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Illinois

* Veto session is less than two weeks away.

Which reminds me, I need to get some suits to the cleaners.

Anyway…

* The Question: Do you think a pension reform bill will be passed by both chambers during the veto session? Take the poll and then explain your answer in comments, please.

customer survey

posted by Rich Miller
Wednesday, Oct 9, 13 @ 12:34 pm

Comments

It’ll take Republican votes and they have no reason to help the Dems with a political victory.

Comment by Budget Watcher Wednesday, Oct 9, 13 @ 12:36 pm
Just like Washington DC, they’ve been trying to do something really important for a long time. Both capitals are far better at delaying then working.

Comment by Just Me Wednesday, Oct 9, 13 @ 12:36 pm
I said “No” but I guess what I mean is they will pass something and CALL IT pension reform. But I dont believe it will actually fix the problems by really reforming pensions.

Comment by RonOglesby Wednesday, Oct 9, 13 @ 12:37 pm
No. Its madigans way or the highway

Comment by foster brooks Wednesday, Oct 9, 13 @ 12:37 pm
No, they need a Republican governor to sign it.

Comment by Anon2 Wednesday, Oct 9, 13 @ 12:39 pm
I voted no. Although pensions don’t need “reforming” whatever that means (stop stealing the payment into them is what needs to be reformed), I’d hope that something does pass so that we can have the courts tell all we need tax reform.

Comment by Anonymous One Wednesday, Oct 9, 13 @ 12:41 pm
No is my vote. The pain of doing the right thing is greater than kicking the can down the road or continuing to ignore the problem.

Comment by plutocrat03 Wednesday, Oct 9, 13 @ 12:42 pm
No, nothing will happen until sometime in January of 2015. At that point, there will be several lame ducks. No one is going to want to touch this issue right now, especially heading into primary time.

Comment by East Central Illinois Wednesday, Oct 9, 13 @ 12:49 pm
Nope. Trying to figure out how the incentive structure could possibly be aligned to make it a “win” for enough players. Can’t come up with it. Would welcome some contrary opinions!

Comment by Ray del Camino Wednesday, Oct 9, 13 @ 12:50 pm
No. And the biggest reason is that no one in that body truly knows what to do, or how to achieve pension reform. I admit that I certainly don’t know myself what should be done. All the answers are just horrible.

Comment by Responsa Wednesday, Oct 9, 13 @ 12:56 pm
Good news about the suits!

Comment by Murph Wednesday, Oct 9, 13 @ 12:56 pm
No.

I expect the GA to wait for the ISC ruling on the health insurance and take their cue from that. As I said the other day, even with a favorable ruling for the retirees, that could drag out i court for another year or so, which puts it in line with - East Central Illinois -’s prediction of January 2015.

If something called “pension reform” does get passed before 2015, I look for it in the regular session and for it to be coupled with a change / extension of the temp Income tax … because, regardless of pension changes, keeping the current tax revenue has to happen.

Comment by RNUG Wednesday, Oct 9, 13 @ 12:58 pm
Votes no, but it really depends on how long it takes the supremes to smack Quinn around the block a time or two.

Comment by McLean Farmboy Wednesday, Oct 9, 13 @ 12:58 pm
No, but actually voted only after I read the other comments. Everybody is just as pessimistic as I am. East Central probably hit the nail on the head-will take a lame-duck session to get anything done.

Comment by downstate commissioner Wednesday, Oct 9, 13 @ 1:00 pm
No. Quinn’s Item Veto still stings. Many will not want to make it appear that he was the mover and shaker on the vote. (Remember the Madigan quote that the Gov needs to find the votes.)

Also, a vote during the veto session would require a super-majority to become effective any earlier than next June. Per above and because of the pressure from anti-pension reduction folks, that will be hard to come by.

This is not to mention monkey-wrenches that Republicans may throw in the process.

Comment by Norseman Wednesday, Oct 9, 13 @ 1:03 pm
No, unfortunately. I think Madigan’s repeated insistance that Quinn find the necessary votes is serious, and thus dooms this to failure. If Madigan isn’t pushing the roll call, there is little chance Quinn will be able to find more than a handful of D votes. And as others have pointed out, the Rs don’t seem to think voting for pension reform is in their best political interests at the moment.

I hope I’m wrong though. I hope the conference committee puts forward a bill that can pass and make some progress toward erasing the unfunded liability that is slowly destroying the state budget.

But hope is not a plan.

