SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
Here we go again

Thursday, Mar 27, 2014

* Tribune

Quinn sought to portray his fiscal blueprint as part of an effort to end a cycle of budget game-playing by his predecessors that left state finances in shambles. He said part of his strategy was the controversial pension overhaul law last year that he argued would dramatically cut retirement costs and let more tax revenue flow to schools, health care and other services.

Rauner contends that Quinn’s pension alterations are too timid and will save the state far less than the governor contends. That argument may have gotten a boost Wednesday when the state’s bipartisan fiscal forecasting agency revised downward by several billion dollars its long-term savings projection for the pension overhaul.

* That snippet may have been based on this Bruce Rauner campaign press release…

On the same day of Pat Quinn’s budget address in which he broke his promise to keep the 67% personal income tax temporary, the Commission on Government Forecasting and Accountability released an analysis of the so-called pension reform law that shows it will save $22.6 billion less than was promised when the legislation was passed.

* This isn’t much different than the same stupid canard I dealt with in the subscriber section back in January. Here’s what I wrote back then. Substitute $15 billion with $22.7 billion and adjust everything else and you’ll get the same sort of results…

ONE OF THE DUMBEST ARGUMENTS EVER There’s been much screaming and hollering about how new calculations show that the pension reform law is projected to save $15 billion less than originally advertised last fall when the bill passed.

The complaints are based mainly on a recent Chicago Tribune article entitled “Illinois pension law saves $15 billion less than first thought.” The ultra-conservative Illinois Policy Institute, Bruce Rauner and other pension bill opponents have used the story as ammunition to claim that the law is based on a tissue of lies.

But the premise of that article was completely off base because it looked at the wrong number. The only truly valuable number is what taxpayers will end up shoveling into the pension system. Like everything else, it’s all about the final bottom line.

OK, we’re gonna get into a little math here, but it’s really easy so stay with me a minute.

The basic thing to remember here is that calculations originally showed last fall that pension reforms meant taxpayers would owe the pension systems $220 billion over 30 years. A recalculation with updated numbers, however, showed the total taxpayer obligation is now at $205 billion. That’s really good news, but it’s being irresponsibly spun as bad news.

The original estimates were based on Fiscal Year 2012 data. Without the new pension law, the data showed that taxpayers were on the hook for $380 billion in pension payments over 30 years. The reform law reduced that obligation estimate to $220 billion, which was a 42.1 percent reduction in what the government would have to give the pension funds.

When the numbers were updated to include Fiscal Year 2013 data (which included some pretty high investment returns), the new research found that taxpayers were now on the hook for $350 billion over the next 30 years without the reforms. The reform law would result in a 41.4 percent reduction to just $205 billion.

So, what about that $15 billion difference touted by the opponents? Where does it come from?

It’s not that hard to figure out and here’s an easy little example if you’re still scratching your head.

Let’s say you’re looking for a new watch. You find one at Macy’s that’s originally priced at $109 and is on sale at 40 percent off. You’d save $43.60 for a final price of $65.40. That’s still more expensive than Rauner’s watch, but not a bad deal at all.

But then you go next door to Bergner’s and you see the exact same watch listed at $100 and it’s also on sale for 40 percent off. You’d save $40 with the 40 percent sale, but your final bottom line price would be $60, compared to $65.40 at Macy’s,

It doesn’t take Einstein to figure out the better bottom line deal here. Yeah, your 40 percent “savings” are higher with the more expensive Macy’s watch, but the bottom line price you pay is significantly lower at Bergner’s.

The Policy Institute and Rauner would have you believe that Bergner’s is somehow ripping you off because the sale’s 40 percent reduction amount is lower than Macy’s. But that’s just plainly ridiculous. Who thinks like that?


- Posted by Rich Miller        

  1. - PublicServant - Thursday, Mar 27, 14 @ 9:16 am:

    ===67% personal income tax===

    LOL. What’s a word here, or a word there in the grand scheme of things?…

  2. - I B Strapped - Thursday, Mar 27, 14 @ 9:22 am:

    It’s all Mox Nix anyway when the ISC Jams Madigans scheme and Rauner goes to Plan B next year.

  3. - wordslinger - Thursday, Mar 27, 14 @ 9:28 am:

    The Tribbies should stay away from “numbers” stories. Like Barbie said, “math is hard.”

  4. - Bill White - Thursday, Mar 27, 14 @ 9:32 am:

    === The Policy Institute and Rauner would have you believe that Bergner’s is somehow ripping you off because the sale’s 40 percent reduction amount is lower than Macy’s. But that’s just plainly ridiculous. ===

    In terms of intellectual honesty, this belongs in the same category as counting people who move out of state (and therefore do not receive IL funded Medicaid) as example of Medicaid fraud because the old names and addresses were never purged from the database.

