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Try to remain calm

Wednesday, Oct 24, 2012

* The problem with the coverage of what budget office spokesman Abdon Pallasch told the Daily Herald yesterday is that he wasn’t saying that universities would definitely close or taxes would definitely increase if AFSCME’s contract wasn’t resolved in the state’s favor and pensions weren’t reformed to the workers’ detriment. He was just throwing out hypotheticals if that stuff didn’t happen. This shouldn’t be taken too seriously or blown out of proportion.

Trouble is, it’s two weeks before the election. Everybody’s naturally jumpy. Democratic candidates don’t want to needlessly aggravate AFSCME or the teachers, or taxpayers.

Not only that, but thousands of state workers and retirees have succumbed to a weird conspiracy theory that the innocuous constitutional amendment on the ballot next month will somehow take away their pensions. And the Illinois Policy Institute is convinced that there’s a secret plan to raise taxes after the election.

So, right now is, to say the least, not the best environment to broach concepts which lead to stories like this

Gov. Pat Quinn has tried to close prisons, mental hospitals and other state facilities in his quest to cut state spending.

On Tuesday, one of his top budget aides added another institution to the possible target list: Public universities.

The (Arlington Heights) Daily Herald reported Tuesday that assistant budget chief Abdon Pallasch said the state’s labor unions must make some concessions at the bargaining table in order to avoid deeper cuts in state spending.

“The alternative is we, you know, close a few prisons or universities, I guess,” Pallasch told the newspaper’s editorial board. “I’m not threatening to close prisons or universities. I’m just saying, let your imagination run wild with what we’d have to do.”

* And this

Asked if getting pension cuts approved before [the new General Assembly takes office in January] is a do-or-die scenario, Pallasch said “yes.”

“There’s really no plan B. We can’t not reform the pensions,” he said.

“If we do, what do we do? Double or triple the state income tax?” Pallasch said. “There’s all sorts of untenable choices.”

* Or this

Pallasch said the governor does not support raising income taxes further but emphasized the state’s budget situation is dire.

Everybody should just calm down. He wasn’t saying, he was just saying.

But it should be fun to watch the reaction when Gov. Quinn visits the U of I today.


* Meanwhile, thanks but no thanks

A report due Wednesday on Illinois’ fiscal crisis is heavy on definition but light on recommendations for repair, one of its authors said Tuesday.

An offshoot of a national report released in July that was headed by former Federal Reserve Chairman Paul Volcker and former New York Lt. Gov. Richard Ravitch, the Illinois edition of the State Budget Crisis Task Force aims to drive home how big of a hole Illinois has dug itself, according to Richard Dye.

“It spends a lot of time talking about the magnitude of the problem, which is huge — somebody’s ox is going to be gored, or oxen,” said Dye, an economist with the University of Illinois’ Institute of Government and Public Affairs.

“Rather than weighing in on the tough choices and focusing people’s attention on specific cuts that we might recommend, we stayed out of that,” Dye said. “That’s the big thing: Something’s got to be done and sooner rather than later.”

Any idiot with half a brain knows we have big problems in this state. For instance

Because an agreement between state and union officials has expired, 60 union employees of the state had no choice but to report for work Monday to the otherwise empty and unused Illinois Youth Center in Murphysboro — which was the previous place of employment.

The specific agreement between the Department of Juvenile Justice and AFSCME had allowed the workers to be transported for duties at IYC Harrisburg. The agreement expired Sunday, however, and contract talks failed last Thursday. That led to employees returning Monday to IYC Murphysboro — which hasn’t housed a resident since Quinn’s closing decision took effect.

So another study announcing that we have a problem doesn’t really interest me. Ideas from the ivory tower for fixing these problems while doing as little harm as possible to actual people would’ve been nice, but these goofs took the easy way out.

- Posted by Rich Miller        

  1. - circularfiringsquad - Wednesday, Oct 24, 12 @ 6:28 am:

    Not the best environment…..yikes
    How about an award for quickest transformation from a seemingly bright guy to PQ clone blockhead?
    A Sneedly dumber than a box of rocks is too light a prize.

    As Spanky liked to say Abdon is a swell fellow, but can we take away the Metra pass for 13 days?

