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Today’s number: 7 years

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* Kurt Erickson on the governor’s idea to pass a constitutional amendment to fix the pension issue…

On Monday, Rauner spokeswoman Catherine Kelly declined to answer whether the governor or his staff is preparing to introduce a proposed constitutional amendment. The spring legislative session is scheduled to end in 20 days.

“He will continue to work with the Legislature to find a commonsense, bipartisan solution that will help put the state back on sound financial footing,” Kelly said.

If a constitutional amendment did make it through the process, legal experts say any changes could be appealed in the federal court system, which could rule that reducing pension benefits violates the U.S. Constitution.

In other words, a final answer on Rauner’s proposal could be several years away.

“Even if everything went right, you would be talking five, six, seven years,” John Colombo, interim dean of the University of Illinois College of Law, told Reuters.

It’s fine if the governor wants to propose a constitutional amendment. Let’s see it.

But we also need an immediate fix, which I discussed with subscribers yesterday. The Rauner plan might not be implemented until he’s out of office, for crying out loud.

* One thing is certain, however. The hyperbolic goofballs who swore up and down that the last pension reform plan was absolutely constitutional and demanded immediate action need to either admit they were wrong from the beginning or be cut out of this new process.

Also, too, remember how the aforementioned goofballs dismissed as unworkable Senate President John Cullerton’s “Plan B” amendment which would’ve been attached to the pension reform bill in case that one was declared unconstitutional? Yeah, well, if Cullerton had been listened to, then maybe we wouldn’t be in this freaking mess today. Or maybe not, but at the very least Cullerton should be given a much more influential seat at the table.

Our pension reform policy is being driven far too much by screamers instead of thinkers. That needs to change.

posted by Rich Miller
Tuesday, May 12, 15 @ 8:52 am

Comments

Well, why wasn’t the Cullerton plan attached to the pension reform bill? Who made the decision?

Comment by Apocalypse Now Tuesday, May 12, 15 @ 8:58 am
By the time they implement a workable solution, most of the Tier 1 employees will already be collecting pensions.

Comment by Anonymous Tuesday, May 12, 15 @ 9:01 am
Not getting why you are so enamoured of Cullerton. The only person who thought his plan was constitutional was Cullerton himself. Just because it cut less than SB1 didn’t mean it wasn’t an unconstitutional diminishment. And that Supreme Court footnote to me seems to be saying to Cullerton and his ilk to stop spinning the myth that dressing up a cut as “consideration” can fly if it does not actually provide an additional benefit. Only an egotistical fool would construe that language as ratifying his pension theft schemes.

Comment by Cold Tuesday, May 12, 15 @ 9:01 am
===On Monday, Rauner spokeswoman Catherine Kelly declined to answer whether the governor or his staff is preparing to introduce a proposed constitutional amendment. The spring legislative session is scheduled to end in 20 days.

“He will continue to work with the Legislature to find a commonsense, bipartisan solution that will help put the state back on sound financial footing,” Kelly said.===

Translation?

“We got nuthin’…”

Hey “ck”, that RTW stuff will be bipartisan, I bet Thursday can’t come soon enough. Dopes.

To the Post,

It’s about FY2016 right now. It’s about the $6.6 billion hole right now. It’s about recognizing May 31st is coming, and anything that can’t be implemented to help get a budget passed isn’t helping.

Sonny wanted leverage. Think of finding monies in the ballpark of nearly $7 billion as leverage to you. Do your job, Governor, you’re going to own these Rauner Cuts and the Rauner budget, so give it a think.

Don’t worry, Sonny, “ck” will sell your phony baloney in the meantime.

Comment by Oswego Willy Tuesday, May 12, 15 @ 9:02 am
“we are all engines of misbelief”
— David Dunning, We Are All Confident Idiots http://www.psmag.com/health-and-behavior/confident-idiots-92793

Walter Mondale (in his first debate with President Ronald Reagan, October 7, 1984, in Louisville, Kentucky) attributes the joke to Will Rogers when he says of Mr. Reagan that “it’s not what he doesn’t know that bothers me, it’s what he knows for sure just ain’t so.”
BRIEFING; What Folks Don’t Know http://www.nytimes.com/1984/10/18/us/briefing-what-folks-don-t-know.html

Comment by zonz Tuesday, May 12, 15 @ 9:04 am
Tier II already reduces benefits prospectively. Re-amortize the pension debt with an ability for the retirement systems to use the courts to compel payment by the State

Comment by anon. Tuesday, May 12, 15 @ 9:07 am
Rauner is a transparency gov. Willy can see right through him.

Comment by Norseman Tuesday, May 12, 15 @ 9:08 am
It seems you all want to “shoot the messenger”. Where were you all for the last 10-20 years as this mess was starting and continuing. We are here because of that. The last guy had this great Pension Plan, we see where that went. Now that we have someone who is actually trying to bring the state back to a place where we can and want to live, all I see is don’t touch my grant, pension, or anything that effects me. Tax the rich and the businesses. You also want everything to be discussed in the open no private meetings to get things started, well that is not going to get anything accomplished. Let a process start and we have elected reps to vote on an agreement if there is one. You all want to break it before if gets going.

Comment by The messenger Tuesday, May 12, 15 @ 9:14 am
The problem with an immediate fix is that the powers that be are focused on bleeding current employees. There will be continuing litigation involving any proposal to do that.

If they followed Rich’s suggestion, they’d bring in Fortner as well. He’s been trying to craft a reasonable fix.

Comment by Norseman Tuesday, May 12, 15 @ 9:20 am
“He will continue to work with the Legislature to find a commonsense, bipartisan solution that will help put the state back on sound financial footing,”

If the Governor offered to sign a 5% income tax and we would achieve a commonsense bi-partisan solution that would indeed put the state back on a sound financial footing.

See, this governing stuff should be easy-peasy.

Comment by Bill White Tuesday, May 12, 15 @ 9:20 am
The messenger- is that you, ck?

