98 Comments - Dan Johnson - Thursday, Feb 5, 15 @ 9:31 am: He also called for a higher EITC and a higher personal exemption in the income tax for relief for working families. Reducing the prison population by 25% (11,000 people) is a really smart objective to reduce our Corrections budget. A surprising amount of progressive initiatives in there. - Joe Friday - Thursday, Feb 5, 15 @ 9:31 am: Why should firefighters and cops be treated differently than anyone else when it comes to pensions? Might well be an academic question, but still. I’d like to know his thinking on this. He’s dead-on right about sentencing reform and reducing prison population. That’s the thing about Rauner. Some of the stuff is really good and some of it is flat-out stinky. If nothing else, it is interesting. - PMcP - Thursday, Feb 5, 15 @ 9:33 am: Freezing property taxes for two years would really put Chicago in a bind… - Old Shepherd - Thursday, Feb 5, 15 @ 9:34 am: The property tax extension is only one part of the complex real estate tax puzzle. The other major part of the puzzle is the equalized assessed value of the taxing district in question. Generally speaking, if the property tax extension is frozen at a certain level, but the equalized assessed value in that taxing district falls at the same time, then real estate tax bills will still increase. Conversely, if the equalized assessed value increases, then tax bills will go down. - Gb20 - Thursday, Feb 5, 15 @ 9:34 am: Freezing PTELL just freezes what the government can collect year-over-year (the Extension). Interesting that is is freezing the government money, and not the individual property tax. So, for example, your property taxes could still go up if you are having net migration out. - Gb20 - Thursday, Feb 5, 15 @ 9:40 am: Also, I would add that possibly the number two reason why Chicago Public Schools are in a bind is because Mayor Daley froze the school district’s property tax extension for several years toward the end of his time in office, so he could say that he didn’t increase property taxes. Well, if you don’t allow the district to account for inflation in collections, when you have inflation in expenses, then you put yourself behind. And because of PTELL, you will never be able to catch up because it limits your annual increases going forward to roughly inflation. You do that for just a few years, and you suddenly have a 400 million dollar structural hole in CPS you can never make up. - Anonymous - Thursday, Feb 5, 15 @ 9:41 am: I don’t know what he means by ‘Protect historically accrued state pension benefits for retirees and current workers’. Does this include the AAI (aka COLAs)? Anyone know in more detail what he might be thinking here? And how can he think that it’s going to be constitutional to move current workers into a (very much) less favorable plan? - Arizona Bob - Thursday, Feb 5, 15 @ 9:41 am: We have a pretty good system in Arizona for school property tax levy increases. The levy doesn’t change unless we pass an override referendum. This relates to operating funds as well as capital work. The overrides are only for specific amounts of money, and aren’t carried through perpetuity. When an override expires, the community can vote to extend it by another 7 years, increase it, decrease it or let it expire. Most communities are supportive, when the schools can show they are providing something of commensurate value to the students. In the last two years we’ve extended three overrides for our schools where I live. I think this is the only way the schools can be held accountable. I think Rauner has to go one step further and require voter approval of working cash bond sales, which allows schools to increase taxes by as much as 20% by selling the bonds and directly adding the repayment to the real estate taxes without voter approval. “life safety” and “funding” bonds should also require voter approval IMHO. While we’re at it, why not require voters to approve all collective bargaining agreements that are at least 10% of the annual operating budget? Right now, school boards hide the contracts from the public until they pass it, often with devastating results on school finances. Another way of dealing with this is requiring a referendum to approve tax increases to pay for any contract increases. School unions should be empowered to set such a referendum by petition, with at least 10% of the registered voters in a district signing it to get it on the ballot. If the referendum doesn’t pass, the last contract is frozen. Just some ideas….. - UIC Guy - Thursday, Feb 5, 15 @ 9:42 am: Sorry, Annonymous at 9:41 is me. - Gb20 - Thursday, Feb 5, 15 @ 9:43 am: And, sure, you can do a referendum, but if the freeze is for 2 years, with no election for another 2 or 4 years, you create massive holes with no way for the voters to override via referendum until the freeze expires. - Oswego Willy - Thursday, Feb 5, 15 @ 9:43 am: I’m filing these omissions under; “Read the fine print” “The book is more detailed than the movie” To the omissions, Standing in the well of the House saying “things” is far different for a governor, remember he’s governor now, saying things at a college or a city auditorium… Rauner wants to “push”, but pushing on the stage and setting best for the rhetoric is really what this could be about. Dare I say it? Optics. A governor in the well of the House is saying his truths far more than anyplace other than in front of the glass entrance of the office at the capitol with the words “Governor” above the doorway. You don’t look like a polarizing leader at the most important bully pulpit you can stand in front of without measuring how the optics will be measured. You don’t want to be the polarizing governor right out of the box the first time you are seen speaking TO the General Assembly…assembled. Salesmen know what to say, but also when to say it, and even when the fine print needs to remain silent. That’s salesmanship… …until you get laughed at with the minimum