SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
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?

Discuss.

- Posted by Rich Miller        


24 Comments
  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?

    Exactly.

    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:

    @sue:

    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.

    http://chicago.cbslocal.com/2014/03/21/rauner-enlists-bipartisan-support-in-seeking-new-solutions-for-illinois/


  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.


* Mautino misses deadline
* Emanuel accepts Rauner's apology, but with a catch
* Trade secrets or hiding payrollers?
* *** UPDATED x1 - 34 Latin Kings charged *** US Attorney to announce "significant new indictments against numerous alleged gang members"
* Question of the day
* Caption contest!
* Rauner is gearing up
* Convention delegates are "not normal" party members
* I'll believe it when I see it, Lisa
* SIU's two crucial mistakes
* Sandack says no "compromising information" was accessed
* *** UPDATED x3 - VIDEO: Kennedy looked horrible *** Chris Kennedy speaks to Dems, flees without talking to reporters
* G: Blagojevich doesn't deserve leniency
* *** LIVE COVERAGE *** Democratic National Convention
* 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

  
* LeEco acquires Vizio for $2 billion
* [Deal] Google starts up its Back to School discounts
* Apple earnings on the upper end of estimates, but forecast is still bleak
* Apple's Services Revenue Up 19% on App Store, Apple Music Growth
* Apple's Q3 2016 Revenue Drops 33% in Greater China as Europe Regains Position as Second Biggest Market
* Apple Sees iPad Revenue Growth for the First Time in 10 Quarters
* Don’t buy the Moto Z if you want monthly security patches

* White Sox could be both buyers and sellers
* Rodon returns to White Sox after rehab start
* Chris Sale apologizes to teammates and fans, doubles down against m...
* Saladino extends White Sox magic vs. Cubs
* Third straight walk-off fuels White Sox mojo
* Saladino extends White Sox magic vs. Cubs
* Melky robs Bryant of HR with riveting catch

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


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

Archives
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
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

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress

Loading


* Brown: Chris Kennedy outspoken on media — tight.....
* Rauner seeks fall vote on term limit amendment .....
* Rauner seeks fall vote on term limit amendment .....
* Rauner seeks fall vote on term limit amendment .....
* Chris Kennedy Slams Rauner, Dodges Questions Ab.....
* Rauner pushes term limits in QC visit - Quad Ci.....
* Rauner pushes term limits in Q-C visit - Quad C.....
* GOP makes term limits campaign issue in Illinoi.....
* Governor Rauner Calls for Lawmaker Term Limits .....
* Name Change for State Agency Headed by Local Ma.....


* Dennis Hastert's prison release date pushed back
* Dennis Hastert's prison release date pushed back
* Driver in fiery Chicago highway crash cited by state police
* New I-74 bridge requires moving many mussels
* Court finds man charged in drive-by competent to stand trial
* Illinois won't release details of 'Chicago Fire' tax credits
* 6-year-old Chicago girl home after shot in stomach
* Excerpts from recent editorials in newspapers in Illinois
* Witness shot before murder trial to testify when it resumes
* Illinois won't release details of 'Chicago Fire' tax credits

* Auditor General Mautino misses deadline to file amended reports
* Prosecutors: Rod Blagojevich isn't 'deserving of leniency'
* High-profile Republican state lawmaker abruptly resigns
* High-profile GOP Illinois lawmaker Sandack suddenly resigns
* 2 efforts in Illinois attempt to change sex offender laws
* Rauner renews call for term limits
* Rauner-created business development group gets new name
* State costs for amendment notices likely to top $2 million
* Rauner OKs regulating police use of cell-site simulators
* Illinois Supreme Court to consider remap ballot measure

* Moody's official: Chicago's still got time to fix pension problem
* Nearly 3 dozen gang members indicted in Chicago area
* Is this the end for health care mega-deals?
* What to know about Medicare's big bundled-payment expansion
* How to save Americans money on cardiac care


