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*** UPDATED x2 *** The ugly art of sausage-making

Wednesday, Sep 21, 2011

* Laws like this one, which give some union leaders huge city pensions for city jobs that they left years ago, are a big reason why the General Assembly stopped routinely using conference committee reports a long time ago

Because the law bases the city pensions on the labor leaders’ union salaries, they are reaping retirement benefits that far outstrip the modest salaries they made as city employees. On average, their pensions are nearly three times higher than what the typical retired city worker receives. […]

In April 1990, then-Sen. Emil Jones presented a bill aimed at increasing pension benefits for city employees in the municipal pension fund. Other members of the Senate and the House also added provisions before the bill passed both chambers by the summer.

The bill didn’t include the perk for labor leaders at that point, records show. But because the versions passed by the two chambers differed slightly, each chamber appointed five members to a conference committee to iron out the differences.

Although the 10 lawmakers were supposed to reach a compromise on what had passed already, during their meetings more than 100 provisions were added to the bill. The new, much larger bill included the pension deal for labor leaders.

“These provisions incorporated within this bill have been agreed to by the (city) administration and the pension system and the laborers,” Jones told his Senate colleagues the day the bill passed in January 1991. “The people in the city of Chicago came together and agreed.”

The conference committee report obviously became a grotesque pension Christmas tree. I seriously doubt that anybody knew and understood all the provisions of the bill, or even most of them. And I’ll bet it got almost no debate.

Conference committees were a joke. The committees rarely if ever met. And since we’d see so many of them near the end of session, nobody could keep track of what was in the things, so somebody was always trying to sneak something through. And those folks usually succeeded. I wrote a story years ago about an attempt by AT&T to deregulate the telephone industry via one line buried deep within a big conference committee report. The report actually passed one chamber before it was finally halted.

While still legal, they are rarely used now, and that’s a good thing.

The other difference between now and then was nobody really gave a fig about the consequences of pension proposals like this one. Legislators just couldn’t, didn’t, or wouldn’t imagine the enormity of the problem they were creating. They also didn’t care. Most also probably figured that if things did get bad they’d be long gone. They were right about that. Only a tiny handful of legislators who were here in 1990 are still around today.

With all of our problems, the House and Senate are much better run institutions now than they were in the past.

*** UPDATE *** The mess is even worse than I thought. This bill was passed on the last day of a lame duck legislative session on the same day that 15 other conference committee reports passed. Jim Thompson signed the bill into law the morning before Jim Edgar was sworn in as governor. The Christmas tree was also apparently passed to get the Senate Republicans to support funding for a Chicago teacher pay raise.

Also, this is from the Trib story…

None of these pension deals could happen without the blessing of city government, which has granted lengthy leaves of absence to union officials. The average leave of absence for city employees who are on a leave to work for a union is nearly eight years. Roughly a third have been on leave for more than 12 years.

None of this could’ve happened without the city. The city didn’t have to agree to these pension deals, but it did. The city is really to blame here.

*** UPDATE 2 *** From Illinois Issues’ February, 1991 issue

The heaviest piece of work that lawmakers tackled was a 252-page omnibus pension bill. Sponsors had tried and failed to get agreement on the bill during the spring session and again in November. The measure increased benefits to workers covered by 14 public pension systems. The new legislation increased the liabilities of the systems by nearly $300 million will raise the annual costs to those systems by more than $35 million. Most of those costs are for Chicago systems. For the five statewide systems the increase in liabilities is about $15 million, and the increased annual cost totals about $1.5 million.

The largest costs will be borne by Chicago pension systems and were approved after Chicago, the pension systems and workers agreed to the changes. There are increases for others, too. Retired downstate teachers saw an increase from 50 percent to 75 percent in the pension system’s share of their health insurance costs.

