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* Today’s New York Times lede is a blatant distortion of actual facts…
The first time Illinois tried to bail out its teetering pension fund by borrowing billions of dollars, it ended in disaster.
Nevertheless, the state is trying again.
The “disastrous” bond sale the NYT refers to was Rod Blagojevich’s arbitrage gamble. The state sold bonds, then the pension funds invested the money and were supposed to make enough off of investment income to not only pay off the bonds but have some extra cash for the funds. That didn’t work as planned. Far from it.
But this latest pension bond offering is just like last year’s bond sale. The state sells the bonds, deposits the money in the pension funds, then the state - not the pension funds - pays off the bonds.
The proposed bond sale is a completely different animal from the Blagojevich scheme, which didn’t count on a massive international financial meltdown. Illinois isn’t “trying again.” It’s doing what it and other states have done in the recent past. Borrowing to make the pension payment isn’t a great option. It’s not smart at all. But there are few alternatives, other than finding $4 billion in cuts for the rest of this fiscal year. Unfortunately, the New York Times has hopped on the hyperbole bandwagon with the rest of the muni fearmongers.
* The NYT also brings up what could be a real problem with the pension systems, but doesn’t elaborate…
The [state’s pension bond] prospectus states that Illinois calculates its statutory pension contributions each year according to an accepted actuarial method. In recent months, however, outside actuaries have reviewed the calculations and argued that Illinois’s method is not one of the permitted ones. They say that when Illinois enacted its 1994 pension law, it erred, a problem that has escaped detection until now.
It would be nice to know what that actuarial error was, but no explanation is offered.
* Meanwhile, we briefly mentioned this yesterday, and the AP picks up on it today…
While many states are trying to cut public employees and their benefits, Gov. Pat Quinn’s budget proposal would add nearly 950 people to the state payroll in departments ranging from Corrections to Public Health. […]
The administration said adding some jobs will actually save money because some state agencies, particularly the Corrections Department, are spending huge amounts on overtime as guards work long hours to make up for a staff shortage.
In other cases, the Democratic governor’s staff said, new laws require new hiring.
Legislation increasing oversight of nursing homes requires more inspectors, Quinn budget director David Vaught said. A huge public works program designed to boost the economy requires more engineers at the Transportation Department.
Here’s the headcount list from that House Democratic analysis…
Interesting that Quinn is giving the new Republican state treasurer a headcount increase of 45 workers.
*** UPDATE *** The treasurer’s office says they never asked for a headcount increase. They asked for a level headcount. They say this is apparently a misprint.
* Budget roundup…
* Muni Bond Insurers: Bankers Tricked Us
* Zorn: The borrowing battle: I contend that the question of whether the state should borrow $8.75 billion is misphrased. We’ve already, in effect and for all practical purposes, borrowed $10.7 billion, and the only question is how and how quickly we’ll repay that money.
* Social service providers outraged over Quinn’s proposed cuts
* Social services balk at Quinn’s spending cuts - Proposed cuts leave private agencies feeling used in political game
* Service agencies mull cuts
* Group says early education investment saves money
* Group calls for more money for early education, family support
* Quinn plan leaves educators cold
* Interest wanes for school consolidations
* Can the wheels on the bus still go round?
* Locals take aim at Quinn’s budget message
* Gov. Quinn’s budget address as delivered
posted by Rich Miller
Friday, Feb 18, 11 @ 9:12 am
Sorry, comments are closed at this time.
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I thought Rutherford was going to consolidate Treasurer offices and reduce his workforce? This comes as no surprise at all.
Comment by Solomon Friday, Feb 18, 11 @ 9:24 am
Aren’t there Departments missing from this list? Quinn moved a number of programs out of Human Services - is their headcount down?
Comment by How bout the whole story? Friday, Feb 18, 11 @ 9:26 am
Did Rutherford ask for the additional headcount? If so why? It sort of cancels out his closing of the satellite offices.
Comment by wndycty Friday, Feb 18, 11 @ 9:26 am
There is one similarity that this borrowing proposal has in common with the 2003 POB plan…the State would use a portion of the borrowing as revenue for general state operations in a single fiscal year rather than for financing debt. In the 2003 POB, that amount was about $3 billion. In Governor Quinn’s plan, that amount is about $1.45 billion.
Comment by Eastside Friday, Feb 18, 11 @ 9:28 am
Wisconsin’s budget deficit is 137 million dollars, which is fascinating.
why are we ADDING anyone period to the state payroll?
Comment by shore Friday, Feb 18, 11 @ 9:30 am
Shore, do you even read past the headlines? While some of these additions may not be necessary, maybe you can try getting past the “why are we ADDING anyone period” and seeing that some are and some will save money.
Comment by Small Town Liberal Friday, Feb 18, 11 @ 9:35 am
@shore Wisconsin’s budget deficit was created by Walker who added $140 million in new spending
Comment by wndycty Friday, Feb 18, 11 @ 9:35 am
Does the sizeable increase in correctional staff mean that the Quinn admin has abandoned any attempts to reduce Illinois’ prison population, despite the extreme racial disproportionality of our prison population.