wage “bit”, but I digress… Rauner was selling a car yesterday; Seats wrong color? Look at the whole car! Not enough horse power? Look at the whole car! Brakes aren’t factory issue? Look at the whole car! Details aren’t Rauner’s forte, but a big picture, he can paint that. Rauner told us, “Don’t get caught up in each point, take it as a whole!” So, between “taking everything as a whole” and “details to follow on that oher…stuff”. I would say Rauner is better…than Jerry Lundegaard selling that undercoating or GMAC. Illinois will find, we bought the undercoating. - Wordslinger - Thursday, Feb 5, 15 @ 9:45 am: Quite a list, but most of it still needs to be fleshed out to have any idea what he’s actually talking about. - Harry - Thursday, Feb 5, 15 @ 9:46 am: Joe Friday–unless you want 66-year old police and firefighters, Tier 2 doesn’t work for them. - Norseman - Thursday, Feb 5, 15 @ 9:48 am: New proposed initiatives equal new money questions. - Wordslinger - Thursday, Feb 5, 15 @ 9:48 am: What unions with apprenticeship programs have state contracts? The google didn’t have an answer. - Old Shepherd - Thursday, Feb 5, 15 @ 9:50 am: Under PTELL, taxing bodies can raise their extension no more than the lesser of 5% or the percentage change in the Consumer Price Index (with the exception of the addition of new property). In 2013, the percentage change in the CPI was 1.5%. Therefore, if a taxing body’s extension last year was $1,000,000, then their levy for the 2014 tax year (not taking into account any new property) can be no more than $1,015,000. The Governor’s proposal hurts local governments, while not doing anything that will substantially impact real estate tax bills, particularly in those counties where PTELL is already in place. - Tsavo - Thursday, Feb 5, 15 @ 9:51 am: To anonymous @9:41, this is what he said in April, so I would think it is the same plan. “I am the one candidate in this race who does not want to change the deal for existing retirees or existing accrued benefits,” he said. “What I want to do is create a second pension plan, in addition to the existing pension plan, and that should be a defined contribution, 401K-style plan.” Later, when asked to clarify, Rauner said that pension benefits would not change at all for current retirees. They would keep the 3 percent compounded cost of living raises that were taken away in the pension reform bill. The same would hold true for current workers. They would keep all benefits accrued up to this point in their pension, including, apparently, the yearly 3 percent compounded cost of living raise on that portion of their income in retirement. But current workers, under Rauner’s plan, would eventually have their pensions frozen and switch over to a 401K-type plan. Rauner did not explain how the pension system would be able to meet its obligations under his plan without newer, younger workers paying into it. Many pension experts and lawmakers have called the compounded COLA the main driver of the state’s $100 billion unfunded liability. - CircularFiringSquad - Thursday, Feb 5, 15 @ 9:51 am: Illinios mayors must be delirious. BVR will let them declare bankruptcy, freeze real estate taxes, let the local whack jobs monkey around with workers, stop inspecting water plants, put up the “welcome polluters” signs at the city limits as we race to be the next Indiana. Perhaps a bill change the name to West Indiana is in order Somebody wake up Brad Cole - walker - Thursday, Feb 5, 15 @ 9:52 am: Impressed that Rauner laid out an agenda, and moved past empty campaign talking points. Many of these have to be fleshed out, of course. Love to see him use his bully pulpit to immediately ask for and get commitments for tax levy freezes or reductions from school superintendents, mayors and county boards across the state, especially from those who claim to be “fiscal conservatives.” Even if he can get active Republicans lining up to do this locally, that would be a start. The waste and abuse in government in Illinois is more at the local level than the state level, and it is clearly bi-partisan. Good that he has put a spotlight on it. Hopefully he won’t just blame the GA if the locals fail to act responsibly. - Del Clinkton - Thursday, Feb 5, 15 @ 9:54 am: Good points Arizona. Voters should approve all reductions in revenue greater than 10% from the top 1% of incomes. - Ghost - Thursday, Feb 5, 15 @ 9:56 am: Points for somone recognizing the path to pension alterations needs to start with a change to the constitution. Two points though: 1 i beleive itnwoukd violate the fed prohibition on impairment to change rights for vested people even at the constitutional level. And 2 RNUG or someone pointed out if you pull everyone out that makes the problem much worse, since you are losing ongoing funding and you also lose the tier 2 people who are actually profitable long term - Trooper - Thursday, Feb 5, 15 @ 9:57 am: Mr. Governor: Please tell me where any new leader of any organization begins the job by telling his employees they are too highly paid? Tell me where any leader accepts unlimited cash from himself and others to prove an untenable agenda, then tells his workers they should have no voice in the matter. This is a state, not a business you raided, the rules are different and you will soon find out. Furthermore, stop comparing us to Indiana….its an insult! - langhorne - Thursday, Feb 5, 15 @ 9:57 am: this is a very ambitious agenda. it plays well to his base. i think madigan and cullerton will say-introduce a bill and we will consider it. it goes to committee, then probably the well known “conscientious and hard working subcommittee”, never to be heard of again. no one can be put on the spot for a NO vote, if the idea has some popular appeal. lets clear the decks and get to work on the crucial things WE HAVE to get done–budget, pensions, new collective bargaining agreement, infrastructure. thats how things would “normally” play out. different leaders, different results, but