Comment by 47th Ward Wednesday, Oct 9, 13 @ 1:04 pm
No. Unlike the Federal Reserve the Illinois General Assembly cannot produce money out of thin air and it has already spent the money that should have gone into the pension funds.(It has no CLUE)

Comment by anonymouse Wednesday, Oct 9, 13 @ 1:06 pm
“Pension reform” is a red herring for careless budgeting. True pension reform would be budgeting for, and making, pension payments just like we have to budget for, and make, bond payments. Both are obligations.

Comment by Anonymous Wednesday, Oct 9, 13 @ 1:06 pm
47th Ward @ 1:04 pm:

You can’t legally erase the unfunded liability … which is why the GA is having such a problem with it.

There are only two choices: refinance it (change the ramp or bond it out) or just pay it. Both will require additional revenue (tax increases).

Comment by RNUG Wednesday, Oct 9, 13 @ 1:12 pm
I think not, but if something is going to be passed, i would prefer it get done before the next regular session because of the effective dates. Something passed now will have an effective date next summer, which would give me time to decide whether I would be better off getting out. Something passed in the regular session (with probably about 1 hour of warning), could be effective right away and trap me in the new system.

Comment by SIUPROF Wednesday, Oct 9, 13 @ 1:14 pm
I voted no. I think the CC proposal will emerge and be discussed, but no vote this fall. Perhaps maybe in April or May.

Comment by Siriusly Wednesday, Oct 9, 13 @ 1:16 pm
Unfortunately I agree with everything 47 said above. No.

Comment by Chicago Cynic Wednesday, Oct 9, 13 @ 1:18 pm
No doubt about it, this won’t happen until January 2015…after the elections.

Comment by Ed Observer Wednesday, Oct 9, 13 @ 1:18 pm
No, not until Jan 2015 for the same reasons given by East Central Illinois. Neither chamber wants to go through with this until after the election. Lame duck session will give the Gen Assembly the cover.

Comment by Nearly Normal Wednesday, Oct 9, 13 @ 1:21 pm
===Both will require additional revenue (tax increases).===

RNUG, it was a poor word choice on my part. I meant “erase” in the sense of funding the unfunded liability and I recognize you’re are much more in the know on the details and I certainly respect your opinion.

However, tax increases are not the only option. 2404, in my mind, struck a good balance in the sense that employees agreed to contribute more and compounded COLAs were addressed. Yes, the ultimate solution is more money. The tricky part is deciding who pays, and how much. Taxpayers will pay more, but others are likely to share in the pain, including current employees and retirees. The courts may rule in favor of the employee/retiree side, and I’d give that ouotcome a 50-50 chance. In that case, I think you’ll see a stronger push to pass the cost shift so that additional taxing bodies and other entities pick up some of these costs to get it off the state’s balance sheet.

And I don’t consider making the temporary tax increase permanent a new increase, but obviously there are plenty of others who would (and will) disagree with that.

Comment by 47th Ward Wednesday, Oct 9, 13 @ 1:29 pm
Why would the Repubs vote to implement a controversial change in the status quo right before an election year. To help out the Dems and especially Pat Quinn’s campaign ads? And all that money Quinn claims pension reform will liberate–liberate for which parts of the state. Republican areas? Ha. A bird in the hand. Pensioners do contribute economically, they spend those checks. But where will the lost cola money go?

Comment by Cassandra Wednesday, Oct 9, 13 @ 1:31 pm
No, because SB 2404 is the only thing that can — and should — pass, but one person opposes it.

Comment by Reality Check Wednesday, Oct 9, 13 @ 1:35 pm
In May of 2015 the Dems will be able to pass something and have a Republican governor to blame.

Comment by N'ville Wednesday, Oct 9, 13 @ 1:37 pm
I may be naive but I think the term “pension reform” is toxic for both sides. Is it possible for the committee to resolve that future legislation that results in savings or additional revenue have those monies go towards pension funds until those funds are predicted to be 80 percent funded? That way they can work on real issues, and in the background, pension funding is being addressed.

Comment by Casual observer Wednesday, Oct 9, 13 @ 1:41 pm
I voted no. In the fall veto session some Republican help is needed to pass any bill and I cannot see it being available whatever the bill looks like.

In addition, the true solution to the pension issue will probably call for a tax increase of some type or a decrease in non pension spending of some type or maybe even both of these methods. With next year being an election year I doubt that many members of the GA would want to be too closely associated with either of these two positions so close to an election.

Comment by Hit or Miss Wednesday, Oct 9, 13 @ 1:44 pm
Madigan doesn’t want reform. Quinn would probably veto anyway.

Comment by Bear Wednesday, Oct 9, 13 @ 1:45 pm
I voted NO. Madigan will still insist on his plan. But there are still enough senators and representative left who respect the Illinois Constitution. And at best, the Conference Committee’s reported offerings are only less-conconstitutional than Madigan’s plan.