Comment by Roadiepig Tuesday, May 12, 15 @ 9:21 am
Dan Biss is not a screamer. He is a thinker - and arguably the smartest person in the entire General Assembly (other than Rep. Fortner). As a Republican, I will readily admit that I admire Senator Biss a great deal. If he can put aside his aspirations and political pride, he could be the one to fix this within the constraints of the court’s ruling and suggested paths.

Comment by Team Sleep Tuesday, May 12, 15 @ 9:22 am
===It seems you all want to “shoot the messenger”. Where were you all for the last 10-20 years as this mess was starting and continuing.===

You must be new to the Blog…

===Now that we have someone who is actually trying to bring the state back to a place where we can and want to live, all I see is don’t touch my grant, pension, or anything that effects me.===

Rauner implimented $26 million in cuts, the Rauner Cuts, hiding them on Good Friday, a massacre seen as going back on his word to Speaker Madigan, then retiring the funding, when the heat, and the double-cross, backfired.

Now… you’re up to speed on “…someone who is actually trying to bring the state back to a place where we can and want to live…”

===You also want everything to be discussed in the open no private meetings to get things started, well that is not going to get anything accomplished.===

Public hearings never lead to policy or actual legislation or budgets in government? Embarrassingly pathetic.

===You all want to break it before if gets going.===

There’s nothing to break or discuss, stop or impede, even help or assist.

I’ll help you finish this on the right foot;

“Get off my lawn!”

Dope.

Comment by Oswego Willy Tuesday, May 12, 15 @ 9:22 am
http://teacherpoetmusicianglenbrown.blogspot.com/2015/01/trs-tier-ii-members-are-paying-entire.html

Tier 2 pays for t 1 within 20 years and the state contributions will drop to zero

Comment by Illinois Manufacturer Tuesday, May 12, 15 @ 9:23 am
Offer existing employees cash to move to tier 2 voluntarily, increase Tier 1 contributions by 2% (which increased under Blago, there’s precedent), reamortize the debt and lower the target funding level (unless you think everyone will retire the same day), raise income taxes back to where they were last year, and move on to the many other challenges the state has.

Or, alternatively, scream loudly, pass unconstitutional reforms, and waste time arguing over how many angels could dance on the head of a pin.

Comment by AC Tuesday, May 12, 15 @ 9:24 am
Messenger,

Do you even read what you write before hitting submit? In one breath you say “where were you” and the next you seem to advocate for secret meetings. Pension holidays are the direct result of years of the top dogs meeting in secret, coming to an agreement and cramming it down the throats of members. So be careful what you wish for, sir.

As for the pensions, all people are asking it to be paid what they’re owed…….nothing more, nothing less. This is a basic right of civilized society.

As for the grants, sure there’s screaming about cuts. These programs have strong advocates or they’d never have been funded in the first place. Almost every program has an advocate that thinks their program is the top priority. It’s unreasonable to expect people not to advocate for their life’s passion.

Comment by Get a Job! Tuesday, May 12, 15 @ 9:24 am
After the ruling on pensions and health care, they have options they don’t like: restructure debt, negotiate with unions on increased health care payments and increased pension payments for current workers, cut spending, generate more revenue with some type of tax. They ask for it and they got it. Time to move along to something realistic.

Comment by The Colossus of Roads Tuesday, May 12, 15 @ 9:28 am
Well we have “pension experts” Nekritz and Biss ….Oh……………

Comment by Illinois Manufacturer Tuesday, May 12, 15 @ 9:30 am
So, Tier 2 was implemented in 2011, and seven years from now will be 2022. How much are we going to save even if this is ultimately approved, which is highly unlikely, in 2022 when the population of tier 1 employees will be rapidly dwindling, and those who are still around won’t have too many “future” earnings left to curtail? So, my question: Why bother with such an unjust, divisive measure?

Accept the ruling of the Supreme Court, pay your bills, and move on to actually governing the state well…for once.

Comment by PublicServant Tuesday, May 12, 15 @ 9:32 am
The fix is easy. Tax all retirement income over $25 K, raise income tax to 5 %, increase EE contribution by 4%. Problem solved.

Comment by Anon Tuesday, May 12, 15 @ 9:33 am
Go ahead and propose an amendment. But you have to walk and chew gum at the same time. It’s past time for the governor to get beyond his prospective dorm-room ideological agenda and get involved in the issues of the here-and-now.

Due to the rollback of the income tax, which the governor wanted and campaigned on, there’s a $6.2 billion hole in the FY16 budget. He told us during the campaign that he could handle that. But up to now, the governor has shirked his
Constitutional duty to propose a balanced budget.

Actual governing may not be as fun as tilting at windmills, but Rauner wanted the gig and it’s time that he got down to it.

Comment by Wordslinger Tuesday, May 12, 15 @ 9:33 am
Has gov raunhartt introduced, or made public, a bill on ANY of his pet initiatives? When are we going to stop pretending secret working groups are going to do the goverors homework? Dems dont want it to succeed. Neither does the gov. He wants to be able to blame the GA, cut and slash, and shut it down. Crisis = leverage

Comment by Langhorne Tuesday, May 12, 15 @ 9:34 am
Er, Bill White. We had a 5% tax rate under Quinn and the pensions are still a mess. It’s frustrating that previous legislatures shirked their responsibility to properly fund the pensions. Actually, it’s indefensible. Yet here we are. Re-instituting 5% would be something. But the Democrats never called the bill when they had the chance before Rauner was sworn in. Even if Rauner would sign it, the amount generated isn’t enough. And the constitution allows only a flat tax, so going after a millionaire’s tax is a pipe dream for now. So, does the flat tax have to go up to 10% or more to cover the pension crisis? What would be the economic impact of that. Do any of the public sector unions have any other ideas?

Comment by phocion Tuesday, May 12, 15 @ 9:35 am
@ Get a Job…..”Pension holidays are the direct result of years of the top dogs meeting in secret, coming to an agreement and cramming it down the throats of members. So be careful what you wish for, sir.”