  5. - Grandson of Man - Thursday, Mar 27, 14 @ 9:35 am:

    The key is the strong investment returns in 2013 that lowered the overall taxpayer liability. The entire pension debt model shifted downward in cost, which is good.

    What the IPI and their allies are doing is using reverse psychology. A 67% income tax increase sounds horrible, even though the tax was raised from 3-5%, which still makes us competitive with most tax states. It seems to be the same thing with the $22.6 billion.

  6. - langhorne - Thursday, Mar 27, 14 @ 9:36 am:

    once a campaign gets a headline and/or story they like, it lives on forever. no matter how discredited. even if it is from the bone gap gazette.

  7. - Political Neophyte - Thursday, Mar 27, 14 @ 9:57 am:

    Who thinks like that? The Policy Institute thinks like that.

  8. - train111 - Thursday, Mar 27, 14 @ 10:10 am:

    Who thinks this way? Campaign consultants writing 30 second adds for TV.

    Which is easier to sell a campaign on–Anti-tax, anti-spend, anti-everything hysteria or cold boring facts?
    Most overpaid consultants are going to run away with the first rather than trying to explain the second.

  9. - dupage dan - Thursday, Mar 27, 14 @ 10:13 am:

    Nice explanation - helps those of us (me) who don’t have the inclination to work that out.

    However, why does it matter? Does anyone really think the state gov’t is gonna keep to that schedule? We were all ramped up with Edgars program, how long did that last? The gov’t is gonna wait till this settles down a bit - hopefully, in a few years, folks memories will be a little fuzzy, and the politicians can go back to their previous behavior.

  10. - Palm Tree - Thursday, Mar 27, 14 @ 10:21 am:

    Who thinks this way?
    People who are trying to craft an argument to justify their No vote on the most comprehensive pension reform package in Illinois history. A package that credit rating agencies have praised. A package that if found constitutional reduces total taxpayer costs on pensions by almost half.

    People who initially supported the bill but were told by their financial benefactor to vote No.

    Now they are looking for cover for that No vote. People like Representative McSweeney.

  11. - Yellow Dog Democrat - Thursday, Mar 27, 14 @ 10:54 am:

    More embarrassing reporting from the Tribune…Abdon has a lot of work to do.

  12. - Timmeh - Thursday, Mar 27, 14 @ 10:58 am:

    For someone whose company ran the pension funds, it seems like Rauner doesn’t understand the numbers. Or is willingly distorting them. Either way, that’s not what you want from an “outsider businessman” running for governor.

  13. - MrJM - Thursday, Mar 27, 14 @ 11:09 am:

    Who thinks like that?

    Oh, this has nothing to do with “thinking”…

    – MrJM

  14. - 47th Ward - Thursday, Mar 27, 14 @ 12:55 pm:

    Overheard in the Tribune Tower:

    The numbers all go to eleven. Look, right across the board, eleven, eleven, eleven and…

    Oh, I see. And most amps go up to ten?


    Does that mean it’s louder? Is it any louder?

    Well, it’s one louder, isn’t it? It’s not ten. You see, most blokes, you know, will be playing at ten. You’re on ten here, all the way up, all the way up, all the way up, you’re on ten on your guitar. Where can you go from there? Where?

    I don’t know.

    Nowhere. Exactly. What we do is, if we need that extra push over the cliff, you know what we do?

    Put it up to eleven?

    Eleven. Exactly. One louder.

    Why don’t you just make ten louder and make ten be the top number and make that a little louder?

    These go to eleven.

  15. - sue - Thursday, Mar 27, 14 @ 1:02 pm:

    Many(including myself) would have no problem leaving the personal tax rate at 5 percent if it had solved the State’s fiscal issues-BUT IT DOESN’T seem to have worked-employment remains stagnant, credit ratings have been slashed; bills remain unpaid and pensions are still grossly underfunded- The problem doesn’t seem to be revenues but spending- Quinn had the benefit of increased tax revenues for 4 years and rather then reduce the State’s deficit- he found a number of programs to expand- Assuming the rate remains at 5- it would be nice to see the legislature bring the spending down to the level where revenues equal outlays

  16. - Rich Miller - Thursday, Mar 27, 14 @ 1:03 pm:

    ===Quinn had the benefit of increased tax revenues for 4 years and rather then reduce the State’s deficit- he found a number of programs to expand===

    Which were?

  17. - titan - Thursday, Mar 27, 14 @ 1:22 pm:

    Who thinks like that?

    A very large portion of the general population are functionally innumerate. They can be made to think like that.