Comment by Joe M Wednesday, Oct 9, 13 @ 1:48 pm
47th Ward has made the case - MJM says Quinn has to get out the vote. That means MJM is called this Quinn’s to lose. I suppose it is possible MJM will get in there, too, depending on what the committee comes out with. If it doesn’t look like his plan - it’s toast. Hard to imagine that Quinn will push the plan either, unless it looks like MJM’s plan. Dead Bill Walking.

Comment by dupage dan Wednesday, Oct 9, 13 @ 1:49 pm
No, Madigan must think a Republican Governor will get elected and Republicans will get to take some heat and share the blame. Madigan always worked with Republican Governors.
The Democratic legislators are dopes.

Comment by Downstater Wednesday, Oct 9, 13 @ 1:52 pm
–No, Madigan must think a Republican Governor will get elected and Republicans will get to take some heat and share the blame.–

So Madigan doesn’t want to put heat on Pat Quinn? I doubt that. Madigan’s plan is the most severe one on the table. The heat doesn’t seem to bother him.

Comment by wordslinger Wednesday, Oct 9, 13 @ 1:57 pm
Republicans on a statewide ticket in the conference committee.

The April surprise provided a budgetary relief valve that won’t really exist next Spring, which then didn’t pit discretionary cuts against pension reform. That probably won’t happen this May.

Comment by Waffle Fries Wednesday, Oct 9, 13 @ 1:59 pm
My answer to this is “LOL!”

Comment by mm Wednesday, Oct 9, 13 @ 2:15 pm
It’s like you always say, Rich.

Bet on nothing.

Comment by Dave Dahl Wednesday, Oct 9, 13 @ 2:25 pm
Not until we elect a tall treasure will this problem be solved.

Comment by Golly Gee I'm Tall Wednesday, Oct 9, 13 @ 2:28 pm
47th,

I’m just guessing like most of the people here; I could be way off base. But you have to assume the players involved are rational and will be guided by a number of things, including self-interest and political realities like election schedules.

I don’t doubt that something reducing the current pension benefits will eventually be passed; what is unknown is when and exactly what. I see the health insurance case as being key; a win for the retirees severely limits the GA’s options while a win for the State opens the door to a “choice” bill like Cullerton’s various proposals. Such a “choice” bill would still have to overcome a number of contract law hurdles including being (under current rumors) both coerced and unilateral.

Comment by RNUG Wednesday, Oct 9, 13 @ 2:30 pm
No. “Reform” is a newspeak term for not paying the bills that have been incurred. If the state would just pay its bills, no need for “reform”.

Comment by RetiredStateEmployee Wednesday, Oct 9, 13 @ 2:31 pm
Someday the pension issue will be a crisis. To the ILGA, that day is not today. Or tomorrow.

Comment by otoh Wednesday, Oct 9, 13 @ 2:39 pm
Why should we believe that they’ll accept responsibility for addressing this issue now when they’ve evaded it for years?

Comment by Buster Wednesday, Oct 9, 13 @ 2:41 pm
No…there is still no consensus and don’t expect to see one that will get the votes.

Comment by D P Gumby Wednesday, Oct 9, 13 @ 2:52 pm
Forgot the other reason it won’t happen this fall. At least right now, no one is in the mood to give Pat Quinn a win …

Comment by RNUG Wednesday, Oct 9, 13 @ 2:54 pm
No, not enough time for something this big.

Comment by Steve Wednesday, Oct 9, 13 @ 3:04 pm
No way. Why should anything suddenly change now. I’ll believe it when its signed into law.

Comment by Amuzing Myself Wednesday, Oct 9, 13 @ 3:08 pm
No. Pension reform has the horrible combination of

(1) not enough legislators want to vote for it
(2) Madigan doesn’t want to push his team to vote for it
(3) Republicans don’t really want to pass it so they can run against Quinn/Dems failure to pass it
(4) The kiss of death: Gov. Quinn really wants something passed.

Comment by Robert the Bruce Wednesday, Oct 9, 13 @ 3:27 pm
Simple. No. It’s Illinois, isn’t it?

Comment by sal-says Wednesday, Oct 9, 13 @ 3:32 pm
I’m not expecting pension reform to be enacted until next year’s lame-duck session.

Comment by Innocent Bystander Wednesday, Oct 9, 13 @ 3:38 pm
No. The governor seems to be the only one who really, really wants it (whatever “it” may be, he hasn’t said), but he doesn’t have any pull with the legislative leaders and no coattails to assist anyone who might want to vote for reform without the support of his or her leader.