Secret meetings of Madigan, that is who got us here.

Comment by The messenger Tuesday, May 12, 15 @ 9:38 am
===We had a 5% tax rate under Quinn and the pensions are still a mess===

Oy.

The pensions were a manageable mess under the old rate. They are now an unmanageable mess.

Comment by Rich Miller Tuesday, May 12, 15 @ 9:39 am
Anon - Requiring the employees to pay an additional 4% of salary for the same benefit will likely be considered a diminishment.

Comment by Bluefish Tuesday, May 12, 15 @ 9:41 am
The fix is easy. Tax all retirement income over $25 K, raise income tax to 5 %, increase EE contribution by 4%. Problem solved. =
United Van lines and other moving companies will love this. Taxing retirement benefits will send a number of people packing and moving to another state. For many, the tax free retirement income is the only thing keeping them here.

Comment by Apocalypse Now Tuesday, May 12, 15 @ 9:41 am
(Sigh)

===Er, Bill White. We had a 5% tax rate under Quinn and the pensions are still a mess.===

But Quinn made the payments. Keep that in mind.

===It’s frustrating that previous legislatures shirked their responsibility to properly fund the pensions. Actually, it’s indefensible. Yet here we are.===

Agreed, but remember, Quinn, he made the payments.

===But the Democrats never called the bill when they had the chance before Rauner was sworn in. Even if Rauner would sign it, the amount generated isn’t enough. ===

Rauner, personally, publicly, asked the sitting GA, both chambers, both parties, not to bring back the 5%. It was in all the papers…

Otherwise, some good questions, but Unions aren’t the elected Governor, or the sitting General Assembly.

Ask those who can do first, before attacking the Unions for not having solutions…

Comment by Oswego Willy Tuesday, May 12, 15 @ 9:41 am
How come the unfunded went up from 80 billion in 2009 to 105 billion in 2014? Does not sound very manageable

Comment by Lucky Pierre Tuesday, May 12, 15 @ 9:42 am
===The pensions were a manageable mess under the old rate. They are now an unmanageable mess.===

Double Oy.

The pensions were and are manageable. The 5% income tax allowed us to manage our state debt mess, which, due to the tax sunset is now an unmanageable debt mess. There. Fixed it for ya.

Comment by PublicServant Tuesday, May 12, 15 @ 9:42 am
@messenger, listen to Bill White, Get a Job, and Willy.

See, the problem with all these people you admire who are trying to “bring the state back” is that their go-to solution is always to balance the books on the backs of the middle-class (the people who have little left to give) and destitute (the people with nothing)–all the while demanding ever-greater tax breaks and other benefits for themselves (in the case of the wealthy and businesses), or somehow seeking to avoid responsibility for years of mismanagement (in the case of lawmakers).

That being the case, how can you blame workers for saying “don’t touch my pension”? Pensioners are the only ones in this little drama who haven’t consistently breached, or attempted to breach, their social and contractual obligations–they’ve been doing their jobs and making their contributions all along.

Also, what’s wrong with businesses and the extremely wealthy paying more? They used to, back in the great days of yore, when Illinois and America were strong–but for the past 30-40 years, they’ve been whittling down their contributions to society and transferring their obligations over to everyone else.

Nope. “Shared sacrifice,” like charity, begins at home–and those who have more to share (but have been hiding it under the cushions, or wherever) need to start sharing again. Until then, please, no more dim sermons implying middle-class pensioners are somehow “selfish” for not just throwing themselves on the sword.

Phocion: the state was making its pension payments and paying its bills after the tax hike. Also, Rauner insisted they roll back the increase. He’s also responsible.

Comment by Crispy Tuesday, May 12, 15 @ 9:43 am
@ Oswego Willy…

Thank you , you just proved my point.. “Shoot the Messenger”,

Then lets get nasty….

There’s nothing to break or discuss, stop or impede, even help or assist. ( Are you kidding me) State is in GREAT SHAPE, so many people love it here, are moving here. Tell me that last positive statement someone made about the Tate of Illinois.

I’ll help you finish this on the right foot;

“Get off my lawn!”

I’ll help you little , open your eyes and see what is happening.

Comment by The messenger Tuesday, May 12, 15 @ 9:43 am
==Do any of the public sector unions have any other ideas?==

The We Are One coalition of unions negotiated a compromise bill, but that was rejected. Good thing the Rauner administration has fostered such a spirit of cooperation, I’m sure he’ll be able to get a deal worked out with them soon. To the unions it looks like 100 years and 5 months of corruption.

Comment by AC Tuesday, May 12, 15 @ 9:43 am
=== went up from 80 billion in 2009 to 105 billion in 2014===

COGFA explained it in February. Try the Google. The ramp is a major factor, along with investment losses (you do know what happened in 2008-9 right?), projected lower rates of return, etc.

The unfunded liability issue is a red herring. It’s gonna continue going up before it eventually goes down under current, valid state law. Look at the total ramp, not just today.

Comment by Rich Miller Tuesday, May 12, 15 @ 9:45 am
To be a bi-partisan solution, the Governor needs to sign the 5% income tax and the IL GOP needs to refrain from campaigning on the issue.

Do that and yes - - we can start digging ourselves out of the mess we are in.

Comment by Bill White Tuesday, May 12, 15 @ 9:49 am
===I’ll help you little , open your eyes and see what is happening.===

lol, you are a Dope.

Nothing is happening.

BTW, when the message is so utterly ignorant to governing, you deserve the mocking you bring upon yourself.

===State is in GREAT SHAPE, so many people love it here, are moving here. Tell me that last positive statement someone made about the Tate of Illinois.===

This isn’t the Tribune.

Make a point, back it up, and the “Chicken Little” … fact… is about as pertinent as your dopey “messenger” blather.

