Illinois is close to ending its third month without a spending plan for the fiscal year that began on July 1, 2015, the House session this week did not show any signs of progress.  On Thursday, Democrats on the House Executive Committee passed a $3.8 billion spending bill without specifying a funding source for the monies pledged by the committee to be spent. 

While the House committee’s action cleared SB 2046 for further action on the House floor, the lack of real negotiations on the State budget mean that spending bills of this type are seen by close observers of Springfield as less than serious.  The full House did not take up SB 2046 for debate this week, and did not discuss an overall spending plan or budget agreement.  Gov. Rauner has stated his intent to veto this and other piecemeal budget bills that would overspend anticipated revenues by billions of dollars.          
By Bugle Newspapers

State Rep. Mark Batinick, R-Plainfield, and a group of suburban legislators unveiled a new initiative to address the state’s pension liability, calling for a series of hearings on offering a lump sum buyout option to current and future annuitants nearing retirement; potentially netting the state billions in long-term savings.

The proposal, House Resolution 752, wants the Speaker of the House and the Chairperson of the House Personnel and Pensions Committee to hold a series of hearings on how the state could potentially approach a lump sum exchange option.

Interested parties and stakeholders would be invited to participate in the hearings in hopes of better understanding the outcomes of an exchange proposal as well as any potential barriers that would prevent an exchange option from becoming a common practice within the five state-funded retirement systems. 

“Many of those nearing retirement may be attracted to having more control over their retirement assets,” Batinick said. 
CHICAGO – A group of suburban legislators led by State Rep. Mark Batinick (R-Plainfield) unveiled a new initiative to address the state’s mounting unfunded pension liability on Thursday, calling for a series of hearings on offering a lump sum buyout option to current and future annuitants nearing retirement; potentially netting the state billions in long-term savings.

The proposal, House Resolution 752, urges the Speaker of the House and the Chairperson of the House Personnel and Pensions Committee to hold a series of hearings on how the State could potentially approach a lump sum exchange option. Interested parties and stakeholders would be invited to participate in the hearings in hopes of better understanding the outcomes of an exchange proposal as well as any potential barriers that would prevent an exchange option from becoming a common practice within the five State-funded retirement systems. 

“Many of those nearing retirement may be attracted to having more control over their retirement assets,” Rep. Batinick said, “but unfortunately the State does not provide a versatile and competitive alternative to the current pension arrangement. Providing a lump sum payment in exchange for all or a portion of an annuity would provide a voluntary, constitutional approach to addressing the State's pension obligations, while simultaneously providing participants the options and flexibility needed when planning for retirement.”


In their May ruling declaring the pension reform bill signed into law by then-Governor Pat Quinn in December 2013 unconstitutional, the Illinois Supreme Court laid a framework for the adjustment of benefits through a legal approach called “consideration”, which allows for the adjustment of benefits if both parties agree to the changes. Rep. Batinick’s proposal to offer annuitants a lump sum option would meet this requirement by making any proposed buyout program voluntary.

Underscoring the need for bipartisan action on pension reform, the Commission on Government Forecasting and Accountability (COGFA), has calculated the total unfunded pension liabilities of the State retirement systems at $111.2 billion as of June 30, 2014, based upon the actuarial value of assets.

HR 752 has been filed with the House Clerk and awaits assignment to committee for consideration.