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A truly messed up situation

Friday, Jul 27, 2012

* My Sun-Times column

I spent some time at my Uncle Kenny’s house in Ashkum last weekend. We went to the Iroquois County Fair, which is like taking a step back in time.

The fair hasn’t changed much at all since I was a kid. They still don’t allow alcohol on the clean grounds where kids safely run free.

I was at that fair every day back when I was growing up, often accompanied by my Uncle Kenny.

I’m the oldest of five sons, so Kenny was like my big brother growing up. It was a nostalgic weekend, and it felt like old times.

Kenny worked hard all of his life, putting in more overtime hours as a state groundskeeper during blizzards and mowing season than I could count, and he finally retired after then-Gov. George Ryan signed early retirement legislation shortly before leaving office.

I insisted that Kenny take the early out because I knew incoming Gov. Rod Blagojevich was a vindictive little jerk. I told Kenny I had a strong feeling that things were going to get rough with this guy and if Rod ever found out that I had a state employee relative, then either Kenny would be in a world of hurt or I’d be put in a very difficult spot, or both.

Kenny mows lawns to supplement his modest state pension. He’s not one of the few greedheads you read about all the time. Kenny followed the rules, he didn’t game them. You’d think by reading some of the media coverage that all public employee retirees have huge incomes and laugh at the taxpayers every time a bloated pension check arrives in their gold-plated mailboxes.

Not true.

Kenny doesn’t charge much for his side jobs, but he may have to raise his rates soon.

We as a state have a problem. A big problem. For at least 60 years, Illinois has never consistently made its full payments to the pension systems and kept promising to pay out more benefits than it could afford.

A payment plan approved in the 1990s kicked the solution down the road, but the resulting payments ended up being so high that Gov. Blagojevich and the General Assembly decided not to make them. So, now we’re even deeper in the hole, and last year’s $7 billion income tax increase couldn’t solve the problem.

If the current pension reform package that’s on the table becomes law, my Uncle Kenny will have to make some difficult choices about whether to give up his compounded cost of living increases every year or his state subsidized health insurance. He’ll survive, but it’ll hurt.

Nothing stays the same, I suppose. I used to bring a steer to the fair every year and competed against dozens of fellow 4-H members. But the competition eventually got out of hand. Parents were spending small fortunes to gain even a slight advantage for their kids’ animals. This year, only a few steers were shown. Times are just too tough to be spending that much cash.

But we as a state can’t just stop making pension payments because the costs are too high and times are too difficult. Another way has to be found.

The taxpayers have done their part to address the pension deficit with that income tax increase, which is about equal to a week’s pay every year. The retirees (who pay no state income taxes on their pensions) and the active employees are going to have to pitch in to save the system.

This situation truly sucks. People like my uncle shouldn’t have to be targeted. But so far, I’ve seen no other way to do it.

Discuss.

- Posted by Rich Miller        


63 Comments
  1. - geronimo - Friday, Jul 27, 12 @ 9:15 am:

    Thank you Rich for stating once again that the few “greedheads” are the extreme rarity. The Tribune and Civic Committee would have all their misinformed readers believe that all public pensions exceed 100K. Retirees would consider themselves blessed if it were even half that (with no social security to supplement.)These 2 sources, in particular jumped out front with all those distorted lies and have shaped public opinion with “facts” that are just plain wrong. I realize some desperately WANT to believe those lies but they are the ignorant and uneducated about the truth. Thanks for painting a more realistic picture of your average state retiree. Yes, something will need to be done but there are LOTS of options, some more painful than others.


  2. - Anonymous - Friday, Jul 27, 12 @ 9:16 am:

    May be a good poll question Rich. For state employees: Would you be willing to contribute more to your pension and if so, how much? I am a state employee and as you can imagine we talk about this all the time in the office. The consensus is yes we would…but of course no one has asked us.


  3. - RNUG - Friday, Jul 27, 12 @ 9:21 am:

    I feel for your uncle. He’s in the same Catch-22 all of us who played by the rules are.