  18. - Demoralized - Thursday, Mar 27, 14 @ 1:44 pm:


    Look forward to your list of cuts that would need to happen if the tax increase expired. The revenue didn’t go to a bunch of new spending. It went to basically maintain and hopefully help keep the ship from completely sinking. Discretionary spending has been cut and cut and cut. They’ve passed legislation to deal with the pension (whether it’s constitutional or not is another question), which is a huge cost driver. I’d be interested to see what additional brilliant ideas you would have to make up for the shortfall if the tax is allowed to expire.

  19. - DuPage - Thursday, Mar 27, 14 @ 1:45 pm:

    If it saves so little then it won’t be missed when the ILSC throws it out!

  20. - jerry 101 - Thursday, Mar 27, 14 @ 1:56 pm:

    Holy stinkbombs Batman! I’m paying a 67% income tax rate in Illinois?!?! Dad gum it!!

    Bruce Rauner. Businessman. Bad at math.

  21. - wordslinger - Thursday, Mar 27, 14 @ 2:19 pm:

    –Bruce Rauner. Businessman. Bad at math–

    Give him a break. He’s just conflicted.

    “…and, frankly, sometimes I disagree with myself.”

    Best. Quote. Ever.

  22. - Driveby - Thursday, Mar 27, 14 @ 3:39 pm:

    I always though that the unfunded liability was the thing to look at. I’ll have to read here more often for a more enlightened viewpoint like this.

  23. - Donkey Dem - Thursday, Mar 27, 14 @ 3:54 pm:

    Cut the Nursing Home’s Mental Health, and the Poor. That’s the why to balance the budget. And Oh, give the unions whatever they want.

  24. - RNUG - Thursday, Mar 27, 14 @ 6:27 pm:

    - wordslinger - Thursday, Mar 27, 14 @ 2:19 pm:

    I pointed that quote out to my wife when I read it in the paper the other day. Probably the most honest thing the man has said …

Sorry, comments for this post are now closed.

* Reader comments closed for the holiday weekend
* Zopp makes small cable TV buy during debate
* Exelon Just Received A $1.7 Billion Rate Increase Through The Market-Based Capacity Auction
* Question of the day
* Raoul: "Inflexible demands plus willful amnesia is no recipe for any negotiation"
* Violence spike blamed on budget cuts
* *** UPDATED - Home and doing better *** I'll be back later
* Gray hired by Trump
* MLB playoff open thread
* Once more, with feeling
* B3 fallout?
* Unclear on the concept
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Visit our advertisers...







Search This Blog...

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

Search the 98th General Assembly By Keyword

* Acer setting up for October 12 Windows 10 devices day
* 3D Touch Control Center concept reminds Apple of what it can do
* Google is getting more search volume from smartphones than PCs
* BATBAND: Sleek, ear-free headphones won’t hurt your ears, now on Kickstarter
* Moto X Force passes through Chinese regulators
* Still time to win: enter to take home this HTC One M9 while you can
* Master your super human skills, control powers in ‘Heroes Reborn: Enigma’

* Hahn feels White Sox fanbase's frustration
* Sox to rely on improvement of core in 2016
* One benefit of the White Sox' lefty-heavy rotation
* Foot issue to sideline White Sox prospect Hawkins
* After second base, it was no-go White Sox
* Scouting, player development key for White Sox
* Arbitration-eligible White Sox won't put dent in payroll


Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
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


RSS Feed 2.0
Comments RSS 2.0


* Anti-violence programs shut down as Chicago sho.....
* Anti-violence programs shut down as Chicago sho.....
* Anti-violence programs shut down as Chicago sho.....
* Rauner names new chair of Illinois Historic Pre.....
* Anti-violence programs shut down as Chicago sho.....
* Anti-violence programs shut down as Chicago sho.....
* Anti-violence programs shut down as Chicago sho.....

* Rauner names contributor to preservation agency
* Ex-governor says ex-convicts shouldn't be labeled felon
* Rockford University looking to finish raising $17.3 million
* Corruption arraignment Tuesday for ex-Chicago schools CEO
* Chinese students bring new business to Champaign-Urbana
* ISU president calls for end to budget turmoil in Springfield
* EXCHANGE: Many point with pride at World War II service
* NIU to rededicate plaque honoring fallen WWII veterans
* Chicago State names Alabama university official to top post
* Mural, crosswalk art project underway downtown Springfield

* Rauner names new chair of Illinois Historic Preservation Agency board
* Rail work to shut down Chicago-St. Louis Amtrak trains for two weeks
* More than 400 press passes issued for this year's Illinois State Fair
* Rail work to shut down Amtrak trains for two weeks
* Ex-governor Ryan says ex-convicts shouldn't be labeled felons
* Anti-violence programs shut down as Chicago shootings climb
* The Papers of Abraham Lincoln project still in jeopardy; memo paints discouraging picture
* Democrats say Rauner 'needs to get serious' on budget
* Democrats: Illinois could go broke without budget
* Gov. Rauner ends quarter with $19M in campaign fund

