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Fahner’s irrelevance and TRS backs off

Monday, Nov 19, 2012

* My weekly syndicated newspaper column

For the past few years, the Civic Committee of the Commercial Club of Chicago has been one of the most feared participants in the state’s pension reform debate.

Ty Fahner, a former Illinois attorney general who heads the Civic Committee, managed to convince both political parties of the need to compete for a position of favor with him and his influential group.

When Fahner and the committee ended up siding with the House Democrats in May and endorsing their pension reform plan, including the controversial cost shift from the state to school districts, the House Republicans were furious.

They had been assiduously courting Fahner and figured that because the Civic Committee consists of top Chicago business leaders, they’d be the natural ally of choice.

Not to mention that Fahner also formed a political action committee (“We Mean Business”) to back up his word. Everybody wanted that money, so the PAC gave his position additional strength.

But those days appear to be behind us, at least for now. Fahner’s histrionics last week over what he claimed was an “unfixable” pension problem have all but cut him out of the statehouse mix.

“He’s made himself irrelevant,” said one top Democratic official who’s intimately involved with pension reform.

In a memo to Civic Committee members, Fahner wrote that “the pension crisis has grown so severe that it is now unfixable. There simply won’t be enough money” to pay pensions for young teachers just starting out.

But then Fahner constructed a bizarre dichotomy by both claiming the problem to be completely unfixable while simultaneously demanding specific changes to the state’s pension systems. He said four things had to be done “just to slow the bleeding and reduce the size of the financial burden Illinois taxpayers must bear.”

Those four items included eliminating annual cost-of-living raises for pensioners, instituting a pension salary cap, increasing the retirement age to 67 and shifting the teachers’ pension costs to school districts and universities.

Because he said there was no real fix, there’s little to no use in negotiating with Fahner now because any solution the General Assembly comes up with will be dismissed by him as wholly inadequate.

Legislative thinking goes like this: Why bend over backward to accommodate someone who will never admit that you did the right thing? There’s absolutely no political or legislative advantage to dealing with the guy.

Making matters worse, Fahner refused to disclose the actuarial data upon which he based his dire projection. That has led to more than one suggestion behind the scenes that Fahner may have cooked the books to arrive at his striking conclusion.

The Teachers’ Retirement System released a statement last week, saying that Fahner’s conclusions were wrong based on its actuarial data. That statement just fueled the flames of suspicion.

So it’s little wonder that neither of the Republican legislative leaders have jumped to Fahner’s defense. House Minority Leader Tom Cross’ office was silent, and Senate Minority Leader Christine Radogno continued to call for a balanced, comprehensive pension solution.

Fahner wasn’t with them before and can’t be placated now, so he’s off the invite list.

The Senate Democrats were even harsher, issuing a statement from their attorney that ripped Fahner’s arguments into tiny shreds.

Fahner had earlier backed a “comprehensive reform” plan introduced by Republicans that would cut the state’s unfunded pension liabilities by $3 billion to $5 billion. It was so severe that just about everybody considered it unconstitutional.

The Senate Democrats’ attorney, Eric Madiar, noted in his response to Fahner that the Democratic proposal now on the table cuts the same amount from the unfunded liabilities — a plan that Fahner now calls “insufficient” and “token.”

Only the Chicago Tribune’s editorial board, whose often ill-informed catcalls about pension reform make Fahner look downright moderate, attempted to come to his defense. The editorial page claimed that Fahner didn’t really mean that the problem was “mathematically” unfixable, but that it was unfixable because of a lack of political will.

That’s a misreading. Fahner clearly stated in his memo to the Civic Committee membership that even the reform measure he demanded would merely “slow the bleeding” and “minimize the long-term damage” to the system.

Either way, few at the statehouse will listen much to the Tribune editorial board in light of the election outcomes. The paper’s endorsed candidates and positions were almost thumped harder than the GOP.

* And Greg Hinz noted a major attitude change by the Teachers Retirement System

TRS in its piece toughened its bargaining position. While the head of the agency a few weeks ago had seemed to suggest that some reductions in benefits are inevitable, the article by TRS chief Dick Ingram emphasizes that all changes must follow a clause in the state Constitution that TRS believes bans any reduction in benefits once a teacher is hired and, beyond that, says lesser benefits that lawmakers enacted a couple of years ago create “inequity” and “penalize” the newbies.

It appears that the IFT’s demand that Ingram resign had its intended impact.


* Some editorials…

* SJ-R Editorial: The Civic Committee’s pension meltdown: Unfortunately, Fahner provided no proof or actuarial study to back up his statements. Regardless, those suggestions are both unconstitutional and politically dead on arrival.

* Sun-Times Editorial: Excellent time for a state pension storm: But we part company, vociferously so, on Fahner’s proposal to eliminate COLAs altogether. This would mean a $30,000 pension for a retired 70-year-old today — a retiree who gets no social security — would never change. Instead, we favor scaling back the compounding and overly generous COLA that retirees currently receive. We also support the strongest language possible to force the state to make its annual pension payments.