  2. - truthteller - Wednesday, Oct 24, 12 @ 7:05 am:

    Since the state has just slashed Medicaid spending, provides one of the smallest percentages of aid to local school districts of any of the 50 states, has been routinely cutting its higher ed budget, and has the fewest number of state employees per capita, it will be very hard and painful to make further cuts.
    The report does stress the need for tax reform. Our tax base is too narrow, excluding taxes on services and retirement income, for instance.

    The bold and correct prescription would be major tax reform, but you can bet that neither the political leaders in Springfield nor the Trib editorial board will be promoting that.
    Their idea of courage is too cut services and benefits for the poorest and most vulnerable among us.
    That’s what they have been doing, and it is not working.
    The focus should be on the tax reform we need to generate the revenue to meet the education,health,social service, and public safety needs of our citizens. Let’s not ignore this aspect of the report

  3. - nieva - Wednesday, Oct 24, 12 @ 7:21 am:

    If the worst case happens and the state allows the pension systems to go broke in the next ten years most of us that are retired will be unable to go back to work. Health issues and age will prevent that. So we become a greater burden on the state or federal goverment. I would hope they work this out but if past preformance is any indication we may be moving in with our kids or selling our homes and moving to goverment housing.

  4. - wordslinger - Wednesday, Oct 24, 12 @ 7:43 am:

    “I’m just saying, let your imagination run wild with what we’d have to do.”

    Maybe you shouldn’t let your imagination run wild when yakking with the editorial board at the Daily Herald.

    On most days, those guys couldn’t hit the broad side of a barn with a banjo when it comes to news.

    But, for some reason, when you bring up the idea of closing universities, they might wake up and actually report it.

  5. - RNUG - Wednesday, Oct 24, 12 @ 8:04 am:

    Today’s plan - Setting the stage for tax expansion once the screaming over the proposed cuts gets too loud.

    Tomorrow’s plan - whatever pops into someone’s mind when talking to a reporter …

  6. - Sunshine - Wednesday, Oct 24, 12 @ 8:19 am:

    It simply is not the nature of a politician to offer any solution to a funding problem. They, for the most part, are simply not knowledgeable or experienced in solving budget problems.

    Their knowledge lies in ‘acquiring’ funding for their pet projects and their constituents. They do not see the whole but only their part, and that is off limits to reductions or cuts of any sort.

    Asking these folks to think out of the box and do grand things is simply folly. Only when the house falls on their heads will they have a plan to prop it up, and of course that will be too late.

  7. - Merchandise Man - Wednesday, Oct 24, 12 @ 8:23 am:

    “Everybody should just calm down. He wasn’t saying, he was just saying.”

    All I’m saying is we need to get cracking on a tax increase bill now if we are going to pass it in the lame duck session come January.

    We let that opportunity slide, It’ll be another two years before we can do anything about it again..

  8. - OneMan - Wednesday, Oct 24, 12 @ 8:33 am:

    Wow, interesting time to drop those quotes…

    So was this the first round of fertilizer for the ‘grassroots thing’, get the college kids and their parents freaked out.

  9. - LL Cool J - Wednesday, Oct 24, 12 @ 8:35 am:

    Stakes is High

  10. - downstate hack - Wednesday, Oct 24, 12 @ 8:38 am:

    “Everybody should just calm down. He wasn’t saying, he was just saying.”

    Maybe it is time to panic. A 60% tax hike and still we slip farther and father in debt. The solution may be closing some universities, cuts in education, passing gaming expansion and definitlety some concessions from the unions on pensions. The whole is still very deep and we need to stop digging.

  11. - cassandra - Wednesday, Oct 24, 12 @ 8:45 am:

    Sounds like things still aren’t going great at the bargaining table–at least in the sense of an imminent resolution and completed contract. We taxpayers need to pay attention to these labor negotiations rather than Mr. Pallasch, a new recruit to the corridors of power who seems a bit excited by it all. Lots of money, our money, at stake here.

    Meanwhile, I wonder what’s happening at DCFS, where imminent layoffs were averted recently in exchange for….not sure. Director Calica hopes the legislature will give him the money and hopes that AFSCME will make the contractual concessions necessary so he can proceed with what’s left of his planned reorganization. That’s a lot of hoping.

  12. - Mouthy - Wednesday, Oct 24, 12 @ 8:53 am:

    I’ve read Amendment 49 and see absolutely no danger in it being used to reduce pensions. I also note that it doesn’t replace the pension protection language currently in the State Constitution. As a state retiree I’m not worried about it. There’s enough stuff already to be worried about…..

