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A complete farce

Tuesday, Jul 9, 2013

* Gov. Pat Quinn again threatened unspecified “consequences” if the General Assembly doesn’t approve pension reform today

“It’s time for them to do their job. If they don’t do their job by tomorrow, there will be consequences,” said Gov. Pat Quinn. […]

“They’ve refused to act. We’re not going to take it any longer,” said Gov. Quinn.

We’ve already discussed what one of those consequences might be.

* Meanwhile, yesterday’s testimony by Quinn budget director Jerry Stermer was a complete farce

During the hearing, members of both parties were stymied by Quinn’s budget chief, Jerry Stermer, who would only offer vague answers when asked about what new plan the governor was prepared to offer up. Stermer also wouldn’t say why the governor rebuffed the committee’s invitation to personally testify at Monday’s meeting.

“Part of the difficulty in our discussion today is you’re answering in a lot of generalities. If the governor were here, it would be difficult for him to just answer in generalities,” state Sen. Kwame Raoul (D-Chicago), the committee’s chairman, told Stermer.

“So I’m just curious, where is the governor? What’s more important for him today? He was invited to be here,” Raoul said.

Stermer responded that in the letter Raoul sent the administration seeking testimony before the committee, he invited either “the governor or his designee” to appear.

“My letter was to him, so I assume he declined,” Raoul pressed.

“He sent his designee, as requested,” Stermer shot back.

More

Stermer would not get specific about what sort of plan the governor would like the see come out of the committee process. “The governor’s proposal has been and continues to be: We need a comprehensive solution that stabilizes these systems and enables the systems to actually pay the pensions of the people who have earned them, will erase the unfunded ability, get to 100 percent funding and end the squeeze on the major obligations of state government,” he said. He parroted these components as a response to questions from the committee so many times that his repetition eventually drew laughter from the public audience.

Sheesh.

* An extremely important point

Publicly, Quinn said he wants lawmakers to act on pension reform by July 9. He’s warned of consequences if the deadline isn’t met, but hasn’t specified what those consequences are.

Raoul, though, said Quinn’s office asked pension actuaries to analyze savings on some reform ideas and was told the numbers wouldn’t be available until July 12 at the earliest, three days after the deadline he set for lawmakers to act.

The governor’s people have been negotiating behind the scenes and have come up with their own reform outline (subscribe for more info). which they submitted for actuarial review late last month. And even though the analysis of their own plan won’t be finished until July 12th, Quinn is still sticking to his “consequences” line.

It’s a total spin job, but most of the media hasn’t yet challenged Quinn on it.

More

Raoul said the group is getting two different messages from Quinn: the sound bites for the media and their own interactions with Stermer. Quinn’s office made some suggestions that actuaries are also working on. The estimates on Quinn’s proposals will not be complete until July 12.

“The reason that I invited the governor was because there was a bit of an inconsistency as to what was being said from his office publicly and the work that Mr. Stermer, the representative of his office, was doing privately. So you want to know which is which. Am I wasting my time with Mr. Stermer and having these discussions? Should I be listening to … Brooke Anderson? Who’s telling the truth here? The only person who could resolve that — you know, the buck stops at the governor.”

* Related…

* Quinn budget chief scolds pension panel, gets payment in kind

* Pension committee hears higher ed testimony

* Lawmakers continue hunt for pension crisis fix

- Posted by Rich Miller        


41 Comments
  1. - VonKlutzenplatz - Tuesday, Jul 9, 13 @ 10:21 am:

    Pretty classless of the Gov. to send somebody else to take the heat.

    This is not just poor leadership of the state. It is poor personal conduct.

    Very disappointing.


  2. - RonOglesby - Tuesday, Jul 9, 13 @ 10:21 am:

    He could have gotten Concealed carry off their plate to deal with the pension mess. But he doesnt think like that I guess.


  3. - Roadiepig - Tuesday, Jul 9, 13 @ 10:21 am:

    You would think with Quinn “working night and day” on pension “reform” he could make the shirt trip to the room his asked-for committee was meeting and show what all if that work has produced. What a waste of time


  4. - wordslinger - Tuesday, Jul 9, 13 @ 10:32 am:

    It’s a farce both ways. GA members are not pining for leadership from Pat Quinn. He’ll sign whatever they send him.