Ditto the substantial increase in Juvenile Justice staff. How many of the new staff will be direct service vs. “management.” Management means political hire, I imagine.
Some of these increases may be legit–I get the engineers, and Illinois state government definitely needs more employees with real technical/professional skills and independent certification. However, in the context of Quinn’s no-layoff agreement with AFSCME, they are costly to the taxpayer. Because of the agreement, Quinn can’t reduce occupied headcount elsewhere, where efficiencies are needed, because he can’t lay anybody off.
A governor in hock to employee unions is not only bad for taxpayers, he is bad for much needed upgrade in state employee qualifications and technical competency.
Comment by cassandra Friday, Feb 18, 11 @ 9:40 am
At the rate we’re going…Illinois will have one of the strongest state infrastructures in the country, with a government that offers solid services to it’s citizens. Why would any business want to leave? Why would any business say in a place like, say, New Jersey or Wisconsin?
Comment by Deep South Friday, Feb 18, 11 @ 9:42 am
Looks like Dept of Corrections get 187 new jobs.
Which means at least 185 new workers comp claims.
The Mad Hatter strikes again. It’s time for a recall of Quinn.Plus the Lt. Gov. gets 8 new employees.I guest to round out the softball team.
Comment by mokenavince Friday, Feb 18, 11 @ 9:47 am
I think we should just close down the State of Illinois, order everyone out, give it back to the Potawatami tribe, and then reconquer it so we can start over!
Comment by formerpolitico Friday, Feb 18, 11 @ 9:51 am
===It sort of cancels out his closing of the satellite offices. ===
That closure resulted in one layoff. The offices, by the way, were provided free of charge.
Comment by Rich Miller Friday, Feb 18, 11 @ 9:52 am
Zorn has a pretty nifty list on who the state’s borrowed from via way-late payments, and who would presumably be first in line to get paid after borrowing.
* $6.7 billion in “accounts payable” to vendors that provide state services, as of Tuesday .
* $600 million in corporate tax refunds owed
* $1.6 billion in cash transfers owed to municipalities
* $700 million in outstanding Medicaid bills
* $1.1 billion in group health insurance payments due
(First estimate from Illinois Comptroller Judy Baar Topinka; other estimates from the office of Gov. Pat Quinn).
Even in a $630 billion state economy, getting square with those vendors owed $6.7 billion would be a pretty nice shot in the arm for the economy. Not getting paid for months at a time is obviously a drag.
Comment by wordslinger Friday, Feb 18, 11 @ 9:54 am
It would be interesting to know what the headcount increase is on a percentage basis.
A couple that jump out at me are Veterans Affairs is increasing by 97 and Treasurer by 45. Gaming Board has a big increase but I assume due to video poker issue.
I’m also not clear if the staffing is based on state funds or if it includes federal grant funded positions.
Comment by Objective Dem Friday, Feb 18, 11 @ 9:56 am
Given the dismal circumstances of many veterans returning from the front these days, I’m not clear on how adding 97 bureacrats to VA is going help them. Given the monies involved in creating these permanent civil service positions (read, lifetime jobs with expensive benefits and annual raises), and the poor results of helping efforts to date, maybe it would be better to give the money straight to the veterans.
Comment by cassandra Friday, Feb 18, 11 @ 10:09 am
On Headcount: Don’t look at headcount per say, look at total workers or total worker payroll & contracted cost. Additions to headcount should be offset by cuts in consultants or contracted labor, and it needs to be noted that state workers will PAY INTO the pension fund.
On School Consolidation: When practical, why not? Perhaps rather than consolidating schools themselves (facilities), at least consolidate administration & administrative staff…can be done.
Comment by JustaJoe Friday, Feb 18, 11 @ 10:12 am
The New York Times getting it wrong to the point it is, in the kindest terms, blatant distortion?
That’s been their Method of Operation since Jeff Gerth “wrote” the original Whitewater story … .
http://www.pbs.org/wgbh/pages/frontline/shows/arkansas/whitewater/lyonsarticle.html
Comment by Smitty Irving Friday, Feb 18, 11 @ 11:40 am
I think there may be some savings in corrections if you can add employees to reduce overtime because of the need for coverage 24/7. I can’t think of any savings that would accrue for any of the others, or why we can’t do without them.
Comment by Champaign Dweller Friday, Feb 18, 11 @ 12:22 pm
@Cassandra:
As usual you have no facts. They are NOT 97 bureaucrats at the Dept. of Vets Affairs. They are direct care workers. Try and do some research and use your brain once in a while.
Comment by Demoralized Friday, Feb 18, 11 @ 12:35 pm
Why are we hiring for the universities? I mean, I can see the need to keep them going, but I can’t see the need to spend more on them during an economically troubled time. And Chicago State is a pretty poor institution in the first place.
What are the agriculture staff needed for? I know we have substantial farm country all around this great state, but most of its in private hands and I don’t think the state does a lot of inspecting, other than for animal farms.
Comment by cermak_rd Friday, Feb 18, 11 @ 1:56 pm
Why are we hiring more workers for “Juvenile Justice”? Isn’t the parents’ responsibility to discipline their children? Is this some kind of government takeover of child-rearing?!?!
Comment by lincoln's beard Friday, Feb 18, 11 @ 2:25 pm
===Isn’t the parents’ responsibility to discipline their children? ===
Until they hold up a 7-11, yeah, it is.
Take off your goofy tinfoil hat, man.
Sheesh.
Comment by Rich Miller Friday, Feb 18, 11 @ 2:32 pm
@Cermack_rd says: “What are the agriculture staff needed for? I know we have substantial farm country all around this great state, but most of its in private hands and I don’t think the state does a lot of inspecting, other than for animal farms.”
You would be wrong. Dept of Ag inspects a whole lot more than ‘animal farms’. That’s just a part of what they do.
Every buy a gallon of gas? Ever wonder who makes sure that it’s really a ‘gallon’ of gas? Thank the dept of Ag for that. And EVERY pump is inspected EVERY year in Illinois.
And do you wonder who makes sure the gas that your pumping is really E-85, or Diesel, or Octane 87? Dept of Ag.
Do you ever drive by grain bins while on the highway? Wonder who makes sure that the grain contained within isn’t diseased, full of rodents, or otherwise unfit for sale? That would be Ag.
And guess who regulates the sale of that grain to make sure that everyone is playing fair? Again…Ag.
Do you like your eggs rotten or out of date? If you don’t, thank Ag for making sure they are not. Last year they were responsible for removing 65,000 DOZEN eggs from the supply chain.
Do you like your meat prepared in a facility that won’t make you ill, torture the animals, or do other nasties before you get your burger meat? Thank Ag.
Not to mention the 830,050 head of cattle that they inspected last year.
And while you are in the grocery store, make sure to take a look at the deli counter scale. Ag makes sure you really are getting 1lb of sliced turkey, and not more or less.
Get educated. Then you don’t look stupid when posting.
Comment by How Ironic Friday, Feb 18, 11 @ 2:32 pm
Re: the update from the Treasurer’s office. My assumption was that some employees under Giannoulias are gone, and these represent new hires, not increases above headcount from 2010. The clarification seems to agree with that assumption.
I think the same is probably true of the LG’s office too. Although if there is a Constitutional office that could be trimmed of employees, I think LG is the best place to cut.
Sorry Sheila, but you’re going to be last one there to turn out the lights at the end of your term. No point undertaking many new initiatives or hiring lots of staff. Lead by example.
So overall, I think these are newly filled positions, and not necessarily newly created positions.
Comment by 47th Ward Friday, Feb 18, 11 @ 2:40 pm
It is being reported that Governor Quinn is seeking federal backstops for his proposed pension borrowing?- If it is true, then it is apparent that he has taken leave of his senses- The Republican controlled Congress won’t give this request the time of day- The Chickens are coming home to roost and Illinois needs to confront the same realities that WS;NY;NJ and California are addressing and make actual meaningful cuts to go along with our new tax rates
Comment by Sue Friday, Feb 18, 11 @ 3:09 pm
–It is being reported that Governor Quinn is seeking federal backstops for his proposed pension borrowing?–
What does that mean?
Comment by wordslinger Friday, Feb 18, 11 @ 3:28 pm
- WS;NY;NJ and California are addressing and make actual meaningful cuts to go along with our new tax rates -
I don’t know the numbers on CA and NY, but Rich has pointed out again and again that NJ and WI haven’t made even close to the cuts that Governor Quinn has. Quinn isn’t perfect, but he’s addressing actual reality far more than Walker and Christie are.
Comment by Small Town Liberal Friday, Feb 18, 11 @ 3:31 pm
–The Chickens are coming home to roost and Illinois needs to confront the same realities that WS;NY;NJ and California are addressing and make actual meaningful cuts to go along with our new tax rates–
What state is WS? Do you mean WI (Wisconsin)?
Comment by AnonX Friday, Feb 18, 11 @ 3:38 pm
Demoralized–
Same thing. State employees are bureaucrats.
Although I would note that with “direct care” bureaucrats usually comes a sizeable administrative structure, with supervisors, managers, administrators, and so on. Is that included in the 97 I wonder?
I still think the veterans would be better off with the money. But will anybody ask them?
Comment by cassandra Friday, Feb 18, 11 @ 3:43 pm
Wordslinger- it means that the governor wants a federal guarantee of the bond debt to enable the State to get a decent interest rate which it can’t otherwise obtain based our dismal fiscal situation- it won’t happen and the taxpayers will have to pay higher interest assuming the bond deal proceeds-Quinn lives in his own reality
Comment by Sue Friday, Feb 18, 11 @ 4:26 pm
Are these newly crerated positions? Or are they looking to fill positions that have been vacant for a long period of time? I know in DOC that we are still way below are original alloted headcount in many facilities. In my division we have not hired more than handful of empolyees in several years and we have over 100 vacant positions. It would be helpful if it could be clarified if these were existing vacant positions.
Comment by southern illinoisan Friday, Feb 18, 11 @ 4:40 pm
Sue, where do you get that information?
Comment by wordslinger Friday, Feb 18, 11 @ 5:06 pm