  13. - illinifan - Wednesday, Oct 24, 12 @ 8:55 am:

    to truthteller….a big AMEN. You are right on point

  14. - AC - Wednesday, Oct 24, 12 @ 8:57 am:

    Something has to give, and this would be true even if AFSCME agreed to a contact at minimum wage and no retirement benefits whatsoever. This idea that either employees are forced to sacrifice or something bad will happen is a false choice. Having put off a tax increase for far too long, we are, collectively, as clueless as we were during the pension holiday years. Revenues must increase and sacrifices must be made by everyone who benefited from artificially low taxes while pension funds were raided and benefits were expanded. If we can ammend the constitution for some useless feel good attempt at pension reform, then we can ammend it to make the tax structure progressive. Alternatively, we can pretend that solution is politically impossible, while the state us forced to make cuts that are either unconscionable or unconstitutional. There are plenty of reasons to be paranoid, the biggest one is fear over what politicians will do while pandering to a irrational public. Everyone wants more services while paying less in taxes, or at the very least they want other people to sacrifice. The problem is big, and the solutions need to be much larger than what can be achieved through contract negotiations.

  15. - Mouthy - Wednesday, Oct 24, 12 @ 8:57 am:

    “Meanwhile, I wonder what’s happening at DCFS, where imminent layoffs were averted recently in exchange for….”

    The governor wants the union to give up seniority rights which the union would be crazy to entertain. I’ve seen what happens when the boss gets to cherry pick who to fire. It ain’t pretty.

  16. - capncrunch - Wednesday, Oct 24, 12 @ 8:59 am:

    “I’ve read Amendment 49 and see absolutely no danger in it being used to reduce pensions.”

    Is a 3% COLA considered an increase in a retiree’s pension benefit?

  17. - Anon - Wednesday, Oct 24, 12 @ 9:03 am:

    My prediction for 2013: The school pension shift will happen, services will be taxed, the pension ramp will be reworked and state employees will pay more into their pensions.

  18. - Loop Lady - Wednesday, Oct 24, 12 @ 9:26 am:

    Merchandise Man is right. Timing is everything in politics…we’ll have newbies in the legislature that will be expendable for at least another year…the unions are not asking for anything not contained in the contract…IL needs to get it’s finances in order ASAP…lead or get out of the way ladies and gents on both side of the aisle…

  19. - Crime Fighter - Wednesday, Oct 24, 12 @ 9:33 am:

    ==”I’m just saying, let your imagination run wild with what we’d have to do.”==
    Leadership - Quinn style.

    truthteller @ 7:05am makes the most sense.

  20. - Joe from Joliet - Wednesday, Oct 24, 12 @ 9:49 am:

    –let your imagination run wild–

    Ok, here’s one. Cut Abdon Pallasch. That saves $110,000 right there. If that job is “vital to the taxpayers”, fill it with someone who can do the job better for less.

  21. - Shore - Wednesday, Oct 24, 12 @ 9:54 am:

    Abdon is realizing that he’s not a journalist speaking for himself anymore he speaks for an administration. I actually like him and thought he was one of the few people at the sun times who weren’t biased in their reporting and always enjoyed his commentary on chicago tonight. He’ll figure it out and I am sure he realizes he screwed one up here. On a personal note, I never take anything seriously lt. governors from new york say, or frankly most things people from new york say.

  22. - Madison - Wednesday, Oct 24, 12 @ 9:56 am:

    Jawboning at bargaining time. The truth is, if they wished to fix it, it would have been fixed by now. But they choose not to.
    They could choose to fix this, but chose not to instead.
    There are no coincidences in electricity or Illinois politics.

  23. - Madison - Wednesday, Oct 24, 12 @ 9:58 am:

    Perhaps a bit redundant. Need to pay more attention to my rambling.

  24. - Ruby - Wednesday, Oct 24, 12 @ 9:58 am:

    The llinois General Assembly is working toward a solution to the high cost of state retiree health care benefits which cost the state between $800 million and $900 million each year. What they should also be working on is reducing the cost of health care benefits for current state workers. Many of these current state and university employees also get free health care benefits. This could result huge savings to Illinois.

  25. - Crime Fighter - Wednesday, Oct 24, 12 @ 10:07 am:

    ==”Many of these current state and university employees also get free health care benefits. This could result huge savings to Illinois”==
    Huh? You mean like the free flu shots given to employees who pay $$ health care insurance premiums?

