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“Consequences”

Monday, Jul 8, 2013

* I told subscribers almost two weeks ago that Gov. Quinn was considering this veto. From the Tribune editorial board

Illinois legislators’ lackadaisical approach to pension reform stands in sharp contrast to Gov. Pat Quinn’s urgency. The legislators’ latest slow-pokery, a conference committee, has met all of once and then mostly to lower expectations. The governor, having given the General Assembly a July 9 deadline to pass reforms, noted that the committee waited eight days to convene in public when its members should have been working “round the clock” to get a bill on his desk.

With that in mind, a curious turn of events has us … curious: If legislators blow his deadline, which at this writing looks likely, will Quinn hold them to a pay-for-performance standard? That is, will he veto their salaries — and block their pay, effective immediately?

Imagine their outrage if he did. Wouldn’t that be sweet.

Imagine their instinct to override his veto before their next scheduled payday.

When Quinn threatens “consequences” if the General Assembly doesn’t approve a pension reform bill tomorrow, I think that’s what he may mean. It could also be something else. Subscribers know more.

* Meanwhile

Gov. Pat Quinn says he won’t testify before a bipartisan pension panel Monday, but will send aides instead.

The committee tasked with finding a solution to the nearly $100 billion problem invited Quinn to their Springfield meeting. But Quinn said Sunday that lawmakers know where he stands. […]

Chairman state Sen. Kwame Raoul sent Quinn a letter Friday, which was obtained by The Associated Press. Raoul says actuarial analysis on proposals, including ideas submitted by Quinn’s office, will take time. […]

His office hasn’t discussed the submitted proposals, saying they’re not new ideas.

Actually, as subscribers know, some of them are new ideas. Demanding action without knowing how much that action will save the state isn’t exactly responsible. But this is campaign season, so here we go

Brooke Anderson, a spokeswoman for Quinn, dismissed Raoul’s statement as an excuse. She said lawmakers have been working on the issue for years and have all the information they need to present a plan. “We’ve been providing estimates, working with the actuaries and having these discussions for two years now. The people of Illinois are tired of these excuses and the lack of urgency,” she said. “The governor’s deadline stands. This is an emergency.” Anderson declined to provide details about what the governor’s plans to do if the committee fails to meet the deadline.

Is she on the campaign payroll yet? Just sayin…

* This is one of the things the conference committee is looking at

The… measure, supported by university presidents, would require workers to pitch in an additional 2 percent of their paychecks toward their pensions, which would be phased in over four years. It would also tie annual cost-of-living increases to one-half the rate of inflation instead of the current compounded 3 percent yearly increase.

As is, the plan would apply only to university and community college workers, but lawmakers want to see what impact the proposal would have if applied to workers in three other retirement systems that cover teachers, state employees and lawmakers. They agreed to ask state pension finance experts to crunch the numbers on potential cost savings for the plan, a process that could take several weeks.

Sen. Kwame Raoul, the Chicago Democrat who chairs the committee, said the plan could act as a new framework for legislators to build on as they seek a deal that is not only financially sound, but politically viable.

“It’s not as easy as flipping a switch and this thing is over and we have a consensus,” Raoul said. “Having a plan that solves the problem is only half of the charge. We have to come up with a plan that passes the General Assembly.”

The conference committee meets again today at 3. We’ll have a live blog. Watch for fireworks.

* And check out what the governor told reporters yesterday…

Oh, yeah. It’s most definitely on.

* Related…

* Hybrid Pension Plans Attracting More States, Cities

* Illinois revenue up 6.7 pct in fiscal 2013: Sales taxes were up a tepid 1.8 percent, or $129 million, in fiscal 2013, while federal funding, including Medicaid reimbursements, jumped by $472 million, according to the commission.

- Posted by Rich Miller        


22 Comments
  1. - wordslinger - Monday, Jul 8, 13 @ 10:53 am:

    Blocking pay would be a childish stunt and a breach of the concept of separation of powers.

    No wonder the Tribbies think it’s cool.


  2. - Norseman - Monday, Jul 8, 13 @ 10:54 am:

    The hearing room should be packed to the rafters.


  3. - low level - Monday, Jul 8, 13 @ 11:02 am:

    So, Madigan should have dropped everything and gone to the meeting, or gotten a cell phone, or whatever nonsensical dribble it was last month… but now, given over a week’s notice, and having had the time to campaign and make a bad appearance at the Hawks rally, our governor isn’t available to appear at the committee hearing.

    If its going to be a Daley-Quinn race, I might be sick.


  4. - Norseman - Monday, Jul 8, 13 @ 11:16 am:

    “Ian Howe: You know the key to running a convincing bluff? Every once in a while you got to be holding all the cards.”

    Anyone think that Quinn is holding any cards?


  5. - Michelle Flaherty - Monday, Jul 8, 13 @ 11:22 am:

    At least the Tribune is consistent in ignoring the constitution.

    Article IV, “The Legislature”:
    SECTION 11. COMPENSATION AND ALLOWANCES
    A member shall receive a salary and allowances as provided by law, but changes in the salary of a member shall not take effect during the term for which he has been elected.
    (Source: Illinois Constitution.)


  6. - Bill White - Monday, Jul 8, 13 @ 11:22 am:

    From one of the links:

    === Chairman state Sen. Kwame Raoul sent Quinn a letter Friday, which was obtained by The Associated Press. Raoul says actuarial analysis on proposals, including ideas submitted by Quinn’s office, will take time.

    Still, Quinn reiterated his deadline, telling reporters Sunday that there’ll be consequences if it isn’t met. His office says analysis should have been done earlier. ===

    Does this mean Pat Quinn wants the pension issue settled WITHOUT actuarial analysis? Even if the analysis should have been done earlier, that isn’t an excuse to make decisions based on guesswork or astro-turfed hyperbolic hysteria.