    I would argue that the temporary 1.5% income tax increase was never meant to permanently fix the pension mess; all it was intended to do was kick the can down the road between two and five more years … and they were clear about that at the time if you bothered to read as far as paragraph 15 of the stories. The permanent 0.5% was intended to fix the structual deficit the State runs every year of about $8B, but the State never followed through on issuing the bonds intended to fix that portion either.

    I’ve said before, and I’ll say it now, as a retiree I would have no problem with the state starting to tax pensions if they leave the COLA and insurance alone. I’d much rather pay 5% of my income than what is going to be about 20% in just health insurance costs and doesn’t include any increased property taxes from any school pension shift.

    Since such a tax would also capture Social Security and private pensions, I do think there should be an amount that is exempted before the tax kicks in. I’m sure different people will have their idea of what would be fair to exempt. I would propose the exempt amount be either the average Social Security payment or totally exempt all Social Security income … that way the people who only have SS and depend on it would not be affected.


  4. - Leave a Light on George - Friday, Jul 27, 12 @ 9:35 am:

    “I would have no problem with the state starting to tax pensions if they leave the COLA and insurance alone.”

    “Since such a tax would also capture Social Security and private pensions, I do think there should be an amount that is exempted before the tax kicks in.”

    X2. This is a reasonable solution to a very big problem.


  5. - ANALYSTD - Friday, Jul 27, 12 @ 9:36 am:

    Special taxes, and that’s what it will be, cannot be the answer to the larger revenue problem. And remember that the retirees also paid the most recent raise in income taxes — so taxing their pension income more and assessing them more out-of-pocket for health care becomes a double whammy. Retirement and health benefits have been a cost-of-doing business for decades, so the fix has to be a function of universally-applied taxes and/or re-alignment of spending priorities. As Ralph Martire explained, the problem is not the benefits, it’s the borrowing against those benefits by the State that caused the problem.


  6. - soccermom - Friday, Jul 27, 12 @ 9:38 am:

    We would do so much better if we all agreed that the 1995 pension legislation was a huge mess and should be scrapped. In the words of the Pension Modernization Task Force: “During the first 15 years of the Pension Ramp, the State’s employer contribution was set at levels that continued the practice of not making the full actuarially required employer contribution, thereby increasing the unfunded liability amount.” And once the 15 years of underpayment were completed, the paybacks were set at insanely high amounts. Yes, we need to make reforms. But one of the first reforms should be revision of the 1995 legislation so we’re not boxed in to an artificially high repayment plan to meet an arbitrarily set goal date.


  7. - Rich Miller - Friday, Jul 27, 12 @ 9:45 am:

    ===And remember that the retirees also paid the most recent raise in income taxes===

    No, they most definitely did not. Illinois does not tax pension income.


  8. - Stuff happens - Friday, Jul 27, 12 @ 9:46 am:

    @Anonymous: I would *not* contribute more to my pension because I don’t trust the state to keep its word. They might change the rules again in another five to ten years.


  9. - geronimo - Friday, Jul 27, 12 @ 9:48 am:

    Taxing pensions after a certain exempted amount is a very do-able solution that I’ve heard many retirees say would be far more fair than eliminating their access to health insurance. But no one is interested apparently, to what the people making the sacrifice have to say about it.


  10. - Bigtwich - Friday, Jul 27, 12 @ 9:51 am:

    The retirees (who pay no state income taxes on their pensions)

    As RNUG pointed out retirement income in this state is exempt from state income tax. The exemption is not part of a state pension. Most states do not tax social security income. About 10 states do not tax pension income and another 7 do not have a state income tax but derive their revenue from other taxes. So, taxing this income is a policy decision, perhaps affected by the potential mobility of this population.


  11. - wordslinger - Friday, Jul 27, 12 @ 9:52 am:

    Well done, Rich. Damn well done.

    Kenny and folks like him aren’t the problem and never have been. My mom went to work at 4:30 a.m. ever day to make breakfast for the kids at NIU. She got paid chi-chi beans and her pension wouldn’t break glass.

    Somehow, I don’t think she and Kenny are the ones dragging capitalism down.