The bill also contained a not-so-new element, as lawmakers repassed the pension funding swap that they had voted in June and November, which allowed the Chicago Board of Education to pay negotiated salary increases to its teachers. The plan to tap two existing property tax sources - $51 million used for pension payments and $15 million that would go to the building fund - had gotten only a majority vote approval in November. Questions over whether the measure should have required a three-fifths vote had opened the door to legal action. By repassing the measure after January 1, when a simple majority vote was needed, lawmakers foreclosed such a challenge.

Inclusion of the once controversial pension swap prompted some Senate opposition to the omnibus bill. Republican senators had twice rallied against the pension swap, saying it would create future problems. Sen. Calvin W. Schuneman (R-37, Prophetstown) cautioned that the pension swap was not agreed to by all parties, as was everything else in the package. “Most of the provisions that are in this bill are Chicago pension sweeteners, and there really isn’t very much in this bill for downstate interests,” Schuneman said. Despite his effort, the measure picked up Republican support and got 37 Senate votes. The measure got 99 votes in the House.

[ *** End Of Updates *** ]

* Meanwhile, one of the things I noticed in yesterday’s Tribune story about Senate President John Cullerton and the gaming bill was that there was no direct quote on this particular topic

The North Side Democrat also said he’s willing to scrap plans for year-round horse racing with slot machines at the state fairgrounds in Springfield.

* The Trib didn’t post the audio of the interview, so there’s no real way of knowing exactly what was said, but the comment caused some consternation among Springfield legislators

State Rep. Raymond Poe, R-Springfield, who has urged that harness racing, along with slot machines, be allowed at the fairgrounds for nine months of the year, said he will vote against any compromise that takes the fairgrounds out of the mix. State fair patrons already can bet on harness races during the fair itself.

After expenses, 50 percent of revenue from harness racing and slot machines at the fairgrounds would go to improve the site’s infrastructure. The other half would bolster county fairs and Future Farmers of America and 4-H programs. […]

State Sen. Larry Bomke, R-Springfield, said he also was disappointed to hear talk that the fairgrounds could be left out of the gambling bill. Bomke noted that the bill, which provides for new casinos in Chicago, Danville, Park City, Rockford and the south suburbs of Cook County, also provides funding for soil and water conservation districts, historic sites and state parks.

If money for those items is deleted along with funds for county fairs and agriculture education programs, “that doesn’t leave much for a downstater to support,” Bomke said.

* Cullerton’s spokesperson clarified her boss’ remarks via e-mail…

He supported the state fairgrounds provision in the gaming bill and voted for it.

However, he is open to reconsidering that component of the bill if it addresses some of the Governor’s concerns.

If they dump that State Fair provision, they’ll have to find more votes in both chambers to pass another bill. That’s not going to be easy, to say the least.

This gaming proposal is not a pretty bill by any means. But the provisions are pretty carefully balanced to achieve the goal of passage. Most of the complaints about oversight and regulation can be dealt with without hurting the bottom line of 60 votes in the House and 30 in the Senate, but they won’t be able to take too much out of this bill before the whole thing falls apart like a house of cards. There’s a reason why it’s taken decades to pass a bill to approve new casinos. It’s extremely hard to do.

- Posted by Rich Miller        


29 Comments
  1. - Anon - Wednesday, Sep 21, 11 @ 11:50 am:

    Seems like Union Leaders are actually CITY EMPLOYEES!

    Conflict of interest? A little research will show where labor PAc money goes……trail ends on the south side


  2. - Old Democrat - Wednesday, Sep 21, 11 @ 12:00 pm:

    The way the union leaders have taken care of themselves is outragious. How can they do this with a straight face.


  3. - Cheryl44 - Wednesday, Sep 21, 11 @ 12:06 pm:

    I’m pro-union, but that’s ridiculous. The pension should be based on what they made working for the city or the union should be paying that portion that’s based on working for the union.


  4. - Sprinfgield Watcher - Wednesday, Sep 21, 11 @ 12:09 pm:

    Rich,
    Sounds like you’re trying to defend the indefensible.


