Following BGA Analysis, Sen. Cullerton Introduces Plan to Limit Rich Severance Packages

Cullerton legislation was prompted by BGA examination of multiple golden parachute cases that cost Illinois taxpayers millions along with research on best practices in other states.

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Solomon Lieberman / BGA

SPRINGFIELD--Sen. Tom Cullerton (D-Villa Park) introduced Senate Bill 3604 which will limit exorbitant severance packages for public executives in a move aimed at restoring taxpayer trust in government.

Not only do Illinoisans face years of budget deficits, cuts to social services, and tax increases, they also foot the bill for six-figure severance packages, known as golden parachutes, for public executives who leave their jobs under questionable circumstances. Cullerton introduced the bill after the Better Government Association (BGA) examined public severance limitations in other states and outlined multiple cases of golden parachutes in recent years that left Illinois taxpayers footing millions of dollars in payouts to make bad executives go away.

Senate Bill 3604, the Government Severance Pay Act, will stop employees fired for misconduct from collecting a severance altogether and it will limit severance packages for other public executives to a maximum of 20 weeks’ compensation. The legislation gives governments in Illinois the ability to remain competitive while eliminating abuses that fuel taxpayer distrust.

Elected government officials frequently are advised to grant rich severances in an attempt to head off employment litigation. By adopting the Government Severance Pay Act, state lawmakers can set a clean, clear plan that will eliminate those thorny decisions for elected officials, just as is done in Florida and other states.

“It’s time to get control of these huge buyouts for public executives and institute some best practices,” Cullerton said. “Taxpayers deserve to have their hard-earned money protected. Let’s end these golden parachutes now.”

“Time and time again,” said BGA President and CEO David Greising, “government officials who are found abusing the public's trust are allowed to walk away not just unpunished, but, in fact, rewarded. The Government Severance Pay Act acknowledges that severance packages are a part of today’s competitive employment market, while at the same time protecting taxpayers from six-figure giveaways.”

The BGA examined golden parachute packages last fall and found nine recent instances at Illinois universities, Metra and elsewhere that cost taxpayers more than $5 million.

Since that time, Des Plaines Elementary District 62 officials granted a $127,000 severance to former superintendent Floyd Williams Jr. following accusations he denied that he had sexually harassed employees. In northwest suburban Vernon Hills, elected officials asked the long-time village manager John Kalmar to leave recently, but have provided few details on a financial settlement or the reasons for it.

The Government Severance Pay Act: Restoring trust in government by ending golden parachutes

Golden Parachutes

Not only do Illinoisans face years of budget deficits and debt, cuts to social services, and tax increases, they also foot the bill for expensive severance packages for public executives who are asked to leave their jobs in questionable circumstances. Recent severance packages, or golden parachutes, have cost taxpayers millions of dollars. Reform is needed to rein in these payouts, stop the abuse, and restore accountability.

Proposed Change

The Government Severance Pay Act will allow government to remain a competitive employer while eliminating severance package excesses. The act requires that all future severance package agreements entered into by any unit of government in Illinois:

  • Limit severance pay to a maximum of 20 weeks’ compensation.

  • Eliminate severance pay in cases where employees are fired for misconduct, such as criminal assault, battery, abuse, or neglect in the workplace.

Currently, Illinois law only places severance restrictions on community colleges and state universities.

Models from other states

Several states including Minnesota, California, and Idaho restrict the severance pay of some or all public employees. Since 2011, Florida has restricted severance pay for any “officer, agent, employee, or contractor” to no more than 20 weeks’ salary.

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