    I’d encourage everyone to read the Wall Street Journal every day. Do so with a critical eye and it will curl your hair. Capitalism is being killed by a generation of dull, cheap hustlers at the highest levels who would steal hot soup if their pants had rubber pockets.

    Yesterday, Sandy Weil, the uber-banker from Citibank, remorsed over his role in creating giant, reckless banks that gamble publicly guaranteed money in the casinos, but cannot be allowed to fail for fear of dragging us all down.

    He said repeal of Glass-Steagall was a bad idea.

    Oops.


  12. - Soccertease - Friday, Jul 27, 12 @ 9:53 am:

    As many of us have said time and again, the problem isn’t the benefit payouts, it’s the employer’s (the state) failure to fund their portion that caused this mess. The pension plan would be actuarially sound if the state had made anywhere near the actuarially required contributions. Interest earnings and employee contributions are the other two revenue sources for the pensions and over a long period of time with increased employer pension contributions would put the systems back on solid ground. Yeah, the burden will be on future employees and taxpayers but penalizing current retirees is just plain wrong and probably illegal too.


  13. - soccermom - Friday, Jul 27, 12 @ 10:00 am:

    Taxing retirement income (above a certain level) makes huge sense. That’s a way to recapture at least some of these oversweetened pensions that have so infuriated taxpayers. (And I am referring here not to the pensions of average folks, but to those insane pensions conferred by school boards on a few lucky administrators.)


  14. - Irish - Friday, Jul 27, 12 @ 10:05 am:

    I echo what others have said above. Thank you Rich for putting a human face to the problem and for pointing out that the “golden parachutes” are limited to few and most of them are tied to the very people who caused the problem and who now want to punish everyone.

    I too understand that something has to be done. However it is difficult to get to a solution when the Governor seems to be more interested in making an example of employees rather than finding a solution. For example currently the schedule of pension payments I believe is to get to the point of 80% funding of the pension funds. The payments could be reduced in the current fiscal crisis to reach a funding of a little over 50% which most people believe would be adequate, especially in the short term. Yet the Governor is pushing for an even higher percentage sometimes talking of near 100% funding.

    It is also difficult to negotiate in real faith when past negotiations and agreements have not been honored. The union members sat down with the Governor and made concessions he asked for and even went beyond what was required by showing places where even more savings could be found. The Governor did not follow up on a lot of those suggestions and then after the concessions were made did not honor his part of those agreements.

    Why he honor the agreements with some people and not others is completely beyond me. The steps were covered in the personnel code which is CMS territroy and supposedly affects all employees equally. The raises were part of a contract made with the state. Only supplemental agreements are made between the agencies and the union. And the raises were not in the supplementals. There would be no reason to then separate the employees by agency when deciding who gets a raise and who does not, unless there is another reason that is not fiscal. Could it be that the Governor is punishing those who are part of a group that is fighting him on removing certain position from bargaining unit status so he has more places to appoint supporters? Then this is not a fiscal issue and the taxpayers should be told that.

    How do the unions mand employees move forward with an agreement when you have people who have been rewarded and whose contract has been fulfilled and others who are now behind? If the union agreed to a wage freeze you still have two classes of people. This is one of the dilemmas facing the unions. How do you come to an agreeement when the playing field is definitely unlevel? Then to top it off the Governor has now changed the personnel code so that no steps are given at all. Yet he does not acknowledge any of these cuts he has made unilaterlally without negotiations and still wants to take more.

    The public needs to know that the unions and state employees have given up considerable ground already and no one is speaking of what savings those concessions will generate. The feeling amongst the state emplyees I talk to is that this has gone beyond a fiscal issue and has become a “Lets beat down the employees as much as we can because we have turned public sentiment against them and we need to get as much as we can from them while that feeling pervails.” It is difficult to come to constructive solutions under these conditions.


  15. - Long-Time Lurker - Friday, Jul 27, 12 @ 10:06 am:

    Thanks, Rich, for the reminder that there are many state retirees who do not have gold-plated mailboxes. It made me wonder if past legislation could be created to benefit a handful of people, why can’t new legislation be written to repeal or reverse the outrageous ones? I ask this question with all sincerity. I am not a political insider. I’m just a regular citizen who likes to read your blog to keep up on the political happenings in Illinois.