  26. - Anonymice - Wednesday, Oct 24, 12 @ 10:07 am:

    ==Many of these current state and university employees also get free health care benefits. This could result huge savings to Illinois. ==

    It would also be a pay cut, so don’t assume you can simply cut these benefits without consequence. In the end, you only get the quality of employee you’re willing to pay for.

  27. - Steve Bartin - Wednesday, Oct 24, 12 @ 10:12 am:

    Illinois will have to start thinking about cutting back government. Maybe it’s time to privatize the higher education system? Why should Illinois taxpayers subsidize students who are going to be moving to Texas for jobs? Check out New York Times reporter Gail Collins book.…%3A+How+the+Lone+Star+State+Hijacked+the+American+Agenda

  28. - LilLebowskiUrbanAchiever - Wednesday, Oct 24, 12 @ 10:15 am:

    I like Abdon but those comments are ill timed, ill conceived, and reckless. My guess is you won’t be seeing him in front of any editorial boards again soon.

  29. - Sir Reel - Wednesday, Oct 24, 12 @ 10:24 am:

    Anonymice, the “you get what you pay for” argument may work where pay is merit-based, but not so much where everyone makes the same - the case in IL State government with mostly all union employees. To get the best, pay goes up for all. As a retired SOI manager, all my employees made the same, but there was wide variation in skills.

  30. - JIM - Wednesday, Oct 24, 12 @ 10:39 am:

    ==Is a 3% COLA considered an increase in a retiree’s pension benefit?==

    Not according to the definitions in the amendment. It defines benefit increases as new changes to the pension code that add new benefits or enhance existing benefits beyond where they are today, and new changes that lower or get rid of eligibility requirements to receive a pension.

  31. - James the Intolerant - Wednesday, Oct 24, 12 @ 10:43 am:

    I always liked Abdon Pallasch’s work, and I would imagine the $150,000-range salary is nice (unsure what he was making previously) but to be the spokesman for this administration, or for that matter most administrations, after being an investigative journalist has to be depressing.

  32. - walkinfool - Wednesday, Oct 24, 12 @ 10:44 am:

    The “grassroots cmapaign” is launched!

  33. - walkinfool - Wednesday, Oct 24, 12 @ 10:48 am:

    “campaign” sorry

  34. - Madison - Wednesday, Oct 24, 12 @ 10:56 am:

    Why must we race to the bottom people? If there were good private sector jobs available people would pay more taxes, and the state would have more revenue. Cutting health care benefits is the tail wagging the dog. Because private sector employees are under pressure, we must degrade public sector benefits too? It’s a slippery slope.

  35. - Say again - Wednesday, Oct 24, 12 @ 10:59 am:

    Some University employees get free health insurance benefits? I pay nicely for mine. Can you provide details?

  36. - Truthteller - Wednesday, Oct 24, 12 @ 11:03 am:

    Illinois had a “merit” pay system going back to the Thompson years. Merit pay went to the political favorites. It did not improve the quality of the workforce.
    Folks in the merit comp system couldn’t wait to escape it. They hated the favoritism and voted with their feet. Get real, Sir Reel

  37. - lincolnlover - Wednesday, Oct 24, 12 @ 11:21 am:

    This guy needs some appropriately applied duck-tape, I think. Why would you want him running around making stupid comments like this? And, if he has a journalist background, why is he suddenly a budget specialist? (That’s a serious question - I don’t know anything about him)

  38. - CircularFiringSquad - Wednesday, Oct 24, 12 @ 11:22 am:

    The July report was nutty enough so this must be a dozy.
    Anyone ask the reporters writers to suggest states are waiting for settlements /fines. sentences on the predatory lenders and hedge fund hustlers for the:
    A. Loss of revenue caused by the antics/crimes in ‘07 and beyond
    B. Loss of pension fund assets caused by the antics of the same scum.

    Return the revenues services can be restored wihtout new or higher taxes, bills can be paid, pensions can be managed with less trauama.

    Or we can issue a report and pretend like none of that happened and we just discovered state budget problems..sounds like an IPI “think tank” moment.

  39. - zatoichi - Wednesday, Oct 24, 12 @ 11:26 am:

    Nice report. States finances are a mess, it will be expensive to fix, there is no good source of revenue, cuts are likely. Glad this commission did a great job. Never heard of those items before. So now the finger pointing to what needs to go starts again.

