No Vote on Madigan's Pension Proposal

A proposal by House Speaker Michael Madigan (D-Chicago) to divert billions of dollars from local taxing bodies to the massively underfunded Teachers' Retirement System did not go to vote Wednesday, the Associated Press reports.

Madigan added three amendments to House Bill 3637 on May 11, which would allow the state to tap into the Corporate Personal Property Replacement Tax to help cover teacher pensions.

Under the proposal, local governments—including municipalities, schools, libraries and park districts—could lose as much as $1.4 billion from the CPPRT, a 2.5 percent tax on corporations that is collected by the state and earmarked for local governments.

The amendments were scheduled to be discussed during a House Executive Committee meeting Wednesday afternoon, but ultimately were not considered. However, they could come up for discussion again in the future, according to Joe McCoy, legislative director for the Illinois Municipal League.

"Despite the lack of movement, however, we strongly recommend that local leaders continue to press their legislators to oppose the diversions," McCoy wrote on the IML website. "It is always possible that the amendments could be considered at a later date."

A Madigan aide told the Associated Press on Wednesday that the idea was introduced for discussion purposes, but the effect "was to mobilize mayors and city managers from every corner of Illinois."

Read more: Illinois speaker targets local money for pensions

Illinois currently has an $83 billion unfunded pension liability—$44 billion of which is from the Teachers’ Retirement System (TRS). The state has to come up with $5.1 billion for pensions next year.

One of the most talked about scenarios involves the , which administrators and board members believe will inevitably end up on the backs of taxpayers. 

McCoy said the purpose behind Madigan's proposal was to bring up an idea so unpopular, people might start to embrace the shift to school districts.

Oswego taxing bodies received the following CPPRT disbursements between July 2010 and June 2011, according to the Illinois Department of Revenue:

• $10,397
• $34,029 
• $110,139
• $59,087
• $1.9 million
• $55,001
• Oswego Township Road and Bridge: $169,424

The state's budget deadline is May 31.