  16. - titan - Friday, Jul 27, 12 @ 10:08 am:

    This is one of your better peices on the pension/retiree mess the irresponsible legislature/executive branches (both parties at fault) have made.

    It does seem clear that current employees and retirees will have to take some hit, but I don’t believe it should be concentrated upon them. There is a state government/budget-wide shortfall. It apears to be a pension problem solely becuase that is where the legislature/executive did NOT fund what they should have. But the money that should have gone there was spent elsewhere (on everythign else the state spends money on - roads, welfare, medical programs, parks, schools, etc., etc., etc.) - everything ought to take a somewhat similar hit.


  17. - Small Town Liberal - Friday, Jul 27, 12 @ 10:17 am:

    Irish - Your fury is seriously misplaced. Exactly how is the gov making an example out of employees?

    As to the funding levels, I believe we’re currently somewhere between 50%-60%. The 1995 reform set a target of 90%.

    I agree that we don’t need to set a target of 100%, but the almighty rating agencies seem to think this makes complete sense. Since they seem to think state debt is less safe than mortgage-backed securities, we apparently have to listen to them.

    Perhaps you should target your ire toward them.


  18. - CaptHairyGerbils - Friday, Jul 27, 12 @ 10:19 am:

    Anonymous - if you are so worked up about contributing more to your retirement then why don’t SPEK UP and say something instead of waiting. Also, have you heard of a 457 plan? look into it.


  19. - M. Smith - Friday, Jul 27, 12 @ 10:20 am:

    A couple of years down the road, the state will have to book its unfunded liability on the face of its financial statements. That will be huge as now they just book the current funding shortfall & disclose the unfunded amount later as a footnote. Have to take action now.


  20. - Liberty First - Friday, Jul 27, 12 @ 10:31 am:

    The only way to fix the pension problem is to bring the payments under the constitutional pension protection. I think the IEA had a great proposal to increase the employee share while making the state pay. What is wrong with the state making its approximately 9% contribution of payroll plus the 27% payroll contribution to make up for the missed passed payments?


  21. - Anonymous - Friday, Jul 27, 12 @ 10:36 am:

    @capthairygrbls
    How does me putting more into deferred comp help the state pension? And if you have the gov’s personal cell# pass it on, I’ll call him.


  22. - Liberty First - Friday, Jul 27, 12 @ 10:37 am:

    M. Smith- Is too high a payment a reason to break a contract?


  23. - mokenavince - Friday, Jul 27, 12 @ 10:43 am:

    When politicans are incharge let the working man beware. They only make cuts to hard working people like your Uncle. Look how they grease the
    skids for their own,example R.M.Daley legislator for one term paid $17,000.00 a year gets it jacked up to over $75,000 a year when he retires.
    Guys like Uncle Kenny don’t have a chance for this type windfall.


  24. - walkinfool - Friday, Jul 27, 12 @ 10:44 am:

    Rich: great comments. Good people who have worked for us all, and retire on modest incomes, are the victims of the greedy few.

    Word: Sandy Weil, if we had to choose one from many, is the single person most responsible for the recent harm caused to most Americans, by Wall Street and our Banking System. I watched it first hand. Spitzer almost had him in jail, before his own fall from grace and power. Now Sandy has remorse. Well hooray for him!

    He made Billions for himself, his jamily, and friends. Did he say he’s giving back any of his ill-gotten gains? No, of course not — if it’s legal, and makes money, it’s moral and right for me to do.


  25. - lincolnlover - Friday, Jul 27, 12 @ 10:48 am:

    Small Town - What Irish is referring to is the fact that the governor allowed some state AFSCME employees to receive the bargained raises in the contract, but didn’t release the money for others. The contract has been extended for 90 days, but there is no indication that it will be resolved by that time, so will probably go to mediation. Meanwhile, the governor has stopped all step increases (which is how employees advance). That doesn’t matter much to me, since I have been at the top step in my job classification for almost 10 years. It does, however mean something to my son-in-law who started at Revenue just last August. He is a bright young man - the kind we want to reward and keep, but he is bright enough to go to another employer (taking his state training with him) if he is being financially hurt. Don’t think it matters? He personally collected over 18 million in back business taxes over the past year. For that, he received $32,000 and a kick in the pants from his employer. Irish is right - the worker bees are sick of being treated like numbers, not people.