- Posted by Rich Miller        

  1. - MS - Monday, Nov 19, 12 @ 6:54 am:

    Fahner is too emotional and non-strategic. He’s also impulsive. If not, he would have been re-elected Attorney General decades ago. If not, he wouldn’t have bamboozled Republicans into paying for his law firm to represent them in a doomed from the start redistricting lawsuit for the congressional map. If not, he woulnd’t alienate everyone by his erratic behavior regarding pension reform and the state budget in general–teaming up with strange bedfellows then demonizing them one by one. If not, he would wait to speak until he had his facts straight. He’s become a well-intentioned but ineffective hothead, now openly ridiculed.
    He needs to listen to Lindsay Graham’s advice to Romney–”stop digging.”

  2. - Anon - Monday, Nov 19, 12 @ 8:01 am:

    I know it’s politics in Illinois, but Fahner should have never been sitting at the table in the first place. No one elected him, or his cronies. All they have done is use their status as a platform to inhibit any thoughtful discussion that wasn’t in line with their position. Good riddance.

  3. - Oswego Willy - Monday, Nov 19, 12 @ 8:22 am:

    ===But then Fahner constructed a bizarre dichotomy by both claiming the problem to be completely unfixable while simultaneously demanding specific changes to the state’s pension systems.===

    THAT is from the ILGOP playbook! “We can’t do it, but we think these changes will work… but it can’t be done…”

    I remember a story of a retired politician. This politician had retired from being very prominent in Cook County and Illinois politics, and some twenty-something “kid” walked past this retired big fish, completely ignoring the stalwart.

    The retired leader was then heard saying, “Don’t retire. No matter how big you thought you were, or how big they tell you you are… or were… once you are gone, you’re gone.”

    The retired politician then went to the bar, waited in line, ignored by most, a nod by some, and got the drink and walked away.

    Mr. Fahner, you are now … by the dopiness you are trying to sell, after turning a post-elected life into something very relevent in the discussion … you are turning into that politican with these kind of wreckless statements. You just don’t know it yet.

  4. - just sayin' - Monday, Nov 19, 12 @ 8:24 am:

    Ty Fahner changing name of “We Mean Business PAC” to “Taking Our Marbles and Going Home PAC.”

  5. - S.Dolopoulos - Monday, Nov 19, 12 @ 8:25 am:

    For someone so “irrelevant”, the pols. and media sure spend a lot of time discussing him and the Civic Comm.

    Just yesterday he was on WBBM for well over an hour., not to mention additional smaller segments on other stations.

    He’s been around for a while and isn’t about to disappear into the ether.

  6. - S.Dolopoulos - Monday, Nov 19, 12 @ 8:28 am:

    That said, the breakdown of his confounding choices is spot on.

    But it seems a bit much to deem him “irrelevant” on this discussion. He can still comand a microphone and media attention, which itself is worth something.

  7. - Oswego Willy - Monday, Nov 19, 12 @ 8:30 am:

    ===He can still comand a microphone and media attention, which itself is worth something.===

    Let’s be careful, the cast of Jersey Shore and Lindsay Lohan can command a microphone, so that is where Fahner is? He can commmand a microphone?

    Just be carful with that …

  8. - S.Dolopoulos - Monday, Nov 19, 12 @ 8:36 am:

    @OW: Unfortunately, it’s scary to think how many people out there (not you) take the Jersey Shore cast seriously. Like lemmings off a cliff.

  9. - OneMan - Monday, Nov 19, 12 @ 8:43 am:

    So is the Daily Show on hiatus this week? I am guessing they are, so how many days will it take for them to get to Squeezy

  10. - OneMan - Monday, Nov 19, 12 @ 8:44 am:

    ops, wrong post.

  11. - geronimo - Monday, Nov 19, 12 @ 9:20 am:

    Fahner is a hysterical loon who is on someone’s payroll to get his agenda implemented. Cooking the books? What a shock!

  12. - Quinn T. Sential - Monday, Nov 19, 12 @ 9:27 am:

    Maybe Madeline Doubek can fill the vacuum:

  13. - western illinois - Monday, Nov 19, 12 @ 9:38 am:

    Rich or anyone: Did this We Mean Biz PAC actually have any money?

  14. - geronimo - Monday, Nov 19, 12 @ 9:41 am:

    Maybe Fahner isn’t so irrelevant at all. He served under Gov Thompson and pension funds were diverted … somewhere funding was at 30% during that time. Ty also said that if this were to happen in the private sector someone would face prosecution. Hmmmmm…..for someone who was complicit in the diversion of funds, it seems odd that he’d be shouting from the rooftop about this atrocity and talking about how terrible it would be in the private sector.