Comment by Oswego Willy Tuesday, May 12, 15 @ 9:49 am
***It seems you all want to “shoot the messenger”. ***

The “messengers” have done a good job “shooting” themselves. They are among those who are pushing against legal pension reform and raising taxes to pay our bills. They are responsible also because they didn’t warn us for years that we had inadequate revenue.

They deserve a good share of the blame.

Comment by Grandson of Man Tuesday, May 12, 15 @ 9:50 am
Wow Rich I am sure you knew who you were calling goofballs besides the Tribune editorial board, there is a long list and one eats regularly at Saputo’s.

Comment by Rod Tuesday, May 12, 15 @ 9:50 am
Seven Years? Who will deal with this after the first four years? Surely, we won’t be stupid enough to reelect Rauner?

Comment by Big Mike Tuesday, May 12, 15 @ 9:53 am
“Taxing retirement benefits will send a number of people packing and moving to another state. For many, the tax free retirement income is the only thing keeping them here.”

I keep seeing this assertion. Is there any non-anecdotal evidence for it? (A Google search returned a mare’s nest of second-hand anecdotes and dubious investment advice.)

– MrJM

Comment by MrJM Tuesday, May 12, 15 @ 9:59 am
@Apocalypse Now, most people don’t even know Illinois has a flat income tax let alone that retirement isn’t taxed. And anyway, people will leave when there are 40 kids in a classroom, roads in utter disrepair, limited public transportation, no human services, 3 day waits in line to get a drivers licence, and ERs turning away people with broken bones.

Comment by From the 'Dale to HP Tuesday, May 12, 15 @ 9:59 am
==The last guy had this great Pension Plan, we see where that went.==

And the new guy’s plan is “Do the same thing, only more.” So how is that going to go?

==Now that we have someone who is actually trying to bring the state back to a place where we can and want to live==

I can and want to live here now. I’m less enamored of living in a state that complains about how much prison guards and cooks are paid, though.

==all I see is don’t touch my grant, pension, or anything that effects me==

Of course, because people can’t and don’t to live in a state that attacks their livelihoods.

==You also want everything to be discussed in the open no private meetings to get things started, well that is not going to get anything accomplished.==

I’m not convinced that anything that has to “get accomplished” in secret is worth doing.

Comment by Arsenal Tuesday, May 12, 15 @ 10:01 am
Cullerton plan is clearly a dimishment, especially after Minerva ruling. None of the options are without peril. We Are One Coalition could not go with that plan now!

Comment by Analyst Tuesday, May 12, 15 @ 10:01 am
The so-called pension experts haven’t gotten it right, so try some new experts. Since new hires are now tier 2 and retirees are dying off, theoretically, if the state pays the normal cost and some of the unfunded liability (not trying to achieve 100% funded or 80%, but maybe 50-60%)the liability should correct itself over time). I’d like to hear from RNUG et.al. why some lesser funded legislation won’t work.

Comment by Soccertease Tuesday, May 12, 15 @ 10:02 am
Anyone still want to defend Rauner’s budget proposal which calls for $2.2B in saves for this pension change, starting July 1 this year? Kelly?

Captain Obvious

Comment by walker Tuesday, May 12, 15 @ 10:02 am
All the doomsday “crisis” self-serving hand wringing didn’t persuade the Illinois Supreme Court that the 5th wealthiest state in the union couldn’t possibly pay its pensions. Or that “shared sacrifice” meAnt anything other than a general tax. Game over. And those who think any Union would agree to any cuts in light of that opinion are delusional. The party is over and everyone has to pay up.

Comment by Cold Tuesday, May 12, 15 @ 10:04 am
“Surely, we won’t be stupid enough to reelect Rauner?”

But some “we” re-elected Blago!

Comment by very old soil Tuesday, May 12, 15 @ 10:04 am
Seven years in Illinois the turnaround agenda will be ready for a presidential run

Comment by Anonymous Tuesday, May 12, 15 @ 10:14 am
- The Messenger -,

===. Let’s raise the income tax to 50% for the wealthy, anyone who makes more than 100K. Lets give more grants to anyone who asks for it. Lets increase spending also since we just taxed the rich and have more $$$$ to spend. Then lets say we don’t have to fund the pensions this year because we will do it next year because we have so much money.===

Argue like an adult, you’ll be seen as an adult.

These are not adult rationales

Comment by Oswego Willy Tuesday, May 12, 15 @ 10:15 am
No one is shooting anyone. No one is beating up anyone. The messenger GOT ELECTED. Problem was, the messenger thought that is all he has had to do since he took office - keep reading us his damn message!

Broadcasting a warning that is not really news, but spinning it to sound as though you have a solution to the problem you are broadcasting - then failing to have any solutions, is just flat-out fraud. That is what we have right now with this new administration.

Would you go to a doctor who tells you that you need to saw off your leg because you have toe nail fungus? He is the messenger? He told you that you have toe fungus? Doesn’t that give him the authority to tell you how to fix it?

Well Governor Quack-Quack want us to fix our problems by ignoring our constitution, our tax laws, our union laws, our contract laws and our Illinois culture. AND you are willing to do that because he can’t figure out how to address our problems as governor within our laws?

Why would you allow ANY governor that kind of power? We have a Supreme Court telling us not only that the last pension bill was unconstitutional, they even gave Governor Goner a list of suggestions! What’s next? A “How To Be A Governor Within Illinois Laws” COLORING BOOK?

If you are a conservative like me, you have to stop supporting a governor who believes that ringing a fire bell gives him the right to tell everyone to stop fighting the fire like we always do and let the fire burn everything up. Rauner’s solutions are not accepted - not because of politics - but because they are recognize by both parties as RECKLESS and DANGEROUS.

No problem is so bad that we need to flush our how damn state down a sewer to fix it!

Comment by VanillaMan Tuesday, May 12, 15 @ 10:20 am
@The messenger When you come to this blog with simplistic solutions to complex issues and begin to spout ideological talking points, expect to get challenged, corrected, and, yes, somtimes ridiculed for a lack of any evidence of support for your contentions. If you don’t like that, go away. In fact, no one will miss you. Have a nice life!