    They’re mad that he’s using them to play to the Tribbies hysterics.


  5. - Old and In The Way - Tuesday, Jul 9, 13 @ 10:37 am:

    Wordslnger
    I just read that the Trib owes over $250,000 in back taxes! Is this state or Federal? Anyone have more details on this?


  6. - Small Town Liberal - Tuesday, Jul 9, 13 @ 10:40 am:

    - GA members are not pining for leadership from Pat Quinn. -

    No kidding, I’m sick of the notion that the Governor exists to provide cover for the GA. That’s the kind of leadership that got us into the pension mess in the first place.

    As to the politics, that’s the name of the game, I don’t read this website for deep policy analysis.


  7. - PublicServant - Tuesday, Jul 9, 13 @ 10:47 am:

    Old, if its state taxes, I’m sure the Trib will just request a tax break. But, if they do, I’d be more than willing to let them move to another state as long as they move completely of of the state of willful ignorance that they’ve inhabited for so long.


  8. - PublicServant - Tuesday, Jul 9, 13 @ 10:49 am:

    STL, the problem is that you can’t read Quinn for deep policy analysis either…


  9. - walkinfool - Tuesday, Jul 9, 13 @ 10:59 am:

    ==As to politics, that’s the name of the game, I don’t read this website for deep policy analysis.==

    That’s true for public committee hearings as well.


  10. - Dark Side of the Moon - Tuesday, Jul 9, 13 @ 11:03 am:

    I think Quinn will pull a Blagojevich. Already hearing chatter that his minions are looking for people to run against incumbents. Seriously disappointed in this Governor. Should be an interesting campaign season, needless to say.


  11. - Algonquin J. Calhoun - Tuesday, Jul 9, 13 @ 11:03 am:

    Old and in the Way -

    That’s $225 MILLION the Tribbies supposedly owe.

    Raymond pointed this out and had the NY Times link yesterday:

    - 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&


  12. - JC - Tuesday, Jul 9, 13 @ 11:12 am:

    For the Tribune, the best defense is an aggressive offense. Shining the blame game on pensions for our state woes serves to deflect any attention on them. Same with the Civvies. While they drown in their mass of cash, they want to make positively sure that no one looks to them to be any part of any solution that might help someone else.


  13. - Anon - Tuesday, Jul 9, 13 @ 11:47 am:

    So it appears that the University Presidents and the Trib have something incoming: hypocrisy. The Trib complains about the state owing money and the University President’s support cutting their employees’ retirement security while their own retirement annuities and/or “retirement enhancements” are outside of these cuts.


  14. - Old and In The Way - Tuesday, Jul 9, 13 @ 11:58 am:

    Algonquin
    Sorry, I missed some zeroes! Thanks for the link. These guys are as bad as the oil companies!

    Hey, Tribune……reduce the payment backlog…..pay your taxes!


  15. - Cook County Commoner - Tuesday, Jul 9, 13 @ 11:59 am:

    Are these “actuarial reviews” done with a squeaky abacus? Seems to me that the variables regarding income, time, participation, etc. should already be plugged in. We do use computers, right? Oh, I forgot. The “actuarial reviews” I participated in required little work by the machines and number crunchers, but a lot of work for messengers as results moved about and were “massaged” and vetted by stakeholders.


  16. - Old and In The Way - Tuesday, Jul 9, 13 @ 12:01 pm:

    I really like the university presidents selling their faculty and staff down the pension diminishment river while never mentioning their pension enhancements! True collegial leadership! (snark intended) Faculty need to know this and call them out!


  17. - Lil Squeezy - Tuesday, Jul 9, 13 @ 12:14 pm:

    I felt bad for Jerry yesterday. It was an embarrassing hearing.


  18. - 47th Ward - Tuesday, Jul 9, 13 @ 12:30 pm:

    ===the university presidents selling their faculty and staff down the pension diminishment river===

    Is that what’s actually been proposed? I haven’t been following this too closely, but I was under the impression that the Presidents’ compromise was that universities would gradually take over funding the employer share of the University Employees System. In exchange, they’ll get relief from the ridiculous state procurement laws that make it impossible to do anything efficiently.

    When did the Presidents say they were going to diminish the pensions of their employees?