  7. - siriusly - Monday, Jul 8, 13 @ 11:27 am:

    The Governor is sometimes politically off, but this anti-NRA stuff is home run juicy red meat for him to use in a primary election. I think this is good for him.


  8. - walkinfool - Monday, Jul 8, 13 @ 11:30 am:

    How accurate does the financial impact estimate have to be, as long as it’s substantially more than SB2404, in order to pass something worthwhile? Cannot we get an estimate to within roughly $10 Billion right now, given what we already know? That’s good enough to commit to implementing a solution.

    To say any proposal must be equal or better than SB1 fiscally, is a position that should be softened in this final stage.


  9. - wordslinger - Monday, Jul 8, 13 @ 11:33 am:

    Michelle, the Tribbies operate in a different world.

    In their world, you can tank your employees ESOP, fire scores of veteran employees, spend four years dodging and shorting your creditors in bankruptcy, award your execs big bonuses, then a few months after coming out of bankruptcy borrow nearly $3 billion to buy TV stations.

    Forgive them if they think you can do whatever you want, whenever you want, without consequences.


  10. - Downstater - Monday, Jul 8, 13 @ 11:34 am:

    Why isn’t more consideration being given to hybrid plans? The leadership seems not to be capable of thinking outside the box. If a test was given concerning basis economics and finance, a vast majority of the legislators would fail miserably.


  11. - DoubleD - Monday, Jul 8, 13 @ 11:49 am:

    Does anyone else find it ludicrous that a 30 to 40 year problem must be solved immediately?…Geez I wonder why government can be so effective given its responsibility to the political over the best course and most logical course of action.


  12. - Secret Square - Monday, Jul 8, 13 @ 12:03 pm:

    “If its going to be a Daley-Quinn race, I might be sick.”

    If it’s going to be a Daley-Quinn race with the winner facing Bruce Rauner, I might pack up and move :-)


  13. - Secret Square - Monday, Jul 8, 13 @ 12:11 pm:

    “will he veto their salaries — and block their pay, effective immediately? Imagine their outrage if he did. Wouldn’t that be sweet.”

    If the veto also includes cutting off the salaries of legislative branch employees, e.g., district and Springfield office staff and employees of various legislative agencies, I don’t think it would be very “sweet” at all (since I’m one of them). Many of these people work long/irregular hours, particularly during session, for considerably less than executive branch employees make; are not unionized; and had no say in the power dispute at hand.


  14. - PublicServant - Monday, Jul 8, 13 @ 12:19 pm:

    It must be “solved” immediately because the emergency looks like less and less of an emergency every day that passes. In the end, raising the revenue to pay your bills, and avoid “borrowing” even more in the future, is what is needed. Soon the courts will confirm that, and it doesn’t take a constitutional scholar to read and understand the plain language of the pension clause of the Illinois Constitution, or the Contracts clause of the US Constitution.


  15. - DoubleD - Monday, Jul 8, 13 @ 12:28 pm:

    Agreed Public…and I certainly hope the Martire plan gets some serious traction. We do not have to be at 100 percent funded to make this work.


  16. - Raymond - Monday, Jul 8, 13 @ 12:35 pm:

    === In their world, you can tank your employees ESOP, fire scores of veteran employees, spend four years dodging and shorting your creditors in bankruptcy, award your execs big bonuses, then a few months after coming out of bankruptcy borrow nearly $3 billion to buy TV stations. ===

    Then there’s the $225 million in back taxes:

    http://www.nytimes.com/2013/06/21/business/tribunes-clever-tax-strategy-now-spells-trouble.html?pagewanted=all&_r=1&


  17. - anon - Monday, Jul 8, 13 @ 12:46 pm:

    You don’t have to be a university president to figure out that their plan for employees to pay more and get less won’t pass the constitution regardless of what the actuaries say.


  18. - Anonymous - Monday, Jul 8, 13 @ 12:53 pm:

    It wouldn’t shock me if it ends up being the rank-and-file state employees rather than the GA who will feel the brunt of the Governor’s “consequences” if they don’t send him pension reform by midnight tomorrow (e.g., reduction/item vetoes to state agency budgets,etc.).


  19. - Anon - Monday, Jul 8, 13 @ 1:46 pm:

    I find it interesting that the University Presidents are pushing this plan. Perhaps it is time to look at their retirement plans. Many of them receive yearly retirement annuities. For example Poshard from SIU receives an annual annuity of $55K and Thomas from WIU receives a annual $25k annuity Other Presidenta such as Peters and Maimon receive “retirement enhancements” of 84K and $31K respectively. This data is available thru the IBHE (http://www.ibhe.org/pa96266/search.aspx). FY 13 data is not yet available.

    So, the University Presidents are protected but their employees??????


  20. - DanL60 - Monday, Jul 8, 13 @ 2:29 pm:

    Regardless of what gets passed, isn’t it going to be challenged in the courts?


  21. - RNUG - Monday, Jul 8, 13 @ 2:56 pm:

    DanL60 @ 2:29 pm:

    If it is diminishment to current retirees and employees, yes, it will be challenged.

    If it is raising revenue (taxes) to actually pay what is already owed and can’t legally be avoided, it will only be the taxpayers screaming … and they have no legal status to sue. There only recourse is the ballot box.


  22. - Sir Reel - Monday, Jul 8, 13 @ 3:24 pm:

    When the dust settles and this crew comes up with something, I will have to stop telling people I am retired with a defined benefit pension because at that point “defined” will be meaningless.


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