Comment by PublicServant Tuesday, May 12, 15 @ 10:21 am
You want public sector unions to come up with answer? Easy. Pay what you owe. There, did it. People are having a hard time right now because the only answer is they are going to have to pay the bill. Tough using those credit cards and then trying to pay them on due date.

Comment by sparky791 Tuesday, May 12, 15 @ 10:23 am
No I will not run and hide. I find it to enjoyable reading all of your views and opinions. You all seem to forget that it was Quinn who signed the Pension Bill, not Rauner. Now that someone is “Ringing the Fire Bell”, he is deemed to be reckless and Dangerous. I say that the state was in control by people who were Reckless and Dangerous.

Comment by The messenger Tuesday, May 12, 15 @ 10:26 am
that’s right messenger, bruce isn’t paying you to run and hide. stay and fight the bad fight!

Comment by Homer J. Quinn Tuesday, May 12, 15 @ 10:30 am
No one forgot it was Quinn who signed it. No one forgot that Cullerton was the only one who said it was unconstitutional.

Pointing at the spilled milk, then suggesting…

===. Let’s raise the income tax to 50% for the wealthy, anyone who makes more than 100K. Lets give more grants to anyone who asks for it. Lets increase spending also since we just taxed the rich and have more $$$$ to spend. Then lets say we don’t have to fund the pensions this year because we will do it next year because we have so much money.===

… leaves me confused as to what message you are thinkjbg you are enlightening us with?

Comment by Oswego Willy Tuesday, May 12, 15 @ 10:31 am
One of the more perversely entertaining aspects of reading this blog is the high correlation between those who advocate public employees taking a 30 to 40 percent hit on their pensions and those who scream at the idea of a 3.5 to 5 percent tax on their own retirement income. As a public employee I am ok with paying that tax as long as everyone else does as well. The debate needs to shift towards what is a fair and reasonable tax policy and not just how can we screw public employees.

Comment by Cold Tuesday, May 12, 15 @ 10:32 am
I’m going to start off with the obvious.

California was in more or less the same shape as Illinois a few years ago. They cut some spending, reformed their pension system with the equivalent of Tier 2 for new hires, and passed a PERMANENT income tax increase. Illinois about the same time cut some spending, implemented Tier 2 for new hires, and passed a TEMPORARY increase that recently expired. California is in decent shape today; Illinois isn’t.

The results speak for themselves.

Comment by RNUG Tuesday, May 12, 15 @ 10:36 am
==You all seem to forget that it was Quinn who signed the Pension Bill, not Rauner.==

Not, really, it’s just that Rauner hasn’t proposed anything that will Constitutionally get us out of the mess.

You seem to be arguing that since Pat Quinn was bad, everything Bruce Rauner proposes must be accepted without criticism. Not how it works.

Comment by Arsenal Tuesday, May 12, 15 @ 10:39 am
Quinnochio, is that you? Are you working as a Messenger now?

Comment by Anonymous Tuesday, May 12, 15 @ 10:42 am
Cold is absolutely correct. No negotiator in a right mind will bargain for any reduction in benefits when the ISC has made it so clear that any reductions are unconstitutional. That being said, there is a constitutional way to get money out of retirees and that is by taxing our pensions. I fervently believe this will be considered seriously before a budget is passed. The unfortunate part for the state budget however is this will not raise billions but rather a few hundred million - not nearly enough to plug the hole. So next we go to restoring the 5% income tax with the plea “the Supreme Court made us do it.” Probably next will be taxes on services. When the pols in Springfield finally get the point that ex post facto cuts are not allowed - revenue has got to be the answer. We have lived in this state for years by a fiction that a 3% income tax was enough. The states with pension funds in good shape all share a common factor - higher income taxes than IL.

Comment by drbill Tuesday, May 12, 15 @ 10:42 am
==Now that someone is “Ringing the Fire Bell”==

Yeah. The fire bell hasn’t been rung before. Nobody ever said a word about the state’s finances until Governor Rauner came along. Are you thinking before you speak?

Comment by Demoralized Tuesday, May 12, 15 @ 10:43 am
And I agree with Rich about screamers–starting with the Civic Committee and the Trib, they have sowed discord and anti-worker bile for a decade, making it hard to come to agreement on anything constructive.

Comment by Harry Tuesday, May 12, 15 @ 10:45 am
The lawmakers need to quit trying to negate the pension debt.

Anything that would be valid consideration to get employees to change tiers would probably result in only minor savings because (a) the State will have to give up something of value to get employees to take the deal and (b) only some of the employees will take the deal. At best, you might be able to shave 4% - 10% off the existing debt. Small return for major effort.

It’s time to talk new revenue (taxes). The only question is who gets taxed. The broadest based tax today is the income tax, so start there. Close all the corporate loop holes. Then close some of the individual loop holes. Say goodbye to the property tax exemption, start taxing retirement income above a certain level. If you want to keep those income tax exemptions, raise it back up to 5%. Then expand the sales tax to services. As the service sales tax phases in, start to phase the income tax back down a bit.

Comment by RNUG Tuesday, May 12, 15 @ 10:45 am
==Now that someone is “Ringing the Fire Bell”==

And cutting the fire hose, while pouring kerosene on the fire…

Comment by PublicServant Tuesday, May 12, 15 @ 10:46 am
=== Then expand the sales tax to services. As the service sales tax phases in, start to phase the income tax back down a bit.===

I was with you until you began to advocate for more regressive tax expansion RNUG, but I think the point is, your suggested fixes are within the realm of the doable. We could, therefore, negotiate in the open, preferably over a beer or two.

Comment by PublicServant Tuesday, May 12, 15 @ 10:49 am
People keep talking about putting a constitutional amendment on the ballot. According to the state constitution, the General Assembly are the only people who can place a pension amendment on the ballot. It’s not certain to get past the General Assembly - 71 votes and 36 votes in the chambers.

