Illinois Week in Review: Pensions, health care take center stageSPRINGFIELD — In a week foreshadowing drama to come in this legislative session’s final weeks, Illinois lawmakers passed a bill requiring retired government workers to pay for their health insurance.
Meanwhile, Chicago's mayor weighed in on the state's pension crisis, a state representative accused of bribery proclaimed his innocence and a College Illinois! employee was accused of insider investing.
Illinois pays more than $800 million annually for the health care of state retirees, 90 percent of whom pay nothing toward their health-insurance premiums.
To address what some see as part of a larger crisis — ballooning state retiree health care and pension costs — the House and Senate passed Senate Bill 1313, requiring state retirees to pay their health-care premiums.
"Illinois is by far an outlier state. We are one of only two states that offers (largely subsidized insurance for state retirees), and we simply cannot afford it," state Senate Republican leader Christine Radogno, R-Lemont, said.
The legislation allows the Illinois Department of Central Management Services to negotiate the premium rates annually with the state workers' union, the American Federation of State, County and Municipal Employees Council 31.
The bill passed the House, 74-43, and the Senate, 31-20. Democratic Gov. Pat Quinn said he would sign it.
Chicago mayor offers two cents on pensions
Former White House chief of staff and Chicago Mayor Rahm Emanuel told lawmakers here that the state's pension liabilities had to be addressed.
“The day of reckoning has arrived," Emanuel said.
As lawmakers consider ways to address what some see as an increasingly dire problem in the state's government retirees' pension fund — which faces a $2.7 billion deficit next fiscal year alone — Emanuel said he wants Chicago's system to be overhauled in tandem with the state's.
Absent new changes, Emanuel said, Chicago will owe $1.2 billion annually for city workers.
The powerful and outspoken Democrat proposed his own solutions:
Freezing cost-of-living increases for 10 years; Increasing contributions of 1 percent yearly for five years; Giving employees a choice of retirement plans. College Illinois! audit claims employee benefited personally from investments
At least one former employee of Illinois' prepaid college tuition program personally benefited from the investment firms the program contracted with in 2010 and 2011, according to an audit from the Illinois auditor general.
George Egan, former director of portfolio management for College Illinois!, was a partner in a company — not identified in the audit — that invested $500,000 in the investment firm Balestra Capital, which at the same time was bidding on a contract with College Illinois!, according to the audit.
College Illinois! also gave Egan a $24,166 bonus when he resigned several months after the investment in Balestra Capital in 2010 — around the same time that College Illinois! lawyers noticed the apparent conflicts of interest.
The Illinois Student Assistance Commission, the parent organization for College Illinois!, went on to invest $55 million in Balestra Capital.
Egan, most of the other executive staff and the board that oversees College Illinois! have been replaced since the General Assembly first requested the audit last year.
The auditor general is forwarding the findings of the audit to the Illinois attorney general, which is investigating the management of College Illinois!, as well as the Illinois Office of Executive General.
Indicted representative uses Blago defense strategy
Charged with bribery, state Rep. Derek Smith, D-Chicago, recycled a strategy used by former Democratic Gov. Rod Blagojevich.
Henderson ducked direct answers to questions posed by the House Special Investigative Committee and instead resorted to a defense his law firm, Henderson Adam LLC, used when it represented Blagojevich.
"We want all of the facts out," Henderson said. "We want everything to see the light of day."
While the process plays out in the U.S. District Court in the Northern District of Illinois, the committee is deciding whether Smith should be impeached by the General Assembly. Smith entered a plea of not guilty in federal court.
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