    So what is Pallasch supposed to say? Everything is great? He would get dinged for that. Mentioned someone’s favorite project and he gets dinged for that. Think out loud about the very topics that would be considered in any serious budget cutting discussion and he gets dinged for that. People are nervous at election time and do not want to hear this? That is why it should be discussed.

    Tax reform is coming again. Throw pension back to local districts, property taxes will go up. Add a service sales tax and up goes the barber, physician, clock repairer, and mental health counselor bill. State gotta pay down its borrowing after unloading pension, up goes the state tax to 6%. Need better roads, OK. When do 55 and 57 become tollways? We need to cut the fat? Which specific program goes. Cut Medicaid? Great, how many people are now on it and what insurance/hospital/physician will cover that cost? Those poor or disabled people will go where? State workers get paid too much. OK salary cap all positions at $25 an hour and cut subsidy to insurance/pension by 50% including member of the GA. Increase education class sizes to 40 with similar salary/benefit caps. What do you mean you cannot find good candidates for those jobs? 10% across the board cuts. Didn’t Brady push that and lose an election?

    Several months go there was a long discussion on this blog about the budget pain that was coming. It’s Deja Vu time again and it ain’t going away with wishful thinking. The tough choices are still here.

  40. - Liberty First - Wednesday, Oct 24, 12 @ 11:28 am:

    Who wouldn’t be afraid of a constitution amendment muddying the waters with lawyer speak when you read examples such as this:

    “lifetime” can be a slippery concept in the context of retiree benefits litigation under the Employee Retirement Income Security Act (“ERISA”), 42 U.S.C. §§ 1001 et seq. (2005).  This case asks us to consider, on the heels of Vallone v. CNA Financial Corporation, 375 F.3d 623 (7th Cir.2004), whether designating retiree benefits as “lifetime” really means “for life.”  

  41. - RNUG - Wednesday, Oct 24, 12 @ 11:50 am:

    I agree with truthteller, some kind of tax reform or expansion or increase (maybe all three) is coming. The only question is does it happen before or after they finish sticking it to the state employees / retirees?

  42. - Anyone Remember? - Wednesday, Oct 24, 12 @ 11:51 am:

    downstate hack

    The previous 60% tax increase is irrelevant to this discussion, as even Dan Rutherford has said

    “He says the problem is so bad that the recent 66 percent income tax increase only covers the money needed for pensions and does nothing for the state’s backlog of unpaid bills.”

    So, the entire income tax increase went to fund the ramp-up in pension payments under Jim Edgar’s 1995 law, and nothing else.

  43. - Cook County Commoner - Wednesday, Oct 24, 12 @ 12:10 pm:

    One of the better solutions, at least on the revenue side, is going to a progressive income tax. This will require a constitutional amendment, but the gov employee unions will not allow it for fear of jeopordizing the pension anti-impairment clause in the state constitution during the process.
    Probably, Illinois will go the California Way and let fiscal issues first implode at the local government level and let the federal bankruptcy court resolve them via Ch 9. This may galvanize activity at the state level, but the damage done may be irreparable for decades.
    Sadly, the little-little people will take a terrible hit via Medicaid cuts and other benefit reductions and reduced policing in places like Chicago’s west and south sides.
    In the meantime, the rest of us will pay increased taxes of every type. The increased property taxes, which will decrease the marketability and value of our homes, will be an especially hard hit to seniors. Those of us that can will leave the state.
    Does anyone see this playing out differently? And the illusion of a federal bailout becomes more remote with every few million dollars the federal government bleeds out every minute.

  44. - anon - Wednesday, Oct 24, 12 @ 12:26 pm:

    The state legislature has shown it’s incompency and corruption for years.Why give them further power with 49? Their lack of attending to the pensions payments,allowing people like Cellini and Levine to influence fund investment makes it ill advised to give them this lawyer speak,unclear, additional authority.

  45. - RNUG - Wednesday, Oct 24, 12 @ 12:38 pm:

    Cook County Commoner,

    The one thing I see differently is the home marketability won’t really change. For the people who don’t have the option of leaving the state, it isn’t any different if they are paying higher property taxes on this house or that house. There are disparities in the differetn school districts / tax rates today; there will be tomorrow. People will still make their home purchasing decisions the same as today … once they get past the house itself, they will ask are they getting their money’s worth in terms of good schools, etc?