SB1 was not easy to pass. It took 3 years to get it through after the 2011 Second tier bill passed. After all the wrangling and the 2012 election, they finally got the right language together to put SB1 on the board to get the votes needed to pass. Madigan/Durkin got 62 on SB1. They needs 9 more in the House for a constitutional amendment. Cullerton/Radogno got 30 on SB1. They need 6 more in the Senate for a constitutional amendment.

I’m not saying a constitutional amendment won’t happen. I’m saying it’s harder than people seem to think it is to get the votes needed to place the amendment on the ballot. It’s not a certainty that the General Assembly will put it on the ballot.

Comment by john Tuesday, May 12, 15 @ 10:53 am
Are Nekritz and Biss on one of Rauner’s secret committees related to pensions?

Comment by forwhatitsworth Tuesday, May 12, 15 @ 10:58 am
Good luck on the voluntary move.. My dad worked for an outfit that tried that, almost no one took advantage of it.

Comment by OneMan Tuesday, May 12, 15 @ 11:02 am
@ 9:23 am:
http://teacherpoetmusicianglenbrown.blogspot.com/2015/01/trs-tier-ii-members-are-paying-entire.html

Tier 2 pays for t 1 within 20 years and the state contributions will drop to zero
………………………………………

As you can see in the above link, the IL state pensions have already been reformed.

It is called Tier II.

The simple truth is that for many years the IL General Assembly spent the state’s pension contribution to pay for other state expenses.

Would they now reduce retired state workers pensions, so they can use that money to pay the state’s bills and continue to keep state income taxes low? That would be a callous solution, but fortunately most lawmakers are not that heartless.

Comment by Enviro Tuesday, May 12, 15 @ 11:03 am
Since the latest Illinois Supreme Court ruling was so clear and absolute, isn’t it about time to accept that reality and start having reasonable discussions about moving forward with revenue solutions? How much time, money, and energy are being wasted on discussions, finger-pointing and actions that seem to be so vindictive in nature?

Comment by forwhatitsworth Tuesday, May 12, 15 @ 11:09 am
The talk of reforming pensions appears not to be that there isn’t enough revenue coming in to pay for these retirement plans, but rather there seems to be a hidden agenda….. that public retirees get too much. Because if revenue was a problem, thinking people would understand that they’ve been living artificially on the backs of “diverted” (aka stolen) money that rightfully should have gone to the pension funds. And then they’d understand that rightfully they need to pay back. We all don’t expect everyone to pay for our lunch, do we? Cheaters do. Why anyone would expect pensioners and public workers to take a hit when they’ve already taken a hit is beyond me. Which brings me to the belief that it is punishment for some incorrect, misinformed idea that ALL pensions are lavish. Want to see lavish? Don’t look at state employees, teachers. Look at judges, legislators if big numbers impress. This is about vindictive punishment because state employees (in all 5 funds) have already been victimized.I get that people don’t want to hear that because then the focus is on their greed and selfishness. But it’s the truth.

Comment by AnonymousOne Tuesday, May 12, 15 @ 11:13 am
=== We have a Supreme Court telling us not only that the last pension bill was unconstitutional, they even gave Governor Goner a list of suggestions! What’s next? A “How To Be A Governor Within Illinois Laws” COLORING BOOK? ===

Hilarious.

As I said yesterday, lots of people still working through the five stages of loss and grief right now, atleast publicly.

Let’s hope that some time within the next several weeks they pull their heads out of the sand, drop the schtick, and get down to business.

A declaration that you are going to solve this with a Constitutional amendment is a declaration of defeat, of intellectual bankruptcy.

Likewise the idea you can fix the state’s finances by simply firing every public employee.

And for the love of Pete, Tribune editorial board: a little less finger-pointing, a little more time looking in the mirror, asking yourself what you might have done or said differently over the past five years that might have made things turn out differently.

Comment by Juvenal Tuesday, May 12, 15 @ 11:14 am
Here is the problem with any common sense approaches to the pension plan. It won’t result in a “win” for Rauner on a national stage, so he won’t go for it.
Know the man and know the plan.
BVR isn’t operating on any sort of conventional wisdom because that’s all based on someone who knows politics. Rauner isn’t a politician. He’s a CEO. Go from that perspective and you’ll better be able to figure out his next move.

Comment by CharlieKratos Tuesday, May 12, 15 @ 11:15 am
yes as they should be
see Rich’s piece in Crain’s

================- forwhatitsworth - Tuesday, May 12, 15 @ 10:58 am:

Are Nekritz and Biss on one of Rauner’s secret committees related to pensions?================

Comment by zonz Tuesday, May 12, 15 @ 11:19 am
@The messenger: == You all want to break it before if gets going. ==

If something is broken coming out of the chute, it’s best that someone point it out as soon as possible so as to save time, energy, and money later on.

I have to ask, who on our newcomer governor’s staff is telling our newcomer governor how to govern at this point? Because I got a bad feeling heads are going when the light bulb goes on over his head and he looks around and says, “why didn’t you tell me?”

Comment by Cheswick Tuesday, May 12, 15 @ 11:23 am
When you hear anyone talking about pension reform, you know that they do not understand the issues. There are no significant problems with the pension system. If fact, Tier 2 may have gone too far if at some point in the future employers (and employees) have to start paying Social Security. Additionally, the Supreme Court has definitively said there is no more room for “pension reform,” Tier 2 accomplished what was permitted. Amend the Constitution and you still have to deal with contract law.

We need to start talking about debt reform because that is the issue.

Comment by Retiree Tuesday, May 12, 15 @ 11:32 am
@Retiree–this. “Pension reform” has become an ideological euphemism, like “right to work.” Thank you.

Comment by Crispy Tuesday, May 12, 15 @ 11:38 am
==The fix is easy. Tax all retirement income over $25 K==

Would this violate the constitutional amendment on the flat tax?