thats the playbook. the wrinkle this time is rauners $20 million hospitality fund. if, for example, his term limits CA gets tubed, and he starts a wave of (misleading) ads on it to inflame popular opinion, it changes things. not for the better. voter anger may be directed at the GA at first, but eventually it shows rauner is unable to deliver. put a few million behind a CA on redistricting. that would be far more effective than term limits. - Rich Miller - Thursday, Feb 5, 15 @ 9:59 am: ===it goes to committee, then probably the well known “conscientious and hard working subcommittee”, never to be heard of again=== I’d be willing to bet that some of those ideas may get a full floor vote, particularly the ones which can’t possibly pass. - chi - Thursday, Feb 5, 15 @ 10:00 am: =Empower local voters to control collective bargaining issues in their local governments and take more direct responsibility for their employees’ benefits.= Didn’t he say that almost verbatim? And Word, almost all (all?) the trades have contracts with the state, or the SoS. Small units, but there are contracts nonetheless. It’s not going to be the scandal he’s playing it up to be. As his numbers claim, 63% of the population is white, and 80% of apprentices are white. Even if accurate, that’s not a huge disparity. Should admittances to colleges, med schools, law schools, etc. also be equally apportioned? Especially public ones? What about hires at Private Equity and Bond firms that do State business. Law firms that do state business? Budget-cutting consultant firms like Arthur Laffer’s? I bet the trades are beating every one of those groups in diversity. I’d bet a lot of money. - chi - Thursday, Feb 5, 15 @ 10:00 am: I think Mark Brown had a similar point to mine re: PE firms, fwiw. - UIC Guy - Thursday, Feb 5, 15 @ 10:02 am: Thanks, Tsavo. I wonder whether he means it. (Of course the ILSC may well make all such questions moot.) - facts are stubborn things - Thursday, Feb 5, 15 @ 10:03 am: Moving all current workers into the tier 2 system would be a diminishment.. none starter. Pursuing permanent pension relief through a constitutional amendment would not effect any current workers or retirees. It would effect those hired after the amendment going forward. Special attention to firefighters and police. They are now (I believe) in the “alternative retirement system” which does give those with higher risk careers improved pension benefits. I retired under the alternative retirement system and it gave a higher percentage per year of your salary and allowed you to retire at a younger age etc. It also allowed you to retire bases on your last days pay if that was higher then the 4 highest years averaged together. - VanillaMan - Thursday, Feb 5, 15 @ 10:10 am: I believe and I hope that what we have been witnessing since his inauguration is caused by his political inexperience in governing and his mistaken misinterpretation of why he was elected. It seems that every time he opened his mouth to speak, he made enemies and confirmed to his critics his detachment from the realities of Illinois governing. Yesterday, it is possible that somehow he has figured out he was exposing himself as a fool. We need a serious governor and he needs to start demonstrating that he is. His staff needs to prioritize what needs to be taken care of immediately which effects us all, and what they believe they can achieve later. His Power Point presentation was a bad start. New governors need help. Bruce Rauner has no executive or legislative experience in government, so it appears that his need is greater than what we have witnessed together in Illinois’ recent history. His partisan campaign routine must come to an end or he will find his only effective friends to be fringe kooks who will at best be kindly ignored. - Wordslinger - Thursday, Feb 5, 15 @ 10:10 am: CFC makes a good comnection here between the proposals to freeze property tax levies and allow for municipal bankruptcies. Better slow down here and give these two a hard think. Together, fhey seem geared to allow municipalities to shed pension liabilities in the bankruptcy courts, like big business has done over the last 25 years. But careful what you wish for. You go into municipal bankruptcy, you lose all local control. A judge will decide your future, and all assets are in play. - Liberty - Thursday, Feb 5, 15 @ 10:11 am: I don’t think he is going to recruit more teachers by trashing them, depriving them of tenure and stealing their retirement. - ChiTown Seven - Thursday, Feb 5, 15 @ 10:11 am: Some reporter or legislator should ask Rauner whether his proposed “service tax” will include a tax on financial transactions — and he really should be pressed on this point. If some high-end services are to be taxed (e.g., legal services and accountant services), then ALL high-end services should be taxed. But taxing financial transactions won’t play well with Rauner’s biggest supporters, what Karen Lewis calls his “hedge fund homies.” - Rich Miller - Thursday, Feb 5, 15 @ 10:12 am: ===and he really should be pressed on this point=== I’m pretty sure he’s rejected that idea. - Judgment Day - Thursday, Feb 5, 15 @ 10:15 am: “Freeze property taxes for two years by amending Illinois’ Property Tax Extension Limitation Law. The total property tax extension could not increase above the 2015 levy year, except for new construction or property in a TIF district. Voters would still be allowed to override the freeze via referendum. That’s the first time he’s pointed to a specific path to freezing property taxes. Commenters who are knowledgeable about this topic are invited to chime in.” ——————- Old Shepard is dead on. If the EAV (taxable value) for a tax district goes down -and- the 2015 (pay 2016) tax extension for each tax district stays the same, the rate(s) for the tax district still increase. To make it even better, this so-called ‘tax freeze’ will have absolutely zero effect on TIF districts. TIF districts don’t use ‘tax