  19. - Keyser Soze - Tuesday, Jul 9, 13 @ 12:32 pm:

    Our last functioning Governor was George Ryan. He’s been gone for more than a decade. Why on earth does Pat Quinn seek to be Governor for a second term when he has yet to govern in his first?


  20. - Anon - Tuesday, Jul 9, 13 @ 12:42 pm:

    47th Ward, the University Presidents are supporting SB 2591 which is a unilateral cut to pensions (though it does provide some improvement for those in tier 2). As for the cost shift proposals, yes it might solve some very minor procurement issues (which could be its own bill) but it represents a direct cut to public higher education. There are some estimates that it will result in a significant increase in tuition rates for all students (almost 16% increase). However the University presidents always fail to point out that they have their own unique retirement perks on top of their pensions.


  21. - Anonymous - Tuesday, Jul 9, 13 @ 12:51 pm:

    When did the Presidents say they were going to diminish the pensions of their employees?

    The proposal that the Univ. Presidents endorse links the cost of living adjustment to the CPI, which means low inflation rate, lower COLA, still diminishment.


  22. - Anon. - Tuesday, Jul 9, 13 @ 12:56 pm:

    ==Why on earth does Pat Quinn seek to be Governor for a second term when he has yet to govern in his first?==

    For the enhanced retirement benefits, of course.


  23. - Union Man - Tuesday, Jul 9, 13 @ 12:56 pm:

    If Quinn wants to be governor he needs to act like one and get his butt in front of the pension committee and tell them what he will sign! Not send your aide to speak in general terms who keeps repeating them over and over. Where was the governor yesterday anyway??


  24. - Arthur Andersen - Tuesday, Jul 9, 13 @ 1:07 pm:

    The Presidents’ proposal for SURS also raises employee contributions without any corresponding benefit increase. Reasonable people could debate about that being a diminishment of benefits, but it’s fairly clear that such an action violates Federal Tax Law. That is the last place Illinois wants to be with all of its other pension woes.


  25. - Concerned Retiree - Tuesday, Jul 9, 13 @ 1:37 pm:

    In fact, SB 2591 which is supported by the university presidents would provide for a COLA of 1/2 of CPI-U. Obviously, a reduction in benefits. And one with 2% increased cost.


  26. - skeptical - Tuesday, Jul 9, 13 @ 2:14 pm:

    My guess is that some of the university presidents didn’t read and/or understand SB2591. Somebody just told them to “sign here.”


  27. - Old and In The Way - Tuesday, Jul 9, 13 @ 3:29 pm:

    Skeptical

    At least three or four did, they drafted the proposal! Poshard and Easter were key players along with Peters. Not sure who Thomas even is…….the rest were probably along for the ride.


  28. - Anon - Tuesday, Jul 9, 13 @ 4:07 pm:

    Don’t forget about Maimon (Pres at GSU). She was involved in this as well and testified during the first special session back in June.


  29. - PublicServant - Tuesday, Jul 9, 13 @ 4:40 pm:

    The University presidents are trying to stop the massive brain drain under way at the universities, and that’s their main concern with regards to the profs. Everyone else is a level below that, since without top professors those vaunted rankings and prestige go down the tubes.


  30. - RNUG Fan - Tuesday, Jul 9, 13 @ 5:55 pm:

    Public Servant the brains have drained from the U Presidents. UPI part of IFT is opposed to the cost shift and supports 2404 not this thing. It will only add to the brain drain
    For this proposal they would have to run a bunch of inflation scenarios and who knows which is the right one. There is no way to evaluate this plan.
    It was just another piece of junk from UIUC. UIUC pres is a member of of the civic club with U of C and NU I guess he is helping them tank UIUC so they have no public competition


  31. - Norseman - Tuesday, Jul 9, 13 @ 6:37 pm:

    Public, do you see the Presidents’ proposal as stopping the drain? I’m not an expert on unis but I would think the profs would still hate the change and want to leave. I would think that it would also make prof recruitment harder.


  32. - RNUG Fan - Tuesday, Jul 9, 13 @ 6:42 pm:

    You are right norse


  33. - RNUG Fan - Tuesday, Jul 9, 13 @ 6:51 pm:

    I am going to put a couple of treads together here for the pension forum.
    Someone called Denim Chicken did a nice summary of the strange politics of this issue under the Daley thread. He was spot on about being mystified why Demo candidates think this is a good issue for them. I will add under Richs question about a downstate gov the commentators cant seem to understand that a downstate candidate could pop up…..With 40% undecided with 3 well known Chicago names I think this race is crying out for someone new


  34. - wordslinger - Tuesday, Jul 9, 13 @ 7:31 pm:

    –He was spot on about being mystified why Demo candidates think this is a good issue for them.–

    Politicians of all sorts have been shorting the scheduled pension fund payments for decades and relying on economic and investment growth to make up the difference.