  26. - Kasich Walker, Jr. - Friday, Jul 27, 12 @ 10:49 am:

    $80 some billion short?

    I could only come up with ways to raise about $262 million.

    I’d expect IL pols would be clever enough to figure out ways to get Exxon, Royal Dutch, WalMart, BP, Chevron, and Conoco to cover.

    There is always the Robin Hood Tax….or the state could pay employer contributions when they’re supposed to pay them.


  27. - ZC - Friday, Jul 27, 12 @ 10:49 am:

    Wordslinger, I am not convinced that the moral character of today’s financial elite is so different. But the incentives and rules sure are. It looks to me like a slow moving disaster when the top investment banks and firms became publicly traded. Any kinds of professional norms disintegrated in pursuit of the almighty dollar.


  28. - PQ's Primary Opponent - Friday, Jul 27, 12 @ 10:52 am:

    Don’t worry PQ and God will save us..


  29. - PublicServant - Friday, Jul 27, 12 @ 10:55 am:

    Rich, I liked the peice overall, but I don’t feel this statement is reasonable:

    ===kept promising to pay out more benefits than it could afford===

    That makes it seem like the current unfunded liability was caused by (1) the state not making its portion of the payments, and (2) that the benefits are excessive. While some people think any benefits are excessive, the illinois pension plan, when compared to other pension plans is not excessive at all. Uncle Billy doesn’t need to mow lawns due to his excessive pension benefits, afterall.

    This mess is solely caused by the state not making its portion of the pension payment. The pension benefits were and are “affordable”, and are not excessive in any way. Placing the blame where it belongs is a pre-requisite to finding an equitable solution to the problem.


  30. - Kasich Walker, Jr. - Friday, Jul 27, 12 @ 11:10 am:

    I am having difficulty finding how many pensioners are covered by the systems that are reported as unfunded by $86 billion and the length of the period meant to be covered by the assets of the fund.

    $86 billion is a lot of money when the median income is just over $50,000. Most of the pensioners are no doubt receiving a lot less than that, too. The state can’t have more than 10 million over 18 years of age.

    Dump equities in the pension funds and buy those supposedly too risky IL State issues. I understand IL issues have to pay higher rates now.


  31. - G'Kar - Friday, Jul 27, 12 @ 11:13 am:

    I don’t have much to add to what has already been said. Geronimo wrote what I wanted to say. I do want to say that I am always impressed by the quality of Rich’s writing and even more impressed by the quality of the feedback on this blog.


  32. - Nieva - Friday, Jul 27, 12 @ 11:32 am:

    I am unsure how many are drawing their pensions or how many are going to draw in the future but I wish someone would do the math and figure what it takes to pay us out to age 85 and cover the insurance to that time. They say we are 85 billion short. How much is in the fund now? I would take a check now for my total retirement pay without interest or raise and put that money some where else and take my chances. That adds up to around 900 Grand for me if I make it to age 85. So aroun a million for each state worker on average what would the totals cost?


  33. - Grandson of Man - Friday, Jul 27, 12 @ 11:41 am:

    I think it’s a great article. Rich’s views have been consistent. I have one of Rich’s articles on my wall at work from around December 2010, in which he states that yes, reforms are needed, but public servants shouldn’t be attacked. Rich has the same view today, as seen in his article.

    Our salaries and benefits may seem lavish to some, but many of us have to put in many hard years of work, and we don’t walk in the door earning top dollar. For many of us, it takes several years to earn significantly more money; we go thorough step pay increases per our contract.

    I liked some of the pension reform ideas I read here and elsewhere, such as lowering the funding ramp and doing something like “pay as you go,” since most of us won’t be around in 2045. I also read about amortization, spreading the debt over many years. I am not a pension expert, but if these ideas would work, they should at some point be considered to help ease the cuts.