extensions’, they use “TIF Increment value x (times) the composite tax rate of all the other non-TIF districts attached to that parcel/$100 taxable value”. So guess what, if the parcel taxable value stays the same (which means the TIF increment value, if any stays the same) and the non-TIF tax districts tax rates increase (due to lower EAV values), then the dollar amount going to the TIF district on the parcel actually increases (as does the overall tax bill, unless other factors occur). Try explaining all that to a property owner. And what are you going to do with SSA (Special Service Areas) where there has been bonded indebtedness issued requiring scaling payments over multiple years? Or bonded indebtedness in general. There’s almost always bond repayment schedules which includes annual tax levy amounts for each bond. And many increase annually. What you going to do? Does anybody realize that enacting this could require every single bond issue to have to be reviewed to determine what the effects of such payment schedule would be. Remember, there’s a fair number of bonds still active out there which didn’t require voter referendum when originally issued. Let’s not forget that a whole lot of these pre 2008 GO bonds were issued with ‘bond insurance’ which may be questionable, as most of the firms who wrote the insurance had some serious financial reverses during our “Great Recession”. This ‘proposal’ really needs some serious vetting, IMO…. - Fight Fair - Thursday, Feb 5, 15 @ 10:19 am: =Empower local voters to control collective bargaining issues in their local governments and take more direct responsibility for their employees’ benefits.= Small point per the post and chi’s comment at 10:00: That sentence is on page 6 of the speech, in a longer passage about “empowering the people of Illinois to control their futures.” - Joe Blow - Thursday, Feb 5, 15 @ 10:20 am: Rauner believes that a rising tide lifts all yachts and if your dingy gets in its wake then you will be swamped. - Demoralized - Thursday, Feb 5, 15 @ 10:21 am: I agreed with some of the things he outlined yesterday and disagreed with others. The one that baffled me was allowing voters to have a say in collective bargaining. How? Voters get to vote on contracts? That’s ridiculous. Why even have elected officials. Let’s just put everything to a vote of the people. We elect people to represent us. That’s how it works. If we don’t like what they do then we vote for somebody else next time. - Shemp - Thursday, Feb 5, 15 @ 10:24 am: Illinois needs a local police and fire pension structured similar to IMRF. Freezing property taxes will cripple cities trying to keep police and fire pensions from going under. Those are the largest drivers of municipal property tax increases. - Rural - Thursday, Feb 5, 15 @ 10:25 am: I read that the Highway Maintainers were statistically more prone to death on the job than police and firefighters. Does anybody else have that recollection? - Wordslinger - Thursday, Feb 5, 15 @ 10:34 am: The pipe dream a financial transactions tax continues in some circles. CME rolled the GA and Quinn for a massive tax cut in the depths of the recession, when taxes were being raised on everyone else. Based on that, you think a financial transactions tax is an option now with Rauner? - langhorne - Thursday, Feb 5, 15 @ 10:40 am: about that pesky constitution, (if i counted correctly) rauner wants six CAs, re: -cap on judgements -term limits -pension relief (scary) -merit based judges -consolidation of comptroller/treasurer -real balanced budget — sub-committee vs full house vote–i think madigan will pick and choose. he has been doing the full house votes lately, to send a message to the governor and public and membership. its all about roll calls and the next election. but with the range and scope of rauners agenda, i think subcommittee suffocation is still plausible. - DuPage - Thursday, Feb 5, 15 @ 10:46 am: @Rural 10:25 Yes, statistically the most dangerous job of all state employees. Most of the fatalities involve being hit by cars. - downstate commissioner - Thursday, Feb 5, 15 @ 10:49 am: Rural, I think I read that too, someplace-guess the pension plans think different, but what the heck, IMRF seems, at this point, to be safer than police and fire pensions. - Leave a Light on George - Thursday, Feb 5, 15 @ 11:00 am: “I read that the Highway Maintainers were statistically more prone to death on the job than police and firefighters. Does anybody else have that recollection?” I think statistically that’s true. However, what does that have to do with the pension discussion? - walker - Thursday, Feb 5, 15 @ 11:01 am: Even if most of what Rauner proposes will not make it through the legislature,(some won’t even get Republican votes), he still has a bully pulpit. Just because a state has a Republican governor, most voters will think they have lower taxes that “blue” states, even when they are actually higher. Much of what other governors sell as “business friendly” are more pure PR and image-building than actual differences from Illinois in practices or costs. Let’s have Rauner use his strengths to sell Illinois to the max, no matter what can get changed in our laws. Let him call for tax freezes at the local level. Even if that turns out to be entirely out of his control, he still can have impact on less wasteful local government. - RNUG - Thursday, Feb 5, 15 @ 11:01 am: == Why should firefighters and cops be treated differently than anyone else when it comes to pensions? == It’s part of a divide and conquer strategy. As I noted yesterday, he had several of those type proposals in his speech. Designed to distract the targeted groups into fighting between each other over crumbs while some other favored group walks off with the whole cake. Been used sucessfully in the past by various groups / people. - RNUG - Thursday, Feb 5, 15 @ 11:04 am: == I think statistically that’s true. However, what does that have to do with the pension discussion? == It