* Head of Schaumburg health company gets 6 years for Medicare fraud
* City asks court to preserve CPD misconduct records
* Brown: Chris Kennedy outspoken on media — tight-lipped on plans
* A.C. Milan, FC Bayern Munich expect familiarity in friendly
* Packers WR Jordy Nelson has tweak to his other knee
* How optimistic are you about the 2016 Bears? Take our test
* Two plays explore the darker side of urban existence
* Marjorie Ann Norton, publicist, sports fan, White Sox part-owner
* Clinton makes history in securing presidential nomination
* Buyers? Sellers? Williams says White Sox not sure yet


* Hillary Clinton makes history as first woman to lead major party as nominee
* White Sox lead Cubs 1-0
* Lovie Smith's message to Illinois fans: 'Come back'
* Federal charges net dozens of alleged Latin Kings in sweeping conspiracy
* 'Everybody loved him:' Mother of slain former North Lawndale basketball standout
* Ken Williams says White Sox handling of Chris Sale's outburst 'excellent'
* Day 2 at Big Ten media days: Coaches fire back over negative recruiting flap
* Amazon opening third Illinois warehouse in Romeoville
* Hebron president seeks to dismiss drug charges, pays back taxes
* 18-year-old killed, two other teens, 13 and 17, wounded in Austin


* Auditor General Mautino misses deadline to file amended reports
* Prosecutors: Rod Blagojevich isn't 'deserving of leniency'
* Kathleen Parker: The fury of Herr Trumpf
* High-profile Republican state lawmaker abruptly resigns
* High-profile GOP Illinois lawmaker Sandack suddenly resigns
* 2 efforts in Illinois attempt to change sex offender laws
* Rauner renews call for term limits
* Rauner-created business development group gets new name
* Pam Molitoris: Hunger doesn't take a summer vacation
* State costs for amendment notices likely to top $2 million


* Portillo's to Chambana? Well...
* Funding helps GROWTH assist RI homeowners
* Sheriff: No reason to believe shooter targeted officers
* Motorcycle driver ejected in crash airlifted from Herrin Walmart parking lot
* PODCAST: SportsTalk 07-26-16
* Marion agrees on several other redevelopment projects in the city
* GOP makes term limits campaign issue in Illinois
* Buffalo Wild Wings is coming to Marion
* Caterpillar continues struggle in second quarter
* Big Ten Media Days wrap


* Streamwood woman gets 6 years for Medicare fraud
* Prosecutors: Woman ran down boyfriend after argument over infidelity
* Why Glen Ellyn Park District tax bills will drop
* Suburban business community takes shots on Windy City Bulls new court
* Illinois police mark Speed Awareness Day on Wednesday

* 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

* Sen. Durbin, Mayor Emanuel, Members of Ill......
* Democratic Senator: Emails Suggest Sanders......

* Talk of the County - Chicago Tribune...

* Chicago Protest Outside Homan Square Police Facility Continues Into 4th Day
* Clinton Officially Secures Democratic Presidential Nomination
* Chicago Election Board Sued Over Alleged 'Discrepancies, Improprieties' During Post-Primary Election Audit
* Obama Administration Expands Refugee Program For Central Americans
* Cartoon Of The Day
* Alleged Latin Kings Gang Members Charged With Racketeering Conspiracy
* The ugly turn in Illinois politics.
* Proposed Wilson/Broadway Development Passes 46th Ward Z&D Committee
* Six Years after Dodd-Frank: Higher Costs, Uncertain Benefits
* Judicial Watch: Obama Attendance at Paris Climate Change Conference Cost Taxpayers $2,976,296.20


* Zika Virus And The 2016 Summer Olympics - Travel guidance for those heading to Brazil for the Olympics
* Two Cases of Legionnaires’ Disease Identified in Adams County - New admissions to Quincy Veterans' Home halted
* Serve Illinois Commission Announces $15.6 Million for AmeriCorps Programs - 32 grantees will place almost 1,600 AmeriCorps volunteers in communities
* Rauner Calls on General Assembly to Vote on Constitutional Amendment for Term Limits in Fall Veto Session
* IDNR Announces 2016–17 Waterfowl Season Dates




Hosted by MCS -- CapitolFax.com Privacy Policy -- SUBSCRIBE to Capitol Fax -- Advertise Here -- Mobile Version -- Contact Rich Miller