Comment by whetstone Tuesday, May 12, 15 @ 11:43 am
Nekritz and Biss made the media rounds assuring listeners that SB1 would be legal; now the Illinois Supreme Court has ruled it unconstitutional. The fact that those two are now assigned to the newly formed “Pension Reform” Committee means that said committee truly lacks any credibility.

Comment by Buzzie Tuesday, May 12, 15 @ 11:44 am
It is over: “Based on the facts already of record and the matters of which we can take judicial notice, it is manifest that the State could not, as a matter of law, clear the threshold imposed under contemporary contract clause jurisprudence.”

Comment by Liberty Tuesday, May 12, 15 @ 11:48 am
The problem IMHO with the pension debate is we seem focused solely on walking away from the obligation and the promise. It would be nice if somone actually discussed solutions to fix it. The truth is the pension payments and system is not broken over all, unsupportable or unsustainable. The problem has always been the state not making the employer sode of the controbution. Again, defined benefit plans outperform 401ks. If you do a 401k there are two pieces to know. First, the employer has to make its kick in for their share. But if the state can obligate itself to do this for the defined benefit plan without any change. Second, the state changed the pension already, tier 2. So again the issue is making good on the obligation. No one is calling for the legislature to default i. Its bonds and put the money into the pebsions instead. So why do we hold no state workers as debtors who get paid, but want to break the promise with employees.

A side note. It appears fees earned by investment grps are much higher on 401ks the. On defined benefit plans. So technically the gaovenors agneda would increase the profits to his business interests. 401k lower retuns then defined benefits and higher fees to the investment grp who gets a fee from wvery single member. I suspect the govenor could care lees about pensions and is more interested in chnageing the system to the higher fee 401k model which will enrich him and his contributors.

Comment by Ghost Tuesday, May 12, 15 @ 11:53 am
- PublicServant -

Yep, all legal. Didn’t say they were necessarily fair.

One I didn’t toss in but thought about was eliminate all exemptions on the personal income tax, change it to exempt the first $50,000 per individual regardless of source (in other words, tax income, retirement, US Savings Bonds, everything) and then set the rate between 5% and 10% as needed to fund the State. That would eliminate the regressiveness of adding the service tax.

Comment by RNUG Tuesday, May 12, 15 @ 11:59 am
Rnug not just exemptions, but tax credits should be elmi ated as well for people over say 250k income.

Comment by Ghost Tuesday, May 12, 15 @ 12:02 pm
=-= Where were you all for the last 10-20 years as this mess was starting and continuing. ==

- The messenger –

You must be new here. The unions filed suit as early as 1974, which resulted in the 1975 IFT^ v Lindberg decision that the state could fund the pensions any way they wanted to … which is what led to the current situation.

Comment by RNUG Tuesday, May 12, 15 @ 12:03 pm
==============
- Buzzie - Tuesday, May 12, 15 @ 11:44 am:

Nekritz and Biss made the media rounds assuring listeners that SB1 would be legal; now the Illinois Supreme Court has ruled it unconstitutional. The fact that those two are now assigned to the newly formed “Pension Reform” Committee means that said committee truly lacks any credibility.==========

Most every legislator who takes on a thankless, no-win assignment and works hard to forge compromise is later vilified. Nekritz & Biss were assigned a task and worked hard and diligently.
They were also hamstrung.
They did not make up a legal argument for constitutionality out of crepe paper. The argument was out there.
Kanerva v. Weems last July foreshadowed the decision announced this past week. But ya don’t fold up your tent after so many months of agonizing work.

That you toss such a verbal grenade diminishes your credibility.

Comment by zonz Tuesday, May 12, 15 @ 12:03 pm
== Offer existing employees cash to move to tier 2 voluntarily, increase Tier 1 contributions by 2% (which increased under Blago, there’s precedent) ==

-AC-

You must be new here. That was not precedent, that was Blago reneging on the pension pickup for no raise deal that Schnorf came up with (which actually slightly improved the pension situation by holding down FInal Average Compensation a bit). All Blago did is restore the employee’s paying the employee portion.

Comment by RNUG Tuesday, May 12, 15 @ 12:04 pm
== Er, Bill White. We had a 5% tax rate under Quinn and the pensions are still a mess. ==

- phocion –

Actually, the pension payments were being made as scheduled by the 1995 “ramp” and the State’s backlog of bills was cut in half under Quinn. Things would have been more or less manageable if the 5% income tax rate were still in place.

Comment by RNUG Tuesday, May 12, 15 @ 12:06 pm
== Rnug not just exemptions, but tax credits should be eliminated as well for people over say 250k income. ==

Good point. But maybe the point tax credits go away should be the same $50,000 individual / $100,000 married income threshold I suggested. Let’s see if we can get the IL-1040 back to just one side of a page for everyone.

Comment by RNUG Tuesday, May 12, 15 @ 12:11 pm
Easy solution, 1st pass the millionaire tax, 2nd have the state employees pay from 4% to 8% now, 3rd the money must go into the pension system and each employee gets a pension statement along with their pay stub, 4th raise the income tax back up again and truely dedicate those funds to paying the bills off, 5th truely close corporate loopholes, 6th union pay freezes for the next four year contract, 7th laying off state employees with only add to the problem because employed individuals produces tax dollars and moves the economy forward, and the most important of them all to really save this state RECALL Rauner back to his rich entitled private life. Now this is a start to a turnaround plan that works for everyone.

Comment by Holy Smokes Tuesday, May 12, 15 @ 12:11 pm
Easy solution, 1st pass the millionaire tax, 2nd have the state employees pay from 4% to 8% now, 3rd the money must go into the pension system and each employee gets a pension statement along with their pay stub, 4th raise the income tax back up again and truely dedicate those funds to paying the bills off, 5th truely close corporate loopholes, 6th union pay freezes for the next four year contract, 7th laying off state employees with only add to the problem because employed individuals produces tax dollars and moves the economy forward, and the most important of them all to really save this state RECALL Rauner back to his rich entitled private life. Now this is a start to a turnaround plan that works for everyone.