    I feel very fortunate to be in AFSCME. Workplace conditions are very important to a lot of us. People tend to think of unions in regards to salaries and benefits, but we also fight for equitable treatment and respect. We filed a bunch of grievances lately and won them. One or two workers were suspended unjustly and lost pay, and we got their pay back for them. I feel great about that.


  34. - Chris - Friday, Jul 27, 12 @ 11:42 am:

    “So, taxing this income is a policy decision, perhaps affected by the potential mobility of this population. ”

    It is income “earned” in Illinois, so it *could* be taxed by Illinois, wherever the recipients choose to live.

    You may be right still, that that is part of the reason, but it’s a misunderstood reason.

    “Taxing pensions after a certain exempted amount is a very do-able solution that I’ve heard many retirees say would be far more fair than eliminating their access to health insurance. But no one is interested apparently, to what the people making the sacrifice have to say about it. ”

    That seems like a no-brainer start, but part of the problem is that the union “leadership” who would agree to that are the one’s who would get hit by the tax, and they show NO evidence of being concerned with the rank and file, and ALL evidence of protecting those with the gold-plated pensions above all.

    In general, the rank and file are getting screwed by their “leaders”, both union and legislative.


  35. - Kasich Walker, Jr. - Friday, Jul 27, 12 @ 11:56 am:

    It looks like there are about a quarter million combined currently receive benefits from TRS, IMRF, & SURS.

    If the funds have combined assets of close to $200 billion sell all the equities and buy State of IL issues at paying about 5%.

    Tell Moody’s to jump in the lake and consider it a hardship loan.


  36. - WhoKnew - Friday, Jul 27, 12 @ 11:56 am:

    LincolnLover “the governor allowed some state AFSCME employees to receive the bargained raises in the contract, but didn’t release the money for others”.

    Scuttlebut is that this has been mediated and the others (me included) will get made whole — What’s the word Rich.

    Maybe I should use some of that money for a Subscription to CAPITOLFAX!!!


  37. - Ralph - Friday, Jul 27, 12 @ 12:03 pm:

    “I insisted that Kenny take the early out because I knew incoming Gov. Rod Blagojevich was a vindictive little jerk.”

    Whoa…Whoa…WHOA….Why didn’t you give us a heads up about Blago, man?!?

    We could have used your advice back in 2002. You might have even been able to head off a disaster. Sheesh….


  38. - Rich Miller - Friday, Jul 27, 12 @ 12:03 pm:

    ===Why didn’t you give us a heads up about Blago, man?!?===

    I did.


  39. - M Smith - Friday, Jul 27, 12 @ 12:16 pm:

    Liberty - I realize there is a contract & also a complete derelict of duty of behalf of the pols we elected & kept electing. It is reality. I wish I could get what my pension & social security statements tell me I will be entitled to but look at what’s happening in Europe. Once Illinois can no longer borrow $, we are in trouble. That is typically how they have funded what little payments they’ve made in recent years.


  40. - RNUG - Friday, Jul 27, 12 @ 12:18 pm:

    Ralph,

    I worked on salary under Ogilvie, Walker, Thompson, Edgar and Ryan. It was obvious to anyone with one eye and one ear how bad it was going to be under Blago. Even my wife, who doesn’t follow polotics, didn’t trust Blago ..


  41. - Kasich Walker, Jr. - Friday, Jul 27, 12 @ 12:22 pm:

    Plenty of 401(k) plans include company stock options.

    Why wouldn’t defined benefit funds meant to support retired IL state employees invest in the State of IL, especially if the state is paying holders close to 5%?


  42. - Wensicia - Friday, Jul 27, 12 @ 12:25 pm:

    Good column. Retirees will pay more, taxpayers already contribute more, state workers will have to contribute more above the income tax increase. But, there is an upside.

    Our state politicians won’t be feeling any pain.


  43. - Way Way Down Here - Friday, Jul 27, 12 @ 12:26 pm:

    Not much left to say. I will give a shout-out to the Iroqouis County Fair Board for all the hard work they do. I used to save part of my bean-walking money every summer so I’d have plenty to spend at fair time.


