SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Why Quinn needs this bill to pass soon

Monday, Dec 2, 2013

* My weekly syndicated newspaper column was written Friday afternoon. Events have admittedly already overtaken some of it

As I write this, the House Speaker, Senate President and the two Republican minority leaders have announced a deal on a long-awaited and much-anticipated pension reform bill.

Other than the obvious fact that pension payments are diverting billions of dollars from other state programs like education and human services, Gov. Pat Quinn really wants this proposal passed before the end of the year for a couple of reasons, both political.

Illinois statute requires the governor to propose a new budget based on existing statutes. In the past, governors would almost always say they’d balance the budget if a new tax or fee was passed, or funds were transferred or programs were legislatively changed. That’s no longer permitted.

Gov. Quinn’s Fiscal Year 2015 budget address is scheduled for February 19th. If a pension reform bill is passed and signed into law by the end of the year, it won’t take effect until June 1st. But that’s after the budget address and before the start of the new fiscal year. So, Quinn could still use the proposal’s expected savings when he introduces his budget.

And that’s important because most of the temporary income tax increase expires smack dab in the middle of the coming fiscal year, which will blow more than a $3 billion hole in Quinn’s budget. And that means Quinn will be forced to introduce a budget that makes huge cuts if pension reform doesn’t pass.

If pension reform passes by the end of the year, the savings, which could be as high as $1.8 billion in the first year, can legally be used to “balance” Quinn’s introduced budget. With a strong revenue forecast, it’s possible that the coming year’s revenues could almost cover the remaining hole from the tax hike expiration.

That doesn’t mean, however, that Illinois’ finances would be in the clear. If past is prologue, a court will either set aside the new pension law while its constitutionality is adjudicated, or (perhaps more likely) require that any savings produced by the law be placed into an escrow account. If that happens, then legislators and Quinn will have to deal with a new hole.

The responsible thing to do, of course, would be to not include the pension reform savings in a new budget if the bill is passed. But that would mean proposing an election year budget that slashes education and human services to the bone, and what governor wants to do that ever - let alone in an election year?

And that brings us to the second reason.

The state pension systems are in dire straits because the state has never made enough contributions to the systems. For proof, just look at municipalities outside Chicago, which are required to make full payments. The Illinois Municipal Retirement Fund is very close to being fully funded. No crisis at all.

Quinn and the legislative leaders have long pushed for a funding guarantee to make sure that the state doesn’t skip its payments again.

But Republican gubernatorial candidate Bruce Rauner, who now leads the GOP primary field in two recent polls, is dead set against a funding guarantee.

Does Rauner really want the state to have the flexibility to skip pension payments again, which could lead to even more problems down the road? Well, there’s something else going on here.

Rauner wants a complete revamp of the pension system. He’d immediately put employees into a 401(k) plan instead. The irony is a bit rich here. Rauner’s investment firm made a fortune off of investing state pension fund money. Rauner is now semi-retired and reported making $53 million from his investments last year. A retired teacher making $53,000 a year would have to live another thousand years to equal one year’s income for Rauner.

Anyway, the funding guarantee is mainly just an excuse to derail the pension deal. Once pension reform is passed, it’s doubtful that legislators will want to revisit it unless the courts strike it down as unconstitutional. And since the proposal has support from the most powerful Republicans in the Illinois General Assembly, it would be uncomfortable for Rauner to continue his harangues against the compromise over the next year. Better to just kill it up front.

So since Quinn could end up facing Rauner in the general election, defeating the wealthy Republican on the legislative battlefield now would take some air out of his well-funded campaign down the road.

Passing this bill, in other words, is a must-have “twofer” for Quinn.

Thoughts?

- Posted by Rich Miller        


21 Comments
  1. - Oswego Willy - Monday, Dec 2, 13 @ 10:55 am:

    Great read …

    To the Post,

    I would have thought the best political move for Rauner would have been to work against the Bill behind the scenes, and if it fails, he keeps his crutch, if it passes and signed, THEN come out and talk about the Constituionality (at least give an indication that a Constitution exists) and hope for the Courts to rule against it, claim victory, and the High Ground, and … if Rauner wins, have his justification to try his insane idea to ignore the Constitution and ram a proposal through a Democratic GA, or try to do it by Executive Order, which again, has large Constitutional implications …

    But, to take on Quinn so frontal, Quinn’ leverage on the passing and signing of a Bill becomes larger, than had Bruce Rauner just held off until the GA met and let some of this play out, and work it beyond the media and the bloviating and the hyperbole.