  5. - Rich Miller - Wednesday, Sep 21, 11 @ 12:17 pm:

    What am I defending?


  6. - wordslinger - Wednesday, Sep 21, 11 @ 12:30 pm:

    These union boss swindlers do more damage to public union employees than an army of Scott Walkers could.

    When people hear “public employee pensions” they think of these guys and the suburban school sups pulling down six figures.

    The janitors, food service workers and such are made to wear the jacket for working-class heroes like Gannon.


  7. - jeff - Wednesday, Sep 21, 11 @ 12:31 pm:

    I think the whole pension situation is not a bug but a feature. They passed laws and enhancements that they had no plans to pay for and did not care because they were creating nice pensions for themselves. It was easy money for them and now we are left with the tab.

    I do find it hard to believe that the pensions that the union employees are getting falls under the state constitution of being untouchable.

    Rich I read this blog because you are obviously well in tune with the state. I wish I could share your optimism that the body is better today than 20 years ago.


  8. - Steve Bartin - Wednesday, Sep 21, 11 @ 12:35 pm:

    Rich:

    While you aren’t defending the heist: you don’t see too outraged. One has to wonder constitutionally why Illinois taxpayers should be on the hook for pensions based on compensation given outside governmental appropriations process. The Chicago Sun-Times reported , a while back, that one of the unions thugs getting this pension deal is Bruno Caruso of Chicago Mob fame.


  9. - downstate hack - Wednesday, Sep 21, 11 @ 12:47 pm:

    Shorting the horse racing industry in the gaming bill is absurd. This industry provides local jobs many in depressed rural areas and can save a struggling industry. One only has to look to Florida as an example. The areas around Gulfstream and Calder race tracks show tremendous private investment and generated millions in the horse breeding and training industries as the small casinos reviewed horse racing in the areas.


  10. - Glass is half full - Wednesday, Sep 21, 11 @ 1:05 pm:

    can you negotiate a fair contract for your members when you know if you play nice there’s abaft pension waiting?


  11. - Glass is half full - Wednesday, Sep 21, 11 @ 1:06 pm:

    Sic haft = fat


  12. - chi - Wednesday, Sep 21, 11 @ 1:15 pm:

    While I’m not saying this was a good deal for the public, no one “swindled” anything.


  13. - Rich Miller - Wednesday, Sep 21, 11 @ 1:20 pm:

    ===While you aren’t defending the heist: you don’t see too outraged. ===

    I did the outrage thing weeks ago. Just because I don’t foam at the mouth like you do, doesn’t mean I’m not opposed to this stuff.

    In other words, bite me.


  14. - Glass is half full - Wednesday, Sep 21, 11 @ 1:21 pm:

    unless you count the false affidavits from Villanova


  15. - wordslinger - Wednesday, Sep 21, 11 @ 1:30 pm:

    –Although the 10 lawmakers were supposed to reach a compromise on what had passed already, during their meetings more than 100 provisions were added to the bill. The new, much larger bill included the pension deal for labor leaders.–

    I don’t think “swindle” is out of line in this case. No one can remember ever hearing anything about this provision — even the folks who were on the conference committee. Either there was some deception then, or there is some deception now.


  16. - tberry - Wednesday, Sep 21, 11 @ 1:43 pm:

    Not only is there little outrage over the union leaders pension raids, I have NOT seen any suggestions that this be reversed or prosecuted. WHY NOT?


  17. - Coach - Wednesday, Sep 21, 11 @ 1:50 pm:

    ===Not only is there little outrage over the union leaders pension raids, I have NOT seen any suggestions that this be reversed or prosecuted===

    Whom shall we prosecute? Every member of the GA that voted for the bill?


  18. - Plutocrat03 - Wednesday, Sep 21, 11 @ 1:51 pm:

    “no one “swindled” anything”

    Really?

    I see two paths, one where a loophole was inadvertently created. In that case the swindle occurred by the pensioner used the law in a way it was never intended. Secondly, more improbably, the loophole was deliberately put in as a benefit to a select few for political consideration. That would be a swindle as well.