  44. - Rich Miller - Friday, Jul 27, 12 @ 12:41 pm:

    ===This mess is solely caused by the state not making its portion of the pension payment. The pension benefits were and are “affordable”, and are not excessive in any way.===

    The pension benefits were obviously not affordable because the state hasn’t had the money to pay its full share in decades.

    Also, I never said they were excessive. Please don’t put words into my mouth.

    And his name is Kenny, not Billy.


  45. - lincolnlover - Friday, Jul 27, 12 @ 1:03 pm:

    Who Knew - Great to hear!


  46. - Crime Fighter - Friday, Jul 27, 12 @ 1:14 pm:

    Rich, I appreciate your description of Kenny’s situation and I think that policymakers need to consider what has been unthinkable. I know I’ve preached this before, but we need to start talking about a tax on services with commitments to repay the money we borrowed from Kenny and other employees. I know their will be serious high-dollar push back along with threats that folks will move their mansions or take their yachts across the country to have them cleaned, but it is ridiculous that we are stiffing Kenny and others to avoid intruding on the dogma of the Tribbies, Commercial Club, and Civic Federation.


  47. - reformer - Friday, Jul 27, 12 @ 1:25 pm:

    The 1995 pension ramp law was given to us by the GOP, who bragged at the time they had fixed the pension problem, even though they actually perpetuated underfunding by another 15 years.

    When will Republicans accept responsibility for their share in creating the mess they prefer to blame on Madigan?


  48. - geronimo - Friday, Jul 27, 12 @ 1:28 pm:

    Dear Crime Fighter,

    Uncle Kenny and the massives of thousands like him who are about to get stiffed do NOT stand a chance. They don’t have the CASH to take out ads to run in the Tribbie, they don’t have the cash to donate( influence) their reps, they don’t have the cash and that is all that matters. So, just like the disabled and poor, in the eyes of our legislators, they simply don’t matter. Makes you feel good about being alive, doesn’t it?


  49. - JenningsB - Friday, Jul 27, 12 @ 1:45 pm:

    “I worked on salary under Ogilvie, Walker, Thompson, Edgar and Ryan. It was obvious to anyone with one eye and one ear how bad it was going to be under Blago. Even my wife, who doesn’t follow polotics, didn’t trust Blago ..”

    Everyone knew it, yet he was elected governor twice without even breaking a sweat. And to Washington several times.

    If the media had treated him like they did in 2007 back in 2002 (when everyone “knew” it) I agree with Ralph, we might have avoided catastrophe….


  50. - Rich Miller - Friday, Jul 27, 12 @ 1:50 pm:

    ===we might have avoided catastrophe…===

    Oh, please. Stop blaming the media. Y’all bought into the TV ads. Blame yourselves.


  51. - RNUG - Friday, Jul 27, 12 @ 1:51 pm:

    Rich @12:41

    “not affordable” is a judgment call … I would say:

    The pension benefits were obviously not affordable because the state hasn’t had the money to pay its full share in decades WHILE SPENDING ON NEW & EXPANDED PROGRAMS.


  52. - titan - Friday, Jul 27, 12 @ 1:55 pm:

    @Rich Miller - That the state legislature chose to spend money on other things and dug us into a debt hole doesn’t mean the pension system was/is unaffordable.

    Groceries or rent may be affordable, but an irresponsible person who blows their money on other things (and borrows to contiue buying those other things long after it is obvious they don’t have the income for thir lifestyle) will still get into a financial fix that may leave them unable to pay rent or groceries


  53. - zatoichi - Friday, Jul 27, 12 @ 2:22 pm:

    I have several good friends working for the state and getting ready to retire soon because of choices they are being forced to make even though they would rather stay at their jobs. Almost all will go from an income in the $60,000’s to retirement income of lower $30,000s based on their 30+ years of working. Some have just now paid their houses off. There are thousands of state employees just like them. The ‘greedheads’ are simply easier to talk/complain/generalize about. The average worker is just too boring because they get the job done without controversy.