    Again, a Quinn “Win” on this, a “twofer”, is now more in focus due to an overplay of a hand, and a slow play by the Four Tops and keeping Quinn out of it, and Quinn gets to play “hero” without ruining the negotiations.

    There is alot to be said to slow playing an issue like this, even if its your #1 Campaign issue.


  2. - RNUG - Monday, Dec 2, 13 @ 10:56 am:

    Dead on with the first part about counting the pension savings in the FY15 budget.


  3. - wordslinger - Monday, Dec 2, 13 @ 10:57 am:

    –But Republican gubernatorial candidate Bruce Rauner, who now leads the GOP primary field in two recent polls, is dead set against a funding guarantee.–

    Big surprise. That, in the private sector, is how some people do business. Contract for the service, try to wiggle out of paying for it after the work is done.

    In my experience, once you’ve identified that kind of “businessman,” don’t do business with them any more. They ain’t Midwestern.


  4. - DuPage - Monday, Dec 2, 13 @ 11:01 am:

    Does anyone think the SC will uphold this?


  5. - anonymous - Monday, Dec 2, 13 @ 11:09 am:

    What are the political consequences for Rauner if he has enough leverage to erode support for the bill? He is directly lobbying against this bill, while Republican leadership is working very hard for it. If pension reform fails to pass can Quinn blame this on a billionaire candidate for governor who made his fortune off public pensions.

    Thanks for the great coverage Rich


  6. - The Obvious - Monday, Dec 2, 13 @ 11:09 am:

    The statehouse are in a bubble on pensions. Attacking the livelihood of those working for the top two employers in Illinois is a losing issue statewide, no matter how much newspapers editorialize, and will likely cost Quinn the election.
    If Dan Rutherford defies expectations by coming out against pension reform he will likely be the next Governor.


  7. - RNUG - Monday, Dec 2, 13 @ 11:11 am:

    DuPage @ 11:01 am:

    I expect the severable parts that allow a fully informed choice or the parts that only affect new hires will be upheld.


  8. - facts are stubborn things - Monday, Dec 2, 13 @ 11:16 am:

    RNUG - Monday, Dec 2, 13 @ 11:11 am:

    =I expect the severable parts that allow a fully informed choice or the parts that only affect new hires will be upheld.=

    Do we know if there are parts that are indeed severable?


  9. - low level - Monday, Dec 2, 13 @ 11:17 am:

    The irony is Rauner says he knows how to “beat Madigan” or whatever it is he says. He runs campaign ads with his $18 watch while everyone knows he’s one of the richest guys around. Everyplace he goes he announce he has the answer.

    Madigan quietly goes and gets an agreement from the 3 other leaders and works with people in his customary methodical way.

    Rauner = customary campaign rhetoric.
    Madigan = quiet leadership that gets results.


  10. - Ruby - Monday, Dec 2, 13 @ 11:18 am:

    Just remember that someone in Springfield is playing three dimensional chess while the rest of us are playing checkers. If the pension bill is defeated, who will really be blamed?


  11. - PublicServant - Monday, Dec 2, 13 @ 11:18 am:

    ===Other than the obvious fact that pension payments are diverting billions of dollars from other state programs like education and human services===

    And all this time I thought it was a long term structual deficit that was affecting payments to education and human services, and that if not for the pension fund diversion, those worthy state programs would have been affected decades ago. Oh, and you’re welcome.


  12. - RNUG - Monday, Dec 2, 13 @ 11:30 am:

    acts are stubborn things @ 11:16 am:

    Yes, it’s on the last page of the draft bill … but I haven’t taken the time to slice and dice all the crossreferences as to which provisions are and aren’t.