    I would bet on the first case, but this being Illinois the second case would not surprise me.


  19. - Anonymous - Wednesday, Sep 21, 11 @ 2:02 pm:

    1990, groteseque pension Christmas tree, most didn’t realize what the enormity . . . Gee whiz who ran the chambers back then? Let’s see Senate president was Phil Rock and House speaker was uh who? Obviously two guys who had no clue what they were doing.


  20. - chi - Wednesday, Sep 21, 11 @ 2:15 pm:

    Glass is Half Full-
    I agree, if there were false affidavits, that’s a different story.

    Plutocrat03-
    You’re implication that a person who takes advantage of the way a law is written is a swindler creates an ungodly amount of swindlers, including all Fortune 500 companies, accountants and their clients, churches, and attorneys.

    If the second case (where the provision was intentionally made law knowing the effect it would have), you’ve got a smaller but still enormous class of new swindlers, including ComEd and other utilities, those same Fortune 500 companies, and every special interest that’s ever successfully passed something through the legislature.


  21. - Bill - Wednesday, Sep 21, 11 @ 2:18 pm:

    They knew exactly what they were doing and nobody did it better back then.


  22. - A Union President - Wednesday, Sep 21, 11 @ 2:25 pm:

    How many people does this apply to? I am a city employee and Union President. I work my regular shift and get no additional pay from the city. I get my union dues reimbursed from the union. That is my total compensation. The President of our STATE asssociation doesn’t even fall under this “loophole”. I agree it is wrong, but what kind of numbers are we really talking.


  23. - Cincinnatus - Wednesday, Sep 21, 11 @ 2:30 pm:

    thus reinforcing my long held belief that union bosses are in it for their own gain, and could give a damn about the rank-and-file. Union members should be outraged at their leadership. I propose one simple change to the current system, stop the automatic deductions from paychecks for union dues. Once members have to write a monthly check, the will begin to reform their unions from within.


  24. - Glass is half full - Wednesday, Sep 21, 11 @ 3:22 pm:

    it’s all over once someone sues the executive director of the municipal employees pension fund. he has a fiduciary responsibility to city employees and retirees. For him to say “Pay back the unions” and we’ll let this go is criminal.

    How well do you think he does in the deposition process?


  25. - chi - Wednesday, Sep 21, 11 @ 3:30 pm:

    One can look out for his own financial well being while still fighting for the well being of others. This provision was made law long before any of the people mentioned in the Tribune story had any clout in Springfield. So you are condemning them for taking advantage of a law already in place, and claiming they can’t represent their members without conflict because of it. That’s a little illogical.

    Also, I’d be interested to see how many of you would decline the pension perk that you had no part in implementing. When’s the last time you turned down a raise or gave back some 401k money?


  26. - Glass is half full - Wednesday, Sep 21, 11 @ 3:52 pm:

    Chi: when’s the last time you filed false affidavits?

    The law is the law and God Bless anyone who improves their financial situation legally.


  27. - chistar - Wednesday, Sep 21, 11 @ 8:42 pm:

    Great historical perspective as usual on this site. Rich is right, the City knew and sometimes actively weighed in in favor of these sweeteners. It was as indefensible then as it is now. They knew; they didn’t care.


  28. - wishbone - Wednesday, Sep 21, 11 @ 10:02 pm:

    “Thompson signed the bill into law the morning before Jim Edgar was sworn in as governor.”

    Big Jim, buddy to George Ryan and consigliere to the republican mob. Are there any depths to which he would not sink? Crusading U.S. Attorney to this.


  29. - Institutional Memory - Wednesday, Sep 21, 11 @ 11:54 pm:

    wishbone -

    Here here!

    Wasn’t the period between the election of 1990 and the swearing in when Jim Thompson (and Jerry Cosentino)sweetened the deals for Bill Cellini and Gary Fears?


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