By Jayette Bolinski | Illinois Watchdog
SPRINGFIELD — State workers hoping to receive annual pay raises in the coming years will have to wait for the state of Illinois to creep back from the edge of an unprecedented fiscal cliff.
That’s the message desperate lawmakers and other officials are sending to Gov. Pat Quinn and the 44 public-sector unions as they embark on contract negotiations.
But will Quinn and the unions listen to the General Assembly, whose only role is to come up with the money to pay for whatever ends up in the contracts?
It’s hard to say.
So who determines the state’s spending priorities: the governor, the Legislature or the unions?
“As we fight to keep facilities open and we fight to fund the pension systems, the state is at the point where any and all additional financial pressures have to be looked at very seriously,” said state Rep. John Bradley, D-Marion. “There is not a magic pot of money that can be found to pay for all the things we want.”
Bradley and other lawmakers on Thursday were in Chicago to consider House Joint Resolution 45, put forth by powerful House Speaker Michael Madigan, D-Chicago, with bipartisan support, which would cap cost-of-living increases for state workers. It also says that the size of the state’s workforce is not subject to collective bargaining.
Illinois is broke to the tune of $200 billion. The average Illinois state employee cost-of-living allowance during the past five years was 4.25 percent, while the Consumer Price Index has averaged an increase of 1.95 percent between 2007 and 2010, according to the resolution.
The General Assembly may have the “power of the purse,” but it has no say in what goes into contracts. The governor essentially can write checks that lawmakers can’t back.
For example, ex-Gov. Rod Blagojevich, now serving time in federal prison for unrelated corruption charges, negotiated a 10-year contract with the American Federation of State, County and Municipal Employees in 2002 that was called one of the best public-employee contracts in the nation.
“OK, so you got a very good contract, and now we’re in a calamity,” said Rep. Ed Sullivan, R-Mundelein. “Our concern from the General Assembly is we can’t afford it. We don’t want to get into more problems were we get sued because we don’t appropriate the money. That’s where we get involved. What’s the answer?”
It’s part of an effort to control spending and let those at the bargaining table know that raises are all but out of the question.
A Quinn spokesman on Thursday would not say if Quinn would abide by a cap set by the Legislature.
“This is a nonbinding resolution, and they took no action on it today. We were there to address questions and share information on immediate fiscal challenges and state of the budget,” said Abdon Pallasch, Quinn’s assistant budget director.
“To be clear, Gov. Quinn’s administration is focused on comprehensive pension reform to rescue the system, ensure public employees have access to benefits and prevent out of control pension costs from eating up core services like education and health care.”
But even though it’s a nonbinding resolution, it’s still a message from the General Assembly to the governor and the unions.
“That’s all it is. It’s saying this is the will of the House. Just by holding hearings on it even before the vote on it they’re sending a message,” said Christopher Mooney, a political science professor at the University of Illinois at Springfield, noting that the “message” can be cranked up even stronger — by getting the Senate to pass a companion resolution or by passing actual legislation instead of a resolution.
“This is sort of a first step. It’s not just Quinn (that Madigan) is sending a message to. He’s sending a message to both sides in these negotiations. He’s trying to shore up Quinn’s backbone to not succumb (to pressure) and sending a message to the unions saying, ‘Look, if you didn’t notice, we’re pretty broke here and we’re hoping we don’t see any raises come through on this, or any significant raises,’” Mooney said.
Unions see the resolution as a threat to their collective-bargaining rights and argue that they’ve done their share to ease the financial burden on the state by foregoing pay raises, agreeing to furlough days and other negotiated measures.
Henry Bayer, director of AFSCME Council 31, which represents about 35,000 state workers, said those negotiations occurred through the collective-bargaining process “without any need for any House resolutions about what should take place at the bargaining table.
“We understand the realities. We also understand the budget problems the state is experiencing are not the result of collective bargaining, nor are they the result of unduly enriched state employees,” Bayer said. “The problems our state (is) confronting are due in large part … to a fiscal collapse that took place in 2008 that we can thank Wall Street and the financial community for.”
Quinn’s negotiations with AFSCME began in 2009 after he stepped into the Governor’s Office on the heels of the impeachment of his predecessor, Blagojevich. Quinn tried to lay off 2,600 AFSCME workers in 2009, but the union successfully sued to stop the layoffs. The two then worked out a plan to defer raises until July 2011 and cut costs through voluntary furloughs and health-care savings.
In 2010, Quinn, facing a tough gubernatorial election against Republican state Sen. Bill Brady, brokered a deal with AFSCME that called for no layoffs or state facility closures for two years. In exchange, AFSCME agreed to concessions on salary hikes, health-care costs and furlough days. The concessions amounted to about $400 million.
Quinn hailed it as a breakthrough in negotiations with a union that was not obligated to come to the bargaining table. Brady, however, called it a “scandalous” “pay-to-play” scheme, noting that AFSCME endorsed Quinn days after the deal.
Brady warned at the time that the no-layoff deal could tie the hands of the General Assembly and the governor in the future, as the state’s budget picture became bleaker.
AFSCME and Quinn denied any link between the endorsement and the deal, and Quinn pointed to the two-tier pension-reform system he signed into law earlier in 2010, despite heavy union opposition, as proof that he was not in the union’s pocket.
Fast forward two years to the summer and fall of 2012. The state’s financial picture worsened dramatically since the 2010 deal was struck and since the 2002 contract was negotiated. The state has $9 billion in unpaid bills, according to the figures provided by the state comptroller’s office Thursday. Illinois’ unfunded pension liability stands at $95 billion or more – the worst in the nation.
All told, Illinois is about $200 billion in debt, including the unfunded pension liability, bonded debt costs and unpaid bills. The state’s bond rating also has been downgraded. And the state’s revenue is nowhere near the level needed to address its debt.
Quinn earlier this year ordered closures of correctional facilities statewide, including prisons in Dwight and Tamms, juvenile facilities in Joliet and Murphysboro and adult transition centers in Carbondale, Decatur and Chicago. AFSCME filed a lawsuit in far southern Illinois to stop the closures, and the matter is tied up in arbitration.
Also on the chopping block is the state-run Jacksonville Developmental Center, a home for developmentally disabled adults. Residents’ families protested the closure, but a state board that oversees such closures signed off on it several weeks ago.
Meanwhile, the General Assembly was faced with unpleasant funding decisions that came down to choices like pay raises or medical care for sick children, and pension funding or money for schools.
But the question remains: who is running the show?
“It’s a dance. Generally, it’s a two-way thing, but because the budget is in such bad shape, the General Assembly is going to get involved,” Mooney said. “Nobody is in the driver’s seat, per se. They’ve all got interests in what happens with this negotiation and with every negotiation with the unions.”
Unions, Mooney added, actually may be in the weaker position these days because the budget is so bad.
“Management and labor always come to the table, and management always cries poor. But in this case management is going to cry poor and everybody knows they’re right,” he said.