Comment by Wait an Illinois Minute Tuesday, May 12, 15 @ 12:12 pm
You can say that again……wait, you did.

Comment by Get a Job! Tuesday, May 12, 15 @ 12:16 pm
SURS already requires 8% employee contribution.

Comment by Anonymous Tuesday, May 12, 15 @ 12:18 pm
That you toss such a verbal grenade diminishes your credibility.

I continually try to find something nice to think about Rep. Nekritz. I have met her in person, and she is a pleasant and knowledgeable legislator. Looking in from the outside, my biggest criticism is that, even given the “thankless, no-win” task she was given, her public pronouncements reflect a single-sided approach that was ultimately not successful, she kept on dishing out the PR even though the facts started to erode her case, and she seems somewhat bitter (understandably) that all her efforts were in vain. I wish her well on the committee that hopefully will have a better and constitutionally acceptable result.

Comment by Six Degrees of Separation Tuesday, May 12, 15 @ 12:22 pm
== 2nd have the state employees pay from 4% to 8% now ==

Unless the state employee gets some consideration for increasing their contribution, it won’t be legal. One-sided changes were taken off the table with the ISC ruling on SB-1.

Comment by RNUG Tuesday, May 12, 15 @ 12:23 pm
Let’s address these 1 by 1

1. Millionaire’s Tax - Likely not constitutional
2. Increase Employee contribution by 100% - Not constitutional
3. Employee contribution to pension system – This already happens
4. Raise income tax –Finally, something workable!
5. Corporate loopholes – as far as I am concerned, these are about like the waste/fraud that everyone points to…..they’re mostly a unicorn.
6. Union pay freeze – that’s reasonable & probably should happen…..but the real money is in the health insurance cost.
7. Layoff employees who “add to the problem” – I don’t even know what this means.
8. 8. Recall Rauner – “we” elected the guy & he is exactly who “we’ elected……why waste money on a recall that he’d likely win?

So only your income tax & union salary points are workable. All the rest is jusy fluff. Luckily, raising taxes & freezing salaries probably solves our short term problems.

Comment by Get a Job! Tuesday, May 12, 15 @ 12:24 pm
RNUG:

A helpful guide.

http://www.ioc.state.il.us/index.cfm/resources/reports/tax-expenditure/fy-2013/

The sales tax exemption for food and drugs is particularly expensive, but unlikely to go.

The Foreign dividend subtraction on the other hand….

Comment by Juvenal Tuesday, May 12, 15 @ 12:25 pm
An amendment to the Illnois Constitution deleting the pension clause doesn’t solve the problem as it cannot be applied retroactively. As our Supreme Court has affirmed, the pension clause vests state employees with a property right to the pension benefits that are in effect when they started working and any benefit enhancements that are granted during their employment. A constitutional amendment that changes that scenario would be a violation of the due process clause since it would deprive those employees of their vested property rights without due process. It is no different than passing a constitutional amendment that empowers the governor to seize your car because the state needs the money. When will Rauner accept the fact that he can’t fix the pension problem by unilaterally diminishing benefits.

Comment by tominchicago Tuesday, May 12, 15 @ 12:34 pm
- Juvenal -

Good find. Easier to read than some of the IDOR reports I’ve looked at in the past.

Comment by RNUG Tuesday, May 12, 15 @ 12:40 pm
One more suggestion if we start messing with the tax code. On the corporate income tax side, after we take away all the loop holes and credits, exempt the first $1M of profit. That way the small businesses, which tend to be the job generators, will get a break. Plus you just made it a lot easier to sell to everyone except the big boys that already have lobbyists to get tax breaks.

Comment by RNUG Tuesday, May 12, 15 @ 12:43 pm
So, I guess the question for us ordinary citizens is: how retroactive is our bipartisan income tax increase gonna be?

Comment by Cassandra Tuesday, May 12, 15 @ 12:46 pm
Get a Job:

The blanket exemption for retirement costs us around $1.1 billion a year.

Oddly, most folks have talked about only taxing retirement income over a certain threshold. Seems silly to me, and I am not convinced it is any more Constitutional than the Millionaire’s tax.

We should probably just follow the example of most other states and exempt Social Security from taxation, and make everything else fair game.

Comment by Juvenal Tuesday, May 12, 15 @ 12:49 pm
What do we need to do to stop all the talk about “Pension Reform”, the ISC’s May 8 decision has made it clear that reform without consideration that is accepted by each individual of the State’s pension systems is unconstitutional. Therefore, it is time for ALL to listen to the wisdom of fiscally secure individuals and institutions: pay the pensions, pay the bills already due and only if there is any money left over do you add new programs. Will we need to raise taxes? Probably. For all who complain, remember all the service you received for little or no tax payments because the cost to pay for those services came from what should have been pension contributions.
I’m also tired of the talk about having to divert money from education to pay pension contributions. WAKE UP PEOPLE! Our children are taught by individual who belong to the state pension systems. By paying the required pension contributions, the State is funding education because good teachers will be willing in to work here because they will have a secure retirement.
Now the rest of the State knows what the State employees have known for some time now: Learn how to do more with less.
Maybe if we could get Madigan, Cullerton and Rauner to learn that little lesson…..

Comment by Frank Ambrose Tuesday, May 12, 15 @ 12:50 pm
Six-
I cannot / would not quarrel with your post to me, but please consider these thoughts:
1) your “single-sided approach” comment is not accurate - - she evolved; and we must bear in mind that her primary task was fiscal - - and to be pursued without the benefit of the clear precedents of July 2014 and May 2015 that we now have

2) it is amazing to me how often our courts look at constitutional language and emphasize that rights are not absolute; and invoke a balancing process; here they take the opposite approach, which I believe is due to the history of the provision at issue

3) Nekritz is no ideologue, yet she is extremely