Comment by Anon. Wednesday, Oct 9, 13 @ 3:43 pm
I’m guessing no pension bill passes both houses until January 2015 — after the election, when legislators are “safer” (and can count on votes of lame ducks) and when a Republican could be coming into the governor’s chair. And it will not be as bold as the big business and anti-tax types wants.

Comment by Diogenes in DuPage Wednesday, Oct 9, 13 @ 3:44 pm
Voted No… there needs to be a financial stucture reform not a pension reform. I suggest taxing retirement checks instead of a pension reform because pensions are protected by the state Constitution. The state retirees’ pension fund is not the only fund in trouble - the state cannot pay their other bills either!

Comment by Mama Wednesday, Oct 9, 13 @ 3:45 pm
I think little chance in veto session where a supermajority is required. Maybe in a special session in January depending on where the leadership. Not in the spring session in an election year. Lame duck session in January ‘15 might be about right.

Comment by jake Wednesday, Oct 9, 13 @ 3:50 pm
If all these lame duck predictions come true, there will be a long list of Quinn hostages.

Comment by Norseman Wednesday, Oct 9, 13 @ 3:54 pm
yes - because nothing gets done until the last minute, and this Veto Session is the last moment before having to implement the full pension COLA as of January 1st.

The Speaker can legislate miracles when he wants to or needs to. Right now, he needs to.

Comment by Capitol View Wednesday, Oct 9, 13 @ 4:03 pm
No—why buck their on-going trend?
I wanted to say Yes since that is what I wish they would do but I know they have have their own interests at heart. So, in all honesty, I read about 10 of the comments before I voted.

Comment by Belle Wednesday, Oct 9, 13 @ 4:13 pm
Hmmmmmmmmm–again I say hmmmmmmmmmm…just can’t say on this one, after all of the hagglin’ over recent months…YEARS, really. So, sorry, just WAY too much still up in the air on it, so…just ain’t votin’ on today’s “Question,” although GOOD QUESTion, GREAT even!

Comment by Just The Way It Is One Wednesday, Oct 9, 13 @ 4:41 pm
This is the former Realist. Someone posted last week under the nick “Realist” about concealed carry (or some other gun issue), and it wasn’t me, and it didn’t represent me at all, so I’m changing my nickname. This is a permanent change, not sock puppetry.

No. Quack limp quack limp quack limp.

Comment by PolPal56 Wednesday, Oct 9, 13 @ 4:43 pm
Capitol View @ 4:03 pm:

The upcoming year’s COLA won’t make a difference, urgency-wise. All those unfunded debt projections already include the assumption of a 3% AAI. Also, the AAI come sout of the pension funds, not GRF, so it has no direct effect on the rest of the FY budget.

Comment by RNUG Wednesday, Oct 9, 13 @ 4:54 pm
Hi Rich.
I think we should take ALL of the SUITS to the cleaners!

Bill

Comment by WC Place Wednesday, Oct 9, 13 @ 5:18 pm
In my opinion a state pension bill will be passed after the election in November 2014. This pension bill will include tax increases, benefit reductions, and a restructuring of the Illinois pension debt.

Comment by Ruby Wednesday, Oct 9, 13 @ 5:46 pm
Yes.

The CC will actually produce a proposal, and MJM will join TC in moving from their original positions.

The only hold up then will, ironically, be on the Republican side. It might be to the GOPers’ political advantage to prevent pension “reform” right now, but they’ve been calling for it for years, and one day soon they will have to walk the talk.

Comment by walkinfool Wednesday, Oct 9, 13 @ 5:52 pm
It seems that there are still some politicians that are a bit bothered by the idea of passing bills that violate the constitution, not to mention contractual obligations, and perhaps even old fashioned moral standards.

That should be something to be encouraged, not criticized, unless we desire a politicians that follows only the demands of big business donors like the Koch brothers.

Comment by cod Wednesday, Oct 9, 13 @ 5:53 pm
RNUG, I haven’t mentioned this to many people (you’ll understand why) but i think they effectively could erase it. The idea had been floating around in my head in sort of amorphous form for some time. What really caused it to crystallize was the suggestion that Obama could solve the debt crisis last time with a”platinum Coin”. So here goes.

Deem the unfunded liability paid to the systems and immediately “invested” in the state by the systems as some sort of uncallable note at the systems’ assumed rate of return (currently 7.75-8%). There would obviously have to be some well thought out and fairly iron-clad legislation adopted codifying this and raising the pension interest payments to the same priority level as GO bond payments (maybe higher?). And the result would be….

The systems have a bedrock anchor investment that always performs, never underperforms, and

The state owes the systems annually a payment equal to normal cost (declining) plus interest, the cost of which would be an ever-declining percent of state revenues.