    The one group it will really impact is seniors. It wouldn’t help the schools, but maybe Illinois should consider the option Georgia allows it’s counties: to let seniors (age 60 usually) out of paying the school district portion of the property tax.

  46. - Bill - Wednesday, Oct 24, 12 @ 12:49 pm:

    ==but the gov employee unions will not allow it==
    That’s not true. Public employee unions have been advocating a progressive income tax for years and still are. Its the fat cats that won’t allow it.

  47. - Steve Bartin - Wednesday, Oct 24, 12 @ 1:05 pm:

    A progressive income tax would be a disaster for Illinois because it would give an incentive to many high income earners to not live here. Just a reminder, we don’t have California weather or New York’s hedge fund industry. It’s not difficult for many wealth people to declare residency in Florida where there’s no state income tax.

  48. - Bill - Wednesday, Oct 24, 12 @ 1:12 pm:

    Sure, I can just see all those rich people leaving the north shore and gold coast mansions and flocking to Fla and Cali to save a few thousand dollars in taxes. Kinda like all those businesses that fled when the corporate rate went up. Not gonna happen. Even Jimmy John still lives here.

  49. - Bill - Wednesday, Oct 24, 12 @ 1:15 pm:

    Besides, those high incomes that they earn are here. They’d still pay no matter where they “declare residency”.

  50. - Fooling Themselves - Wednesday, Oct 24, 12 @ 1:24 pm:

    These legislators who voted against the tax increase will now start trying to convince their constituents that we can just eliminate it and everything will be all right. This is the Dems’ Achilles Heel.

  51. - fed up - Wednesday, Oct 24, 12 @ 1:28 pm:

    Quinn’s budget chief said before the last election that income tax needed to be raised to 5%. Quinn lied to the whole state and said that wasnt true and he would veto any tax increase over 4%. After the election Quinn supported and then signed a tax increase to 5% anyone who believes anything Quinn says is a fool

  52. - Demoralized - Wednesday, Oct 24, 12 @ 1:52 pm:

    @fed up:

    How about a solution instead of whining.

  53. - soccermom - Wednesday, Oct 24, 12 @ 1:58 pm:

    Bill, I don’t recall AFSCME and the teachers’ unions advocating in favor of a constitutional convention.

  54. - Sir Reel - Wednesday, Oct 24, 12 @ 2:21 pm:

    Truthteller, the point I was trying to make was that union pay scales raise the cost of labor but do not guarantee quality employees. I know it was not perfect when it was the rule. But as a manager I had little to work with to reward good employees and punish the bad because the contract governed everything. Too bad that the best the SOI can do is accept politics in the workplace and protect employees with unions.

  55. - reformer - Wednesday, Oct 24, 12 @ 2:23 pm:

    Fed up
    As I recall, Quinn was talking about a permanent hike of 1%. What passed is a temporary hike.

    It was so difficult to pass even the temporary hike, what would it take to enact broader tax reform such as suggested in the report? It goes without saying that every Republican, conservative Democrat and Dem target will be opposed.

  56. - Sir Reel - Wednesday, Oct 24, 12 @ 2:23 pm:

    Sorry merit pay was not perfect.

  57. - Responsa - Wednesday, Oct 24, 12 @ 2:44 pm:

    When I see “fed up” and “Demoralized” sparring it makes me chuckle. (Not at the content of their comments, but because of the two debbie downer handles.)

  58. - Robert the Bruce - Wednesday, Oct 24, 12 @ 3:02 pm:

    Certainly he shouldn’t have gone on record without approval, but on the facts, Abdon is absolutely right. Closing some state universities would be a logical alternative.

  59. - Anonymice - Wednesday, Oct 24, 12 @ 3:05 pm:

    ==Bill, I don’t recall AFSCME and the teachers’ unions advocating in favor of a constitutional convention.==

    You don’t need a convention to amend the Constitution. Just check out your ballot next month for an example. AFSCME did back proposed amendments to the constitution that would allow graduated income taxes.

  60. - STP - Wednesday, Oct 24, 12 @ 3:08 pm:

    Local school districts will need to pickup much more of their costs - what the districts pay is paltry with the rest past on to the individuals through income tax -

  61. - Madison - Wednesday, Oct 24, 12 @ 3:27 pm:

    The unions are not the problem. If you have problems we pay the managers to fix bad state employees. Simply link managers pay to productivity all the way up the line. But it has to be measurable. And you have to pay the managers.
    I am pretty sure that our constitution precludes a graduated income tax guys.