  54. - The Mad Hatter - Friday, Jul 27, 12 @ 2:32 pm:

    Speaking of the crook formerly know as Gov. Blago, he borrowed $10 billion in 2003 to shore up the pension system but put only $3 billion into the system. Where did the other $7 billion go?


  55. - Yellow Dog Democrat - Friday, Jul 27, 12 @ 2:39 pm:

    Rich -

    A very human touch to that piece. A couple of points:

    1) One sticking point with unions is that while the tax increase expires relatively soon, they are being asked to forfeit retirement benefits forever. Republicans can and should commit to long term tax reform as part of a pension deal.

    2) Relatedly, any time we mention that state retirees don’t pay income tax on their pensions, we ought to remind folks that NO ONE in Illinois pays taxes on pensions, not even CEOs earning six figure retirements or more.

    That said, I wish your uncle Kenny and all state retirees the best of luck.

    P.S. The Blago advice was sage, my friend.


  56. - Crime Fighter - Friday, Jul 27, 12 @ 2:58 pm:

    @ Geronimo, - Uncle Kenny and the massives of thousands like him who are about to get stiffed do NOT stand a chance. -
    You mean what the Trib has been saying about Uncle Kenny and his “union bosses” controlling everything isn’t true?


  57. - geronimo - Friday, Jul 27, 12 @ 3:02 pm:

    Uncle Kenny’s controlling……….what?


  58. - Six Degrees of Separation - Friday, Jul 27, 12 @ 3:14 pm:

    As I understand it the 1995 “ramp up” law was a back-loaded catch up provision that, while it would theoretically have worked if all the payments were made as scheduled, was politically expedient for all involved (D’s and R’s who voted for it) because it kicked the can down the road rather than provided upfront funding that could’ve made things more manageable IF the upfront funds were managed well. You can pay them now or pay them later. TII. It will always be later.


  59. - Norseman - Friday, Jul 27, 12 @ 3:20 pm:

    I would like to hear from Uncle Kenny as to whether he trusts the folks making the decision on what his sacrifice should be and whether he believes it will be reasonable. It’s unfortunate that his nephew isn’t involved in the decision making process. Maybe he would feel better about the end product if that was the case.


  60. - wizard - Friday, Jul 27, 12 @ 3:52 pm:

    I am not willing to give up one cent of my retirement benefits and insurance until two things happen: 1. Absolutely no state funds are expended on illegal persons and 2. there is an iron clad way to force the state to live up to its commitments instead of kicking the can down the road. When those two things are done, I am willing to negotiate.


  61. - Arthur Andersen - Friday, Jul 27, 12 @ 3:52 pm:

    Very good article today, Rich.
    Kasich Walker-your Buy Illinois bonds idea is a FAIL for two reasons. First and most importantly, the State pension funds have less than half of the $200 billion in assets you assert. Secondly, and thank God, Illinois doesn’t have a fraction of that amount in debt. Nice try though.


  62. - Bemused - Friday, Jul 27, 12 @ 4:20 pm:

    Have said before and will repeat. When this stuff hits the courts I think what has been earned will have to be paid. The fix will have to be made to what is earned down the road. Those working past the change point will bear the the heavy burden.
    This is already the case in the private sector.


  63. - Social Worker - Tuesday, Jul 31, 12 @ 8:18 am:

    I worked for the State of Illinois as a DCFS social worker for 33 years. It was my pleasure to serve the children and families of our state. Working for DCFS is not a career for the faint of heart. No matter what the decision made someone disagrees. I was subjected to public and personal assaults. I cleaned up buckets of roaches, washed sink fulls of dishes and spent countless hours in hot, fly and bug infested homes. Hundreds of hours of counseling, listening and attempting to mend back the lives of abused and neglected children were spent. I earned an MSW and LCSW along the way. ( and yes I paid the the college degree) I EARNED my retirement! I faithfully made a payment to my retirement twice a month for 33 years. State employees perform jobs that many people would not consider. Now we are stamped with a scarlet letter- and made to feel ashamed. My sacrifices to the State of Illinois have already been made.


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