Top lawmakers pushed Thursday to cut jobs and pensions from state workers as a way to balance the state budget.
After a meeting of top legislative leaders with Gov. Pat Quinn, lawmakers' focus shifted to cutting state spending after their failure during the legislative session to support the governor's proposal to raise income taxes.
Quinn conceded the need for cuts, but he and Senate Democratic leader John Cullerton of Chicago maintained there still will have to be some tax hike to close a $12 billion budget hole.
"We're going to need new revenues when all is said and done," Quinn said.
House Speaker Michael Madigan, a Chicago Democrat, said the leaders are trying to work with budgets passed by lawmakers that the governor has refused to sign because he says it would have too great an impact on social services.
Madigan said the leaders are trying to determine at what percentage of the current spending the state can reasonably function.
"I think there will have to be some very significant layoffs," he said.
He also said there was "good progress" on pension reform, to model pensions for state workers on Social Security, and raise the retirement age from 60 to 67, while reducing benefits.
The pension changes would not affect the new budget, but would help make the state solvent in the long run, the leaders said. Such pension changes would meet fierce opposition from labor unions.
State employees make an average of $18,000 a year from pensions, which costs only 8 percent of payroll, which are relatively low levels, according to Anders Lindall, spokesman for the Association of State, County, and Municipal Employees in Illinois, which represents almost two-thirds of the state's 55,000 workers.
The association instead supports an income tax hike to 5 percent, coupled with a property tax cut.
But State Senate Republican leader Christine Rodogno of Lemont, who attended the lawmakers' meeting, said the focus of discussion had shifted from increasing revenue to cutting spending, job creation and ethics reform, which she said must come before discussing tax increases.
The moves are designed to appeal to Republicans whose votes are now needed in order to pass a budget before the state's fiscal year ends on June 30.
Quinn said there will have to be cuts in spending, but they should not come at the expense of the neediest in society - the poor, sick and mentally ill.
"There's going to be an attitude I think of compromise, so that we can have a good, humane, decent budget, but it's going to be a no-frills budget," he said. "We have to cut some costs. We have do some painful things."
House Republican leader Tom Cross of Oswego added that cuts must also affect Medicaid and other programs.
"We are going to insist on finding ways to structurally change the way we run Illinois from a budget standpoint," he said, "before we have any other discussions about revenue."
State Sen Kathy Ryg, a Vernon Hills Democrat, has been tracking pension reform discussions at the Capitol, and agreed changes are needed.
"I think it's clear that it's fiscally irresponsible," she said. "We can't sustain the pension systems as they exist. And it's complicated by years of underfunding, which is completely the state's fault."
After meeting with government employees and teachers in her area, she said there's support for moving forward.
What's often misunderstood, Ryg said, is that any changes wouldn't affect existing employees or teachers, whose benefits are protected by the state Constitution.
Changes would apply only to those hired after any new system takes effect.
Legislative staff members will continue negotiations until the legislative leaders meet again Tuesday.
• Senior state government editor John Patterson contributed to this report.