  15. - Rich Miller - Monday, Nov 19, 12 @ 9:45 am:

    geronimo, what the state did was not illegal. And how many Fortune 500 CEOs have been sent to prison for shorting pension funds? Any?

  16. - Dave Urbanek @ TRS - Monday, Nov 19, 12 @ 9:49 am:

    Mr. Hinz lacks a sufficient understanding of the background of the TRS position on pension reform and did not request that information when he called TRS last week. The bottom line is Teachers’ Retirement System has not changed its position on the foundation of pension reform with regard to the pension protection clause of the Illinois Constitution and the need to fix the inequities of Tier II. The TRS Board of Trustees finalized a resolution in April of this year that called on any overhaul of the state’s pension code to adhere to the pension protection clause. The same resolution also called for revisions in Tier II so that those TRS members do not have to pay for their entire benefit and subsidize the benefits of Tier I members.

  17. - Pot calling kettle - Monday, Nov 19, 12 @ 9:57 am:

    The real problem for lawmakers is that the tax payers will, eventually, end up paying. If the cost is shifted, it will be increased property tax and tuition. If the benefits are cut too much, the Feds will insist on Social Security payments and property tax & tuition will go up (as well as calls for the state to pony up). The people will pay, its only a question of when and who they will blame.

  18. - geronimo - Monday, Nov 19, 12 @ 10:15 am:

    RE: my post at 9:41,my point was since he was part of the underfunding, why is he crying about the shortage now?

  19. - Capitol View - Monday, Nov 19, 12 @ 10:44 am:

    fund pension needs “in the strongest possible language”???

    What is stronger than the mandate of the state constitution?

    I’m not saying that legislators who short their appropriated pension payments should be impeached,but it was/is constitutional misconduct as far as I am concerned.

  20. - Cook County Commoner - Monday, Nov 19, 12 @ 12:29 pm:

    There will be no meaningful pension reform in the near future. (Cost shifting of suburban teachers’ pensions is not reform; it merely passes the tab to homeowners). Look at the players. The government employee unions hold most of the cards via the reliance of career politicians on their contributions. And this group of needy politicians appears to have increased its numbers in the last election. They’d be crazy to allow a lame duck session to pass meaningful reform, leaving them to face angry unions after the crippled ducks quack off. Rep. Lou Lang, in a form written response to my query on pension reform stated he will consider everything that is not violative of the state constitution. And that’s the rub. All meaningful reform would violate the constitution’s pension anti-impairment clause. And the gov employee unions won’t agree to painful changes changes. Why should they? They are like the Hostess Bakers Union, except they own management.

  21. - Huh? - Monday, Nov 19, 12 @ 1:09 pm:

    There is a very easy wayo to reform the pensions - have a constitutional amendment that forces the GA to fund the States share of the pensions.

    There have been too many pension holidays. That is how we got into this mess. Too many rosy financial projections of earning lead previous GA to think that the investments would pay the rightfully owed pensions.

    Now that the investment projections have not kept pace with the amount owed, it is time for the GA to do the right thing and make good on its promises. Even if it means raising taxes.

  22. - Arthur Andersen - Monday, Nov 19, 12 @ 1:30 pm:

    Mr. Urbanek, we posters here don’t have knowledge sufficient to believe your assertion about Mr. Hinz.
    On the other hand, we, and Mr. Hinz, do have your Supreme Leader on video stating a position from which he has now retreated.
    Save us the rhetoric; save our pensions instead.

  23. - Maxine on Politics - Monday, Nov 19, 12 @ 5:44 pm:

    Arthur, I am shocked at your comment of “fool” regarding David Urbanek. I thought name calling was beneath you, guess not. Shame on you! Grow up!

  24. - Arthur Andersen - Monday, Nov 19, 12 @ 8:23 pm:

    Maxine, I don’t think I’ve ever made your acquaintance, or read your posts here on Capitol Fax.
    My most sincere regrets to you and anyone else whom
    I may have offended my my thoughtless and unkind choice of words.
    Having said that, may I note that you apparently do not disagree with my original post and would only clarify it to say that “an agency PIO who debates an influential columnist when the facts of the matter at hand are not clearly in his favor is engaging in risky and foolish behavior. “

  25. - Maxine on Politics - Tuesday, Nov 20, 12 @ 5:22 pm:

    Thank you Arthur for responding. Your post seemed a little more abrupt than usual is all. Your second post more politely clarified your opinion, however, as you well know any PIO has to take directive from others. Dave is definately no fool and we are all trying to do our jobs to the best of our abilities, within the scope allowed. Being in state government, especially Illinois, is very different when you are on the outside looking in, rather than inside looking out. You have made my acquanintance once many years ago and on occassion I do post here, but mostly just “listen”. Thank you for the apology, it is appreciated.

Sorry, comments for this post are now closed.

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