explains why the highway maintenance people are included in the alternative formula pension plan same as other life / safety groups like state police and prision guards. - Del Clinkton - Thursday, Feb 5, 15 @ 11:05 am: @RNUG: This is exactly what Scott up north did. And he is viewed as some kind of hero by “conservatives”. - Frenchie Mendoza - Thursday, Feb 5, 15 @ 11:05 am: Rauner’s basic strategy is tapping into the “sour grapes” anger that most folks have these days. “Why should she have what I don’t?” That’s essentially Rauner’s strategy — and it’s certainly a foundation of GOP thinking and talking points. What’s fascinating to me, though — and what makes this class-A genius rhetorical manipulation — is that the people buying into this strategy — agreeing with it — don’t understand that the people *promoting* this thinking have profited off the very people they’re manipulating. Somehow the GOP sour-grapes strategy manages to incite anger in everyone — except the guy (usually a middle-aged white guy who is super-wealthy) promoting the strategy. I’m not sure how this happened — or when this happened — or why voters (all voters) continue to vote against their best interests. It’s a fundamental mystery — but the GOP continues to find ways to exploit it to their advantage. - Rural - Thursday, Feb 5, 15 @ 11:07 am: It would seem that the statistical underpinnings of the security pensions is in eed of realignment. Instead of taking the professions with the highest risk of mortality and re-evaluating every ten years for enhanced benefits. I would go a far as bet that whithin the trades there are significant differences. Yes being a correctional officer at Statevile or a cop in Chicago is dangerous, however Corrections JV or a police officer in Western I llinois not so much. With the mortality we have today Rauner would be better off mandating Turkey Chili in the firehouse than high risk pensions in low risk environments. - RNUG - Thursday, Feb 5, 15 @ 11:07 am: == And how can he think that it’s going to be constitutional to move current workers into a (very much) less favorable plan? == == But current workers, under Rauner’s plan, would eventually have their pensions frozen and switch over to a 401K-type plan. == It’s not constitutional based on previous rulings. We’ll know for sure in a few months. FWIW – I haven’t gone looking for it yet, but I heard the other day for a knowledgeable source there was a joint House / Senate bill or resolution introduced this session to repeal the Pension Clause. - downstate commissioner - Thursday, Feb 5, 15 @ 11:07 am: After 35 years, know a little bit about property taxes. Rauner’s plan might reduce property taxes in the long run, but it will reduce services, too. Local road budgeteers in rural areas are getting hammered by the increasing costs of petroleum and aggregate; in addition aggregate is being hauled further (because of rock quarries closing), which increases hauling cost The Consumer Price Index is a joke- it does not come anywhere near keeping up with inflation; the increases allowed due to it are better than nothing, but Rauner’s plan would force multiple referendums every year just to keep up with current expenses. By the way, Motor Fuel Taxes are not indexed to inflation- which means that the only way more money becomes available for road repair and maintenance is when State legislators finally agree to raise the tax, or local voters INCREASE property taxes. Want to eliminate property taxes? Okay by me, as long as replacement funding from another source is found, and good luck with that…. - RNUG - Thursday, Feb 5, 15 @ 11:11 am: - Del Clinkton - Yep. Classic divide and conquer. History has lots of examples of it. - flea - Thursday, Feb 5, 15 @ 11:13 am: Please note all Farmland tax assessments were changed two years ago and those modification which will increase/modify such taxes based on productivity indexes will go into effect this year. Those changes were agreed to! Freezing property taxes? - Arizona Bob - Thursday, Feb 5, 15 @ 11:14 am: =I read that the Highway Maintainers were statistically more prone to death on the job than police and firefighters. Does anybody else have that recollection?= On the list of job fatality and injury rates, police and firemen don’t even make the top 25. Who’s ahead of them? Virtually every construction trade, fisherman, butchers, many manufacturing jobs,and GARBAGE COLLECTORS. Funny thing. While police, firemen and prison guards have only average injury rates fro physical work, they account for a disproportionate number receiving disability benefits, even when they continue working at even higher salaries. I guess they know how to work the system…. One case in point is a former Chicago Ridge police Captain. He was suburban cop who hurt his back carrying a large deceased woman down stairs. Apparently he wasn’t lifting properly. He went on to make six figure income as a school superintendent and mayor, and for awhile was running for Congress, still receiving “disability” payments. Under the Illinois system you can step up to a higher paid job and you’re still compensated for a “disability” which presumably was compensating you for lost earning capability due to your injury. And people wonder why Illinois is going broke at all levels….. - Leave a Light on George - Thursday, Feb 5, 15 @ 11:14 am: “It explains why the highway maintenance people are included in the alternative formula pension plan same as other life / safety groups like state police and prision guards.” RNUG I know you are the wrong guy to challenge on a pension issue (kind of like bringing a kinfe to a gun fight) but I don’t believe Highway Maintenance folks are in the Alternative Formula plan anymore. Used to be. But no longer. - Mason born - Thursday, Feb 5, 15 @ 11:18 am: The only approach for his 401k or Tier 2 switch would have to be voluntary for existing members. IMHO. I guess he could offer some sort fo consideration to switch maybe cash value sick days, a 