  13. - Cassandra - Monday, Dec 2, 13 @ 11:39 am:

    The notion of this all being an elaborate mostly Democratic (but not all) charade to free up a couple billion pretend dollars for the next budget does keep coming into my mind. But the Republicans won’t get to say how most if any of that extra money is spent, right, in our one-party govt. And there is no guarantee there won’t be a tax increase anyway. What will be the rewards for Radogno and Durkin and their supporters? Bipartisanship is nice, but quickly forgotten.


  14. - 47th Ward - Monday, Dec 2, 13 @ 11:54 am:

    Early on, when Madigan agreed to the conference committee, didn’t he also say that it would be up to Quinn to find the votes to pass a bill? Has that changed, or is Madigan giving Quinn exactly what he wanted, good and hard?


  15. - Judgment Day (Road Trip) - Monday, Dec 2, 13 @ 12:33 pm:

    “Just remember that someone in Springfield is playing three dimensional chess while the rest of us are playing checkers. If the pension bill is defeated, who will really be blamed?”

    This entire situation reminds me of the saying that the best way to hide in plain sight is to flood the stage with actors.

    That’s what in effect Mike Madigan has done. And he’s (most amazingly) forced all the other actors onto the stage. Don’t know if the man ever laughs, but he’s outdone even himself this time.

    And even more amazingly, Madigan has created a situation of strange bedfellows all over the stage. Who would have thought Bruce Rauner and the “We Are One” coalition on the same side of the pension issue?


  16. - east central - Monday, Dec 2, 13 @ 12:37 pm:

    Beside the excellent points raised by Rich in his column, it seems that the Maag case may also be a factor in motivating a vote now. A Maag ruling upholding the contractual rights of retirees could become a serious obstacle to passing any of the pension proposals under consideration.

    On a related point, the comment by Nekritz about wiggle room in funding pensions suggests there is no additional contractual consideration for retirees, as others have mentioned this morning. Interesting that the leaders are willing to almost assure the success of a constitutional challenge by those already retired.


  17. - springfield native - Monday, Dec 2, 13 @ 2:42 pm:

    The problem with the first part of this is that the bill does not require recertification, nor does it allow for it. The systems will have certified the amount for FY 2015 by the end of this week, meaning that that will be the legal budgeted amount, and do to the continuing appropriation, will be the legally required and appropriated amount. Quinn is stuck with the 2015 number as it exists under current law.


  18. - cod - Monday, Dec 2, 13 @ 6:43 pm:

    Education costs consist mostly of compensation to teachers and educators, which includes vacations, sick days, salary, insurance, and pension funding contributions. How can compensation take away from education if they are education costs?!


  19. - Just The Way It Is One - Monday, Dec 2, 13 @ 7:50 pm:

    If it passes, it’ll be at LEAST a “twofer” for PQ IF he ends-up with BR as the opponent–and if somehow the Court picks it up to review right away and actually approves it with the money ($1.8 Bil.) freed-UP for the Governor to balance the Budget–it’d be even more than THAT for Quinn: a “threefer,” or Triple Play…! (Maybe what Hilary Clinton said about Quinn being the “luckiest Politician in the World” IS true)…!


  20. - Quinn is the Grinch - Monday, Dec 2, 13 @ 9:55 pm:

    Governor Quinn is the Grinch that stole Christmas to State employees and retirees. He is heartless. He lied in his last campaign when he said that he had a heart. He has an ice cold heart like all Chicago machine democrats.


  21. - RNUG - Monday, Dec 2, 13 @ 10:40 pm:

    acts are stubborn things @ 11:16 am:

    In case you didn’t see my comment in another thread, the AAI change, the funding guarantee and the bond prioritization are tied together and non-severable. Most the other provisions appear to be individually severable.


Sorry, comments for this post are now closed.