  62. - geronimo - Wednesday, Oct 24, 12 @ 3:37 pm:

    Constitution precludes a graduated income tax?

    That can be ignored or fixed or better yet, “reformed”. Just like the constitutional guarantee of pensions. Some people seem to think that can be fixed. Why not the tax?

  63. - cassandra - Wednesday, Oct 24, 12 @ 3:44 pm:

    So, in an uncharacteristic burst of reform activity, Illinois pols put through the cost shift and a wider sales tax and even convince the electorate to vote for a progressive income tax.
    The cash rolls in.

    But what about the retirees if they give up some of their retiree benefits as part of this fiscal housecleaning. Will they get it back. Somehow, I doubt it. Fiscal responsibility has its limits and our legislators and the guv will have many other ideas about what to do with that new cash.

    Maybe the retirees shouldn’t go first in the rush to solvency.

  64. - RNUG - Wednesday, Oct 24, 12 @ 5:25 pm:

    reformer @ 2:23 pm

    Of the 2% increase (from 3% to 5%), 0.5% (1/2%) was permanent and 1.5% was temporary. When the temporary increase expires, the permanent rate will be 3.5%. So they did pass a small permament increase but very few people realize it.

  65. - RNUG - Wednesday, Oct 24, 12 @ 5:27 pm:


    I have zero intention of going first. Before I did that, I would join the Sangamon County group that is currently suing over the health insurance …

  66. - RNUG - Wednesday, Oct 24, 12 @ 5:31 pm:

    Just like Amendment 49 is a (mor eor less) single issue change to the IL Constitution, there could be a single change to the tax structure from the mandated flat tax to a graduated tax. But that might open the door to either decoupling the business tax from the personal income tax or it could be an opportunity (disaster?) to codify or remove the current business tax breaks.

    The Chicago Civic Committee could get hit with a doble whammy, increased busienss and personal taxes … so don’t look for them to push it.

  67. - reformer - Wednesday, Oct 24, 12 @ 5:35 pm:

    Thanks for the clarification. That means Quinn kept his word to back a permanent hike of no more than 1%.

  68. - Ruby - Wednesday, Oct 24, 12 @ 5:51 pm:

    The cost of health care is a huge expense for Illinois state government. After working 20 years, Illinois state workers and university workers get free health insurance. General assembly and judges get free health insurance even sooner. This cost should be addressed at the same time as the cost of retiree health insurance.

  69. - Billy - Wednesday, Oct 24, 12 @ 6:20 pm:

    Higher taxes equals more people leaving the state. Which means higher taxes. Wake up, the only solution is to cut spending big time!

  70. - wishbone - Wednesday, Oct 24, 12 @ 8:48 pm:

    “It spends a lot of time talking about the magnitude of the problem, which is huge — somebody’s ox is going to be gored, or oxen,” said Dye…”

    This is exactly why targeted spending cuts won’t work and can’t work. Creating winners and more importantly losers makes budget cuts politically impossible, and that is why across the board cuts are the only sensible solution. A 4% across the board cut of all appropriations followed by a ten year spending freeze would generate over $1.2 billion in savings every year. Along with the needed pension reforms those savings would put the state on the road to ultimate solvency. Pension reform alone will not do the job. Either everyone shares in the pain or no one will, and Greece is our future.

  71. - RNUG - Wednesday, Oct 24, 12 @ 9:42 pm:

    Ruby @ 5:51 pm:

    That 20 year statement is a great sound bite but it is not necessarily true. It implies if you work 20 years you get health insurance, period, without any strings attached. Well, there happens to be some rules that must be met.

    Active SERS employees, as part of their working benefits, used to get premium free health insurance while employed but still paid co-pays, deductibles, etc. and for dependents. Quite a while back, the State started phasing in partial premium payments for the workers, with the payment determined by the salary range of the worker (or the union contract).

    Even if you’ve put 20 years in, all that does is lock in the benefit for future use. If you’re still working, you pay whatever portion of the premium is applicable. Once you’ve left State government, unless you are officially retired and collecting a pension, you don’t get the health insurance. You only get the health insurance once you are collecting your pension … which lends weight to the retirees’ court case argument that health insurance is actually deferred compensation to be received upon retirement and hence protected under the pension clause.