    When things went south in 2008, did you think they were going to take the blame? It’s those bad lunch ladies, janitors and coppers living large in the south of France on their pensions.

    In my experience, the pension “crisis” seems to be willingly accepted among many private workers anxious and embittered about the royal rodgering most regular schmucks have taken in their own work and financial situations since the House of Cards fell with Lehmann.

    Misery loves company. If you can’t beat a rigged game, you feel better if all the players lose.

    The hysteria is fueled by willfully ignorant lapdog mouthpieces like the Tribbie editorial board who get-a-scared by Big Number stories like “$100 billion unfunded liability” as if that’s supposed to mean something over a 30-year payout.

    The Tribbies are bitter, too, because Zell wiped out their ESOP when he took the company private.

    But they’re propped up by the “expert” and oh-so-respectable rating agency and Wall Street types who will tell you with a straight face that its “conservative” to gouge taxpayers now to fund a 30-year payout at an 80-90-100% level so they can play with the money in the stock market and take the cream right off the top.

    Let me ask you something: would you fund, now, 80% of your 30-year mortgage so some hustler could gamble in the stock market and take his fees for doing so? You’d have to be out of your mind.

    If we ever hit 4-5% growth again, the pension “crisis” will go away. Some other silly crisis will pop up. People have short attention spans.

    And no one’s ever missed a pension payment in Illinois, not even in the decades when they were funded at lower percentages.


  35. - RNUG Fan - Tuesday, Jul 9, 13 @ 7:33 pm:

    Well said word……I am worried the recent rebounce from Lehman is about to unravel.
    Have you see whats happened to bond yields?


  36. - mokenavince - Tuesday, Jul 9, 13 @ 10:36 pm:

    The State has had nitwits running it for to long.
    Quinn, Blago were inept and incompetent. We owe 100 Billion to pension funds, this was with Madigan’s leadership.
    How can we expect the GA to agree on anything.
    They will punt in 2 weeks as they have for the last 10 years. Taxpayers it’s 17 million a day.
    This is our money their burning. With no end in sight.


  37. - PublicServant - Wednesday, Jul 10, 13 @ 6:25 am:

    Norseman, you’re absolutely right that the profs will hate the pension diminishment, but professor recruitment/retention is based on the whole benefit package; salary and benefits. Do you really think the profs won’t be seeing raises to make up for any pension diminishment? My point is that their goal is to retain and recruit top professors first and foremost, and if an academic professional, a civil service employee, two professors and Robert Easter were in a sinking lifeboat, I’d be worried about who gets dumped overboard first.


  38. - PublicServant - Wednesday, Jul 10, 13 @ 6:35 am:

    Word, you’re spot on, and that’s why current and former state employees have only the courts to rely on to overturn any law thats passed by these schmucks, and while any other voter may or may not vote for a pol based on their position on the pension issue, I, my friends and family, will most certainly be single issue voters based on this issue, and not only voters but active participants in campaigning against them and getting the word out. You can take that to the bank.


  39. - Old and In The Way - Wednesday, Jul 10, 13 @ 7:20 am:

    Mokenavince
    No, it’s actually $4.9 million. Even PQ. Finally had to admit that $17 million was essentially a fictional number. As for the $4.9 million that is really a fictional crisis too. That number is what the pensions cost this year. No big deal. What do you think Medicaid costs per day? For that matter any of the states expenses? This is pr jumbo jumbo trying to scare the public, wise up Chicken Little! The sky is not really falling!


  40. - RNUG Fan - Wednesday, Jul 10, 13 @ 8:49 am:

    Public The universities are asking for givebacks


  41. - anal sex - Wednesday, Jul 24, 13 @ 8:08 pm:

    I’m extremely impressed with your writing skills as well as with the layout on your blog. Is this a paid theme or did you modify it yourself? Either way keep up the excellent quality writing, it is rare to see a great blog like this one today.


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