* Reader comments closed for the holiday weekend
* Fracking rules finally unveiled
* Question of the day
* A big IDOT roundup
* Even Steven, for now
* *** UPDATED x1 - Confirmed *** Report: Libertarians file charges
* Big guys dinged a bit, but little guys helped a lot
* Today's photo
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * iPhone 6, Moto 360, Windows 9 comments & more – Pocketnow Daily Recap
        * Sony SmartWatch 3, SmartBand Talk rumored for IFA launches
        * Lumia Instagramer of the Week: Olivier Wong
        * Greenify app gets update, boosts usage on non-rooted devices
        * IR 2.0 turns your phone into a universal TV remote
        * How Siri’s Founders Could Have Built The Next Google
        * The Week in iPad Cases: Looks and feel

        * IFA 2014: Here’s What We Can Get Excited About
        * This Week's Top Downloads
        * A Contractor’s Truck Can Be a Window into Their Work Style
        * Re/wind: Apple’s New iThing Is Coming, Re/code Goes To Burning Man and More
        * Make Browned Butter in the Microwave Instead of the Stove
        * Talk About Social Media "Rules" with Your Partner Ahead of Time
        * Apple Has Considered $400 Price for Wearable Device

        * De Aza sent to Orioles for pair of Minor League arms
        * Bassitt hounded by Tigers in big league debut
        * White Sox trade Alejandro De Aza to Orioles for two minor-league pi...
        * Ausmus loses challenge of close play at first
        * La Russa hopes energy builds on South Side
        * White Sox host JRW Little Leaguers
        * White Sox 6, Tigers 3: Chris Sale settles down, strikes out 13


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Chuck Sweeny: Gov. Pat Quinn gets a thumbs-up, .....
        * Bruce Rauner visits the Q.C...
        * Applicants sought for Plainfield park board..
        * Proposal made in Rauner's fiscal plan..
        * Statehouse Insider: Hands off investments..


        * Police: Family members found dead in Elmhurst home
        * Springfield drug suspect had reinforced door
        * Beyond governor race, big stakes in Illinois vote
        * Offers of help for homeless Little League champ
        * UIC faculty vote 'no confidence' in chancellor
        * GOP sees gains in Illinois voters tuning out
        * U of I smoking ban applies to football tailgaters
        * Man charged in hunting knife attack on Chicago bus
        * Engine trouble force cancellation of Amtrak train
        * Ingleside middle school teacher wanted for assault

        * Statehouse Insider: Hands off investments
        * State of unions: AFSCME wins some, loses some on outsourcing
        * State of unions: Domination of Illinois' workforce becomes campaign issue
        * State of unions: Lawmakers approved keeping some workers out of unions
        * State of Illinois posts applications for medical marijuana businesses
        * DNR issues long-awaited ‘fracking’ rules
        * Quinn grants 38 clemency requests
        * IDNR issues long-awaited ‘fracking’ rules
        * Court rules state retirees can stop paying health insurance premiums
        * Governor hopefuls rip each other on hiring, taxes

        * If only it were this easy to lift share prices
        * 'Chicagoland' star returns to school
        * Amid re-election fight, Quinn pushes through a tax on business
        * Chicago's worst IPO in 2014: Ryerson
        * Why ComEd is worried about your smartphone


        * Women at work: Female ministers find obstacles on path to pulpit
        * Prosecutors: Man in CTA stabbing permanently disfigured
        * Family of Little League champ without a home base of their own
        * Feds want to sentence fleeing former city comptroller
        * Aurora couple on O’Hare shuttle bus ‘landed in a pile of humans’ after crash
        * Joliet woman guilty in double-murder; two more to stand trial
        * Ex-Cook County worker charged with fraud in grant program
        * Feds: Teacher allegedly coaxed teen into taking pornographic pictures
        * Firefighter among two injured in South Chicago fire


        * Cops: Woman dies following Tri-State crash
        * 'Several' members of a family found dead in Elmhurst home
        * 2 dead, 9 hurt in city shootings
        * Prosecutors: Man robbed woman, then raped her in 2nd attack
        * Family mourns slain 9-year-old boy
        * Prosecutors: Man cut fellow CTA bus rider's face over 'disrespect'
        * Man found shot in head on Far South Side
        * Man robs Andersonville bank, suspected in Lakeview heist
        * Tinley Park boy drowns in backyard pool
        * Police: Man killed in West Side hit-and-run


        * Donated Breast Milk Helps Sick Infants
        * DNR Releases Fracking Rules
        * Update From Ferguson Via KWMU's Rachel Lippmann
        * Listen to State Week - August 29, 2014
        * Inspector's Report Reveals Clout Hiring At IDOT
        * 'Belleville' The Movie Is NOT A Documentary
        * Journalist and doctor encourage honest conversations about death
        * Libertarians Survive Illinois GOP's Ballot Challenge
        * Undocumented Immigrants Call For Presidential Orders
        * State Retirees To Stop Paying Health Premiums