* Notre Dame gets $20 million for global investing institute
* The Rock 'Em Sock 'Em Robots approach to governing
* Cubs World Series tickets would be most expensive in history
* Union files lawsuit on Chicago Park District pension bill
* Paul Ryan said to weigh speaker bid under GOP pressure

* Patrick Kane spoils Islanders Brooklyn debut
* Jonathan Toews sets up Patrick Kane with ridiculous no-look pass
* Ryan says ex-cons shouldn’t have to wear ‘felon’ label
* Watch: New Blackhawk Artem Anisimov scores shorthanded goal
* Tearful Ald. Carrie Austin on health crisis that nearly killed her
* Emails: Ex-CPS CEO was outraged City Hall questioned no-bid deal
* Artemi Panarin’s personality, skill breaking down language barrier
* Parents blast CPS for cuts in special ed programs
* Mayor tells U.S. attorney general that Chicago cops are in “fetal” position
* Blackhawks’ success further motivates Nick Leddy

* Emanuel supports principal training amid CPS scandal fallout
* Elmhurst police ask for help identifying woman killed by Metra train
* Bomb threat at GSU cancels classes
* Man, 62, found dead outside on Far South Side
* Teen is charged in killing of longtime Chicago police civilian employee
* Ryan says 'felon' hurts convicts' chances of finding work
* Police charge father after incident that left infant son seriously injured
* Black bear that visited Indiana this summer returns to state
* Mother cleared of endangerment charges in death of infant daughter
* Assault weapons bans at stake in Highland Park case before Supreme Court

* Rauner names new chair of Illinois Historic Preservation Agency board
* Rail work to shut down Chicago-St. Louis Amtrak trains for two weeks
* More than 400 press passes issued for this year's Illinois State Fair
* Ex-governor Ryan says ex-convicts shouldn't be labeled felons
* Anti-violence programs shut down as Chicago shootings climb
* The Papers of Abraham Lincoln project still in jeopardy; memo paints discouraging picture
* Mike Lang: 'Racial Taboo' screening will advance local unity efforts
* Democrats say Rauner 'needs to get serious' on budget
* Bernard Schoenburg: Supreme Court refuses to hear Illinois Policy Institute appeal over press access at Statehouse

* LIVE! IlliNOISE Night
* Rantoul man charged with aggravated criminal sexual abuse
* Final Word: Cubit returns to Kinnick
* Tate: Big Ten QBs miss mark
* PODCAST: Sports Talk 10-09-15
* Wetter days ahead by mid-month across the Corn Belt
* High school football scoreboard, Oct. 9, 2015
* VIDEO PICK: UI 21, Iowa 14
* Urbana High School Homecoming 2015
* PODCAST: Illini Notebook with Brian Barnhart

* Rozner: Cards execute plan to perfection to take Game 1
* Boy Scouts closing Woodstock's Camp Lakota, two in Wisconsin
* Officials: Five people hospitalized after Long Grove crash
* Lackey, home runs too much for Chicago Cubs
* Priest who led Mundelein retreat, served in Des Plaines, Schaumburg, dead at 79

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Boulder Rep. Jared Polis introduces afford......
* Senator Durbin Calls on VA and Department ......

* Kirk supported money to Illinois waterways......

* Parents, Advocates Speak Out Against CPS Special Need Education Cuts
* Special education
* Marine Drive To Undergo Repaving
* Schakowsky Introduces Bill To Make Renewable Energy Tax Credit Permanent
* Byrd-Bennett Arraignment Scheduled For Tuesday
* Illinois' first lady appears in domestic violence PSA
* Roseburg Oregon protesters tell Obama: "Go Golf!"
* Positive Loitering Tonight, 7pm-8pm
* Islamic extremists cut off 12 year old Syrian boy's fingertips before public execution
* Rauner addresses LGBT Business Graduate Conference

* Board’s New Rules Will Reduce Risk of Tire Fires and Disease-Carrying Mosquitos
* Illinois Hosts Inaugural Interstate Medical Licensure Compact - Aims to increase health care access through multi-state physician licensure program
* IEMA Announces Elgin Community College Attains ‘Ready to Respond Campus’ Designation - Elgin one of five Illinois campuses to receive distinction
* New Mortgage Loan Interface Increases Efficiency, Compliance
* State Fire Marshal Ushers In Fire Prevention Week - “Hear the Beep Where You Sleep!”

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