10% raise, or a very generous 401k match. Either way it is hard to see how any offer that entices tier 1 members to switch saves the state any money. - Concerned - Thursday, Feb 5, 15 @ 11:20 am: Rauner said he wants to run the state like a business. What he meant was he would approach the state government as his private equity firm would approach a business: 1. Reduce payroll 2. Outsource (see no. 1) 3. Get rid of the pension obligations by bankruptcy if necessary (see no. 1) 4. More money for those at the top of the food chain (shift the tax burden/make the tax burden more regressive so the 1% can reap the greatest spoils from his approach) 5. Walk away from the mess you created for people and claim great success for you and your fellow 1% travelers. - facts are stubborn things - Thursday, Feb 5, 15 @ 11:22 am: Pension realities. Retirees - no change. New employees - state can do what they want. Current employees - effected indirectly by pay. Also, negotiated change in contributions could become a legal part of a total contract package with wage, job condition, job security etc. Idea of changing benefits going forward is illegal because all employees are vested in pension system at time of hire or at least 6 months after. change constitution for future employees - can do. Could take away constitutional protection and move system to a gratuity system. Fund pensions — must do. Could amortize the pension liability, cut other programs, increase taxes, increase economic activity to increase revenue etc. etc. Key point - those entities that fund their pension system (regardless of the system) are healthy. Those that don’t fund the system are not healthy. The proper funding of a pension system is main driver of health of system and not the benefits paid out. Any system will not remain well funded unless the employer puts in their actuarial portion. Three legged stool of funding. 1. employer 2. employee 3. invested returns. When you take one leg away (employer) the stool falls over. - vttk17a1 - Thursday, Feb 5, 15 @ 11:22 am: Here is a link to the web page of Rep. Joe Sosnowski describing the proposal of placing a “Pension” constitutional amendment on the ballot. http://www.joesosnowski.org/2015/01/rep-sosnowski-targets-better-government.html See: House Joint ResolutionConstitutional Amendment 9 - Frenchie Mendoza - Thursday, Feb 5, 15 @ 11:24 am: — The only approach for his 401k or Tier 2 switch would have to be voluntary for existing members. — Or to offer other, creative solutions: Tier 2 members work a 30 hour week. They get another 2 weeks vacation. There *are* ways to actually offer legitimate consideration that would make many state employees make the comparison between short term benefits and long term benefits. Many working folks would gladly take short term benefits (time, especially) over the long-term pension. It’s not the wisest decision — but I realize some working parents need the short term stuff more than the long term stuff. AFAIK, no one talking about the pensions has proposed any kind of consideration that would actually *entice* people to switch. That hasn’t been on anyone’s radar, apparently. - AnonymousOne - Thursday, Feb 5, 15 @ 11:27 am: The pension proposals I assume would apply also to judges and legislators also I assume. - yinn - Thursday, Feb 5, 15 @ 11:28 am: Freezing taxes via PTELL will not give real property tax relief because there are too many exceptions to PTELL. PTELL does not apply to: –new construction/bonds –home rule taxing districts –refunding bonds –alternate bonds –TIF increments …and probably a couple others that I’ve forgotten. PTELL itself needs to be reformed because most taxing bodies will go to great lengths to avoid referenda and they’ve found all the loopholes. For example, park districts are allowed to issue refunding bonds each year so they can pump up their annual budgets with a nice debt levy. - facts are stubborn things - Thursday, Feb 5, 15 @ 11:29 am: under tier 1 the list of titles under the alternative system was rather long and under tier 2 it became very short. I believe only correction officers and police/fire remain in the tier 2 system. Even for those titles still under the alternative system in tier 2 their benefits were reduced. - facts are stubborn things - Thursday, Feb 5, 15 @ 11:31 am: necessity is the mother of invention and I believe once the ISC rules the invention (ideas, considerations etc.) will flourish. - Hit or Miss - Thursday, Feb 5, 15 @ 11:32 am: ===Impressed that Rauner laid out an agenda, and moved past empty campaign talking points.=== What impressed me most was that “He never uttered the word “pension” yesterday” as pointed out by the Tribune. One would think that the need for $100 billion, or more, for pensions would merit at least a passing mention. Failing to mention the pension issue is what I would call laying out only part of an agenda. - RNUG - Thursday, Feb 5, 15 @ 11:35 am: == I don’t believe Highway Maintenance folks are in the Alternative Formula plan anymore. Used to be. But no longer. == - Leave a Light On George - You’re right that they are no longer part of the alternative formula if they haved been hired since Tier 2 went into effect. Only state police, fire fighters and corrections / juvenile security guards qualify under Tier 2. But if we’re talking about the current workforce, most of them are still Tier 1. - Matt Belcher - Thursday, Feb 5, 15 @ 11:35 am: ===Impressed that Rauner laid out an agenda, and moved past empty campaign talking points.=== Mission creep. The plurality of voters sent Governor Walker, and now Governor Rauner, to the capitol for what is arguably one grand agenda: Keep our taxes as low as possible while performing only necessary government services in a competent, cost-effective manner. What voters got however was broad-spectrum implementation of Cato Institute and ALEC wish lists. In reacting and responding, the Governor’s opponents in Wisconsin wound up outmaneuvered, outspent and internecine, so the Governor survived. - foster brooks - Thursday, Feb 5, 15 @ 11:39 am: FWIW – I haven’t gone looking for it yet, but I heard the other day for a knowledgeable source there was a joint House / Senate bill or resolution introduced this session to repeal the Pension Clause. That cant be posible, rauner in a debate with quinn said the pension clause is a good amendment and wouldn’t be change it - RNUG - Thursday, Feb 5, 15 @ 11:42 am: - foster brooks - - vttk17a1 - saved me the trouble of looking for it. See 11:22 am - Toure's Latte - Thursday, Feb 5, 15 @ 11:45 am: Offering municipalities the bankruptcy option is a free pass for being fiscally irresponsible. Local pols can make any kind of promises they want knowing at the end of the line, it’ll be the court system’s problem. In the meantime, the cost of bonds goes up. I can’t imagine police fire (that are tied in locally for pensions) being happy about this. - SAP - Thursday, Feb 5, 15 @ 11:50 am: Not all counties have adopted PTELL. Does the Governor propose to force it down the throats of the remaining counties? - Rich Miller - Thursday, Feb 5, 15 @ 11:51 am: ===I haven’t gone looking for it yet=== http://www.ilga.gov/legislation/BillStatus.asp?DocNum=9&GAID=13&DocTypeID=HJRCA&LegId=83979&SessionID=88&GA=99 - SAP - Thursday, Feb 5, 15 @ 12:06 pm: Here is a handy map showing the counties that have already adopted PTELL, those that have rejected PTELL, and those that have not taken any action. http://tax.illinois.gov/LocalGovernment/PropertyTax/PTELLcounties.pdf - Will - Thursday, Feb 5, 15 @ 12:32 pm: @Az Bob- Not sure where you got your numbers but according to the BoL in 2013 the injury rate for police was 10.7 per 100. Construction was 3.8 per 100, manufacturing was 4.0 per 100 and Ag was 5.7 per 100. - Demoralized - Thursday, Feb 5, 15 @ 1:02 pm: @AZ Bob: Fill the shoes of a police officer or fireman sometime and then come back and let us know what a cake walk it is. I’ll be waiting with baited breath. Anybody can find some dopey anecdote to “support” their statement. You have a tendency to take those anecdotes as evidence of norms. So, again, go put on your badge or your fireman’s boots and then let us all know how easy it is. Dope. - forwhatitsworth - Thursday, Feb 5, 15 @ 1:11 pm: = “moving all current workers into the Tier 2 plan and/or a 401(k) for their future” = Doesn’t a worker’s constitutional pension protections begin on the first day of employment? Also, aren’t there ex post facto laws that would still protect pension contractual rights if constitutional amendments were adopted to lower pension benefits? Are we looking at another long drawn-out legal battle? - forwhatitsworth - Thursday, Feb 5, 15 @ 1:31 pm: Reform teacher tenure: Why do we need to reform teacher tenure? Teacher tenure was reformed just a few years ago. Many people believe that “tenure” guarantees a teacher lifetime security, which couldn’t be further from the truth. The only thing that tenure guarantees is that if there is a problem of some nature a teacher has a “due process” procedure available to counter concerns and accusations. A non-tenured teacher can be fired / released for any reason whatsoever and doesn’t have to be told anything. This might be what our new governor wants, but is this the way of treating people that our general public wants, especially when you may be next in line to give up your protections? - Leave a Light on George - Thursday, Feb 5, 15 @ 1:52 pm: Arizona Bob- A disability payment is not a pension. Next time your house is on fire or some one is breaking into it call the garbage man. Let us know how that works out for you. - RNUG - Thursday, Feb 5, 15 @ 1:59 pm: - forwhatitsworth - Thursday, Feb 5, 15 @ 1:11 pm: yes according to current interpertations, most likely, and yes I’m hedging a bit on the second item. If it is a straight contract question, then should be yes. - exbricklayer - Thursday, Feb 5, 15 @ 2:38 pm: === Reform the criminal code to ensure sentences are commensurate with the severity of the crime, and reduce penalties for non-violent offenses.=== It’s never been my thing, but maybe we should try decriminalizing weed. It would significantly reduce the prison population and if we taxed it – like Colorado – would raise some much needed revenue. I know there are down sides to it but those same down sides exist today. It’s already prevalent in our society so why not try making lemonade out of lemons? Plus it would give Brucie even more “street cred” with the Libertarian crowd. - Norseman - Thursday, Feb 5, 15 @ 3:01 pm: === = “moving all current workers into the Tier 2 plan and/or a 401(k) for their future” = Doesn’t a worker’s constitutional pension protections begin on the first day of employment? === I believe so based on the court decisions I’ve read. This is consistent with the analysis of a real lawyer, Eric Madiar, Cullerton’s former chief counsel. Civic Committee member, Sidley Austin LLP, wrote their own article that argues the pension protection clause only deals with benefits earned to date, but future benefits could be changed. Obviously, Rauner is embracing that theory. === Also, aren’t there ex post facto laws that would still protect pension contractual rights if constitutional amendments were adopted to lower pension benefits? === I’ve heard from attorneys who agree with this interpretation. But I suspect we would see an effort to change past benefits if such an amendment did pass. === Are we looking at another long drawn-out legal battle? === Yes we are! - jake - Thursday, Feb 5, 15 @ 3:20 pm: The Criminal Justice Reform Commission, charged with producing a plan to reduce the prison population, is a great idea. To advocate fir, and ultimately sign, a bill from the General Assembly to decriminalize or legalize possession of small amounts of marijuana would be a great first step. - Pot calling kettle - Thursday, Feb 5, 15 @ 4:16 pm: ==Eliminate unnecessary testing and institute a rigorous K-12 student growth measure, using ACT and other national metrics.== Ummm…He’s essentially says eliminate testing and replace it with more testing. (ACT stands for American College TESTING) - Pot calling kettle - Thursday, Feb 5, 15 @ 4:31 pm: We need to get rid of property tax caps, not put more in place. The tax levy is approved each year by people elected to oversee various local governments. They look at the needs of the body they oversee and levy accordingly (or cut the budget). Capping the levy ties their hands and limits their ability to do their job. The whole concept of a representative democracy is that the voters elect representatives to take care of business for them. If they don’t want higher taxes, they should vote in new people. Why elect someone to do a job and then tie their hands? - Rich Miller - Thursday, Feb 5, 15 @ 4:36 pm: ===The whole concept of a representative democracy=== You’re forgetting federalism. Local governments are creations of the state. - foster brooks - Thursday, Feb 5, 15 @ 4:54 pm: RNUG this is what I was referring to…. I personally don’t think that that constitutional language was a mistake at all [the pension protection clause in the Illinois state constitution]. I think pensions are a contractual obligation, and what is agreed to should be paid into and honored by all parties. http://schoolsnapshots.org/blog/2014/10/10/rauner-quinn-debate-in-peoria-ed-excerpts/ - RNUG - Thursday, Feb 5, 15 @ 6:03 pm: - foster brooks - Until the IL SC says different, it’s pretty much settled law that under the pension clause you can’t change terms for existing state employees. Go a bit further into that same transcript and you find Rauner is clearly arguing to change it (emphasis added in caps): “What I have argued from day one in this race is I think both the fair thing to do and the constitutional thing to do is to FREEZE THE CURRENT PENSIONS WHERE THEY ARE TODAY. Don’t change anything from what’s accrued. Pay those benefits as they come due, in the future. But STARTING TOMORROW, FOR FUTURE WORK, both FOR CURRENT EMPLOYEES and for future employees, we should CREATE A SECODN PENSION PLAN that’s more flexible and MORE AFFORDABLE–more of a defined-contributions style plan.” I listened to 3 ifferent Rauner speeches on the campaign trail. Exactly what he said and how he said it varied by who he perceived the audience to be. One of the speeches I listened to was given to RSEA (Retired State Employee Association) members and even in that speech trying to woe retirees I heard a whole bunch of weasel words that could be interpreted multiple ways by the speaker and listened. Until I see evidence to the contrary, I will listen to Rauner the same way I listen to a former President that had trouble with the common meaning of single syllable words. - RNUG - Thursday, Feb 5, 15 @ 6:08 pm: *listener*, not “listened” - Wordslinger - Thursday, Feb 5, 15 @ 8:43 pm: –maybe we should try decriminalziing weed- That and much more. It’s so crazy In Kentucky, you can’t call it Bourbon unless you toe the line. There are laws. Same thing with Tennessee and whiskey. Those are all acceptable, as is California wine Can you imagine the market for Illinois weed? Best soil and environment on the planet. It wasnt always corn and beans - foster brooks - Thursday, Feb 5, 15 @ 9:07 pm: RNUG i guess i didnt make myself clear rauner didnt have a problem with the pension clause in the debates but now he will push for legislation to remove it from the constitution - foster brooks - Thursday, Feb 5, 15 @ 9:13 pm: What is disturbing no legal analysis on removing the pension clause is out there,not even from Judge Gino Divito who is an expert in this field - Norseman - Thursday, Feb 5, 15 @ 9:15 pm: Foster, that’s where you went wrong. Rauner is not into the truth. He’s into MONEY. - Pot calling kettle - Thursday, Feb 5, 15 @ 9:31 pm: ==Empower government employees to decide for themselves whether or not to join a union.== ==Create local employee empowerment zones.== I’m pretty sure employees join unions to become empowered. He should ask them. - foster brooks - Thursday, Feb 5, 15 @ 9:50 pm: RE: Rauner is not into the truth. He’s into MONEY. trust me i’m aware of rauners BS just waiting for the so called liberal media to pick up on his schemes - RNUG - Thursday, Feb 5, 15 @ 9:55 pm: - foster brooks - Actually, there is a body of law on Illinois pensions out there prior to the implementation of the pension clause. Eric Madiar referenced some of it in his analysis, as did several of the post-1970 pension clause cases. It’s not as iron-clad / cut and dried as the pension clause, but from what I remember without re-reading things, it’s still more on the retiree’s side than not … and that’s when it was dealing with the pension as a gratuity, not as a contract. For the already retired here in Illinois that relied on the 1970 “contract” claim, I have a feeling the courts would deal with it under contract law provisions and that should also be favorable to the retiree. But what do I know? I’m not a lawyer; I just rely on reading old cases and logic. - JS Mill - Friday, Feb 6, 15 @ 10:02 am: @vttk17a1- You left this out, the honorable representatives bio info- Prior to joining the Illinois House of Representatives in 2011, Joe Sosnowski was elected to the DeKalb City Council after graduating from Northern Illinois University. In 2004, he moved and was elected to a city council again, this time for the City of Rockford. Joe holds a State of Illinois Real Estate Broker’s License and is currently the Director of Institutional Advancement at Rockford Christian Schools. He is a regional board member of Children’s Home and Aid, and was a 2008 recipient of the Rockford Chamber of Commerce’s “40 Under 40” Award, which recognizes young leaders from the Rockford, IL region. I wonder why he is really attacking public pensions? snark. - Amalia - Friday, Feb 6, 15 @ 10:11 am: Benjamin Cole, meet Elizabeth Lauten. Sorry, comments for this post are now closed.