        * Our Opinion: Driving into floodwater a deadly practice
        * Angie Muhs: A debate in Springfield would send the right message from candidates
        * Charles Krauthammer: Lower corporate tax rates. Now.
        * Bernard Schoenburg: Dillman, Watson looking at possible runs for alderman
        * Statehouse Insider: Hands off investments
        * Statehouse Insider: Hands off investments
        * State of unions: AFSCME wins some, loses some on outsourcing
        * State of unions: Domination of Illinois' workforce becomes campaign issue
        * State of unions: Lawmakers approved keeping some workers out of unions
        * State of Illinois posts applications for medical marijuana businesses


        * Illinois museum to display 1916 military equipment
        * Six taken to hospital from crash north of Urbana
        * Sunday Conversation: Alan M. Nathan
        * LIVE! Illini Classic
        * Asian carp barrier back up on Lake Decatur dam
        * NMSS to hold fundraiser
        * Buyer's remorse on Common Core for policymakers?
        * University of Illinois facing scrutiny over job-offer decision
        * GOP sees gains in Illinois voters tuning out
        * City wants to know if Main Street Market will be rebuilt


        * Downtown St. Charles Hotel Baker hosts celebrity party
        * Antioch drops season opener
        * White Sox trade De Aza to Orioles
        * Cary-Grove gets its revenge on Wheaton North
        * Back in action, Ciolek leads Wauconda

        * Representative Jan Schakowsky: On This Lab...
        * Schakowsky: House GOP to blame for gridloc...
        * Dems urge CMS to ensure accurate nursing h...
        * Connie Bruck Whitewashes Schakowsky--and J...
        * Legislation proposes mandating 24/7 nursin...
        * Statement by Representative Jan Schakowsky...
        * Farm Antibiotic Restrictions Proposed - Al...
        * Jan Schakowsky: Tom Marino's Response to '...
        * Telling Nancy Pelosi to do research is sex...
        * Schakowsky blasts Marino for 'sexist' atta...

        * Beyond governor race, big stakes in Illino......
        * Doings area students earn campus honors...
        * Doings area students earn campus honors...
        * Doings area students earn campus honors...
        * Doings area students earn campus honors...

        * Putin Hopeful Russia Won’t Lose Right to H......
        * Susquenita enters Tri-Valley League under ......
        * Putin hopeful Russia won't lose right to h......
        * Soccer-Putin hopeful Russia won't lose rig......

        * Election year CPS graduation rates.
        * “Driving Value within a Changing Network of Schools through Learning and Development: The Use of a 360° Feedback Tool To Drive Change and Bring Value in Public Education.”
        * Chris Christie comes to Chicago to campaign for Bruce Rauner. Although Rauner needs no lessons from Christie on how to reward political pals with pension funds.
        * Rauner uses armed investigators to scare off third-party voters. This is what Rauner’s democracy looks like.
        * Kristin Crowell. Beating Rahm requires deep organizing.
        * Why you should care about Hinsdale. Staff jumping a sinking ship? This is what happens when anti-public school activists win control of a public school board.
        * New London school board takes back its offer to “Dr.” Terrence Carter.
        * Frustrated? No. We are people with a vision of a city that works for its people.
        * Keeping retirement weird. The color line.
        * TMD. Lisa Madigan pleads insanity.


        * Quinn Refuses to Answer New IDOT Questions
        * IDNR Delivers Revised Rules to Implement Hydraulic Fracturing Regulatory Act - Rules strengthened to ensure public participation, improve transparency, toughen penalties and protect the environment
        * Governor Quinn Proclaims September as “Recovery Month” in Illinois - Encourages people to speak up about mental illness and substance abuse
        * Governor Quinn Dedicates Jane Byrne Interchange - Governor Renames Circle Interchange in Honor of Chicago’s First and Only Female Mayor to Date
        * Governor Pat Quinn Takes Clemency Action




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller