CHICAGO - Cook County President Toni Preckwinkle is urging Illinois lawmakers to approve county pension reform, saying it can withstand the legal challenges that doomed the state's own efforts.
The county's chief financial officer, Ivan Samstein, was in Springfield Tuesday to generate support for a bill that would allow the county to enact various pension reforms to strengthen a system that is only 54% funded and has prompted two of the three ratings agencies to put the county on negative outlook.
The House Pension Committee is expected to hold a hearing on the bill Wednesday morning.
The effort comes as Cook County - home to Chicago -- hopes to avoid the round of downgrades that hit the city last week in part because the state Supreme Court ruled that the state cannot cut retirement benefits.
Like Chicago, the county needs the state to approve changes to its pension systems.
Similar legislation died last year amid a lack of support in the House. The latest measure is being offered an amendment to a Senate vehicle bill introduced by powerful House Speaker, Rep. Michael Madigan, D-Chicago.
In reviving the legislation, Preckwinkle argues that the county's liabilities are rising by $30 million a month and a reform bill needs to be passed "immediately."
The county's proposal would withstand a legal challenge in part because, like Chicago, the county is not relying on the 'police powers' argument that the state used to defend its reforms, Preckwinkle said.
The county's plan would also offer employees something they don't have now - a dedicated revenue source for health care benefits, according to the county.
"Our plan, which was the product of over two years of negotiations with a cross section of unions and stakeholders, also confers on participants significant new value in return for changes in the pension system," Preckwinkle said in a statement.
"The window of time to enact the mutually agreed upon actions to fix the status quo narrows," she said. "It is critical that our pension reform legislation be passed immediately."
The county's main pension fund has a funded status of 54% with a $6.8 billion liability. That includes retiree health care obligations.
The reform is structured as an amendment to Senate Bill 843.
Preckwinkle's proposal would raise the county's contribution by $147 million a year starting in 2016 and raised employee contributions starting next year. It would retain the compounded nature of the cost-of-living increases while reducing the annual increases for current workers and freezing all COLAs for current retirees for one year in 2016.
The bill would raise the retirement age for most county employees by five years.
Preckwinkle touted the proposal as having the approval of 67% of the county's unions, representing 61% of the unionized workforce.
One of the county's largest unions, American Federation of State County and Municipal Employees, said the union believed the proposal was unconstitutional, and would likely sue if it became law.
She said the reform would bring the funds to full solvency after 30 years.
Preckwinkle has so far refused to provide details on how the county would pay for the proposal, saying only that it planned to be "very creative" about financing the increased contributions.
Moody's Investors Service rates Cook County A1 and Fitch, which downgraded it last July, rates it A-plus. Fitch and Moody's both have the county on negative outlook.
Standard & Poor's rates the county AA with a stable outlook.
