SB 3538 – House Amendment #3 passed the House with 95 ‘YES’ votes

Talking Points – SB 3538

·         Senate Bill 3538 accomplishes the creation of a two-tiered pension system for new hires and other modifications.  Although we may not agree on all the details, this is a first step toward meaningful reform.    For this reason, I ask you to support SB 3538.

·         However,  we want to be clear - SB 3538 is not an end-all solution to the pension crisis, despite providing some measure of current relief for taxpayers.   We still need comprehensive reform in order to produce the true fiscal savings our taxpayers need.

·         In particular, the compliance/penalty language in this bill is of great concern to municipalities with unintended consequences that will leave some towns simply unable to support public safety and other critical services.  

·         As it stands now, it is especially difficult for municipalities, particularly non-home rule municipalities, to keep up with out-of-control pension costs.  Even as taxpayers have increased pension contributions, funding levels have still declined. 

o   The focus should be on making the system more sustainable, and not on enforcement.  This includes strengthening the financial health of police and fire pension funds and the potential consolidation of these funds (similar to IMRF).

o   Without this, the system will continue to lack critical safeguards and sound management - and no amount of penalties/compliance can fix that.

·         We eagerly await the results of the COGFA studies in 2013 which we expect will provide us the information we need to better understand the true nature of the problems and a roadmap for further reforms to the public safety pension systems.

·         We also want to stress that the fiscal benefits derived from this bill will quickly disappear if future benefits enhancements are approved by the General Assembly.

·         Please make no mistake - SB 3538 will not eliminate the need for tough municipal decisions.   Many communities will continue to be forced to raise taxes and make cuts in public safety personnel and other services in order to address skyrocketing pension costs.  

·         From the beginning, the Pension Fairness for Illinois Communities Coalition pushed for a comprehensive package of meaningful reforms to address the police and fire pension problems that are burdening our taxpayers and placing our towns on the brink of collapse.

·         We hope this bill will lay the foundation for much-needed comprehensive reform in the future.  Our taxpayers deserve this.