Bingo! It’s done.

Now you see what I meant above?

Comment by steve schnorf Wednesday, Oct 9, 13 @ 6:13 pm
No white smoke yet from the Conference Conclave, and I don’t expect one anytime soon. Right now I’m really wondering where the adults are both in Washington and Springfield. Too much hangs on whose ego is going to get bruised, and that hinders the type of focus pension legislation demands. This is trust fund accounting a far different animal than normal budgeting and budget projections. Some of the conferees know that, but not enough. Oh yeah…I voted “no”.

Comment by Commonsense in Illinois Wednesday, Oct 9, 13 @ 6:44 pm
steve schnorf,

I see. I’d heard of the platinum coin “plan”.

But at it’s heart, it’s just one more re-fi scheme … but this one moves debt “off the books” and makes it an “investment”.

Comment by RNUG Wednesday, Oct 9, 13 @ 6:55 pm
Steve,

The more I think about it, it is just a variation of the SSA buying US Savings Bonds, only the State is doing it retroactively in one swoop.

The good thing is the State would be actually acknowledging the monies owed to the pension funds.

There would be several downsides. The most obvious one, which you imply, is the need for (additional) revenue to pay the interest, but not really much different than today in terms of current / future revenue needs if the ramp was reset. The less obvious one is it would need even more safeguards that you identify. The “investment instrument” would also need to be non-salable and non-transferable; otherwise, I have this vision of the State selling it off for a short-term cash infusion … and ending up right back in the same mess again. Another problem would be selling it politically; I can’t see the Civic Club types sitting still for elevating the pension “interest” to a level equal or ahead of GO bonds.

Comment by RNUG Wednesday, Oct 9, 13 @ 7:33 pm
I don’t see how it can be resolved without leadership and integrity, and both are in very short supply in Springfield…and Washington

Comment by cynical retiree Wednesday, Oct 9, 13 @ 7:52 pm
No, but it may pass in spring 2014 as a component of formulating the budget for FY15. The D’s are going to have to put something up for a vote before the election. This would be late enough so that if it passes then the final court decisions will come after the election, which will allow the D’s to claim during the campaign that their pension reforms permit most of the income tax increase to expire (not that this is necessarily true). It may pass because it will be awfully tough for the R’s to vote against pension changes. The R’s will be between a rock and a hard place, given that voting to pass pension reform provides a big win to the D’s and given that voting against it gives D opponents an excellent campaign point to use against R’s.

Comment by east central Wednesday, Oct 9, 13 @ 8:18 pm
re myself @ 7:33PM

Technically, I probably should have said US Treasury notes instead of Savings Bonds … but I’m sure you got the intent / meaning.

Comment by RNUG Wednesday, Oct 9, 13 @ 9:36 pm
Schnorf, that is a brilliant and reasonable concept. Too brilliant and reasonable to be considered, lol.

I’m afraid the Civvies, the Tribbies, and much of the Democratic and Republican leadership in the state are much too invested in the “Scary Big Number” p.r. campaign that has been going on for years.

Their goal isn’t a sober and workable plan to fund promised obligations, but to scare the pants off of enough citizens that they’ll be willing to go along with hosing their neighbors.

Obviously, Ty and Big Brain Bruce are the men to head up that job.

Like the man said, never let the anxiety and fear produced by an economic crash go to waste when you can use it as a distraction to lift the other guy’s wallet.

I don’t see the GA voluntarily tying themselves down through law on pensions the same way that the bond markets have required them to do.

But I really don’t see the Supremes — whether state or federal — buying the “police powers” argument to break contracts, either.

Perhaps if the GA had demonstrated a good-faith commitment over the decades to properly fund pensions, that might get a listen. But the track record has been sketchy since the 1940s.

Comment by wordslinger Wednesday, Oct 9, 13 @ 10:32 pm
Esp since anything they pass will be litigated and may lose even after half of them take the tough vote.

Comment by Harry Wednesday, Oct 9, 13 @ 11:28 pm
Two words: Reverse Mortgage

Comment by Jack Handy Wednesday, Oct 9, 13 @ 11:52 pm
Were I any of the legislative leaders, after the hapless Pat Quinn cut all my members checks? Ain’t happening.
We all know who runs Illinois, and its not Pat.
And its high time to drive home that point.

Comment by Madison Thursday, Oct 10, 13 @ 12:04 am
Steve,

Did the State already use the “Invest in Illinois” slogan? If not, it would be a catchy phrase to sell your idea.

Comment by RNUG Thursday, Oct 10, 13 @ 8:42 am

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