    I’ll admit there are some alternate formula positions such as law enforcement and corrections under the 2.2 pension formula who can retire at a fairly early age but they are not the typical State (SERS) retiree. To generalize a bit, the typical retiree is either age 60 with 20 years in or about age 55 with 30 years in (rule of 85, starting after college) or some other combination of 20 plus years of service plus age equaling 85.

    And yes, you are right, the politicans do earn things faster … but they also contribute at a higher rate (I forgot to mention, the 2.2 law enforcement people also contribute at a higher rate) since their career is likely to be shorter.

  72. - RNUG - Wednesday, Oct 24, 12 @ 10:00 pm:

    Billy @ 5:20 pm,

    If you check the records, I believe Quinn is on track to cut around 11% this FY budget year … which is a bit more than the 10% Brady pledged to cut and everyone was in a panic over.

    While I’ll agree some of the money is misspent (what government money isn’t at some point?), the blunt fact is the State has had a revenue problem for at least 15 to 20 years. During the dot com days, enough money was coming in, it could be handled (pensions were actually 80% - 90% funded in those days.) Then you had the dot com bust, the 9/11 recession and the 2007 housing “liar loan” implosion … during that time the problem was papered over every year through budget year shifting, shorting the pensions, and borrowing via bonds.

    The recent “temporary” tax increase with borrowing was only intended to solve any financial problems for the two budget years the solution spanned; it was never intended to be a permanent fix although the politicans sold it that way and buried their disclaimer in paragraph 18 on page 3 … since no one reads past the first few paragraphs. Then the legislature failed to approve the general obligation bonds to pay off the backlog that was suppsoed to be part of the deal. And Blago took the (round numebrs) $10B pension bond float, put $8B in the pension funds, used $2B to (kind of) balance the budget those two years, and added insult to injury by obligating the pensions funds to pay off the bonds intended to shore them up in the first place. (The shortage was indirect by subtractign the bond payments from future pension fund contribtions, something that had never been done before.)

    Bottom line is the State has cooked the books for the past couple of decades instead of raising revenue by either higher taxs, tax reform, or expanding the tax base. Every taxpayer got a free ride for those decades. Now it is time to pay the piper with increased revenue and no one likes the bill …

  73. - Arthur Andersen - Wednesday, Oct 24, 12 @ 10:20 pm:

    Rich, don’t know if that came up, but the grassroots pension campaign has apparently been postponed until after the election, as Gov. Goofy told WCIA “after the ..State election..we will proceed with pension reform in accordance with the great tradition of Lincoln Democracy. ”
    I am not making this up.

  74. - Fed Up - Thursday, Oct 25, 12 @ 12:00 am:

    you are 100% wrong Quinn never said anything about a temporary tax hike. He lied to the voters plain and simple. Also if you believe this tax hike is temporary, then you believe there are 57 states.
    From the Daily Herald 12 Jan 2011
    “On the campaign trail, Gov. Pat Quinn told voters he’d veto any income tax hike that would raise Illinois’ rate over 4 percent.

    But Wednesday Quinn said he’ll sign into law a plan to raise the rate by 2 percentage points, to 5 percent.That’ll raise individual income taxes by 66 percent, compared to the 33 percent he said was his limit. The taxes on businesses also will increase — from 4.8 percent to 7 percent.

    A 1 percentage point increase, Quinn said in July when he was trying to persuade voters to elect him, “is all that I propose and all that I support. … I’m going to veto anything that’s not my plan.”

  75. - Ruby - Thursday, Oct 25, 12 @ 12:14 pm:

    Most current state employees and retirees who have 20 or more years of state government or state university employment receive premium-free health insurance, although they are still responsible for such expenses as co-pays and dependent coverage. Retired Illinois public school teachers and community college teachers pay about 80% of their health insurance premiums.

    The cost of health insurance is one of the biggest elephants in the room when considering state or federal budget problems, just as it is a huge problems for individuals and businesses. It would seem logical then to address the question of how to reduce the cost of health care and health insurance that is costing the citizens of Illinois billions of dollars a year - including $800 to $900 million for state retiree health insurance.

  76. - Chris - Friday, Oct 26, 12 @ 4:19 am:

    “60 union employees of the state had no choice”

    And the union members wonder why they have a bad rep ? Had no choice, my ass! If they’d shown up for work at a facility where they could do some good, they wouldn’t have gotten paid? BS. Or been arrested? BS.

    They absolutely had a choice, but they chose their union’s negotiating position over doing their actual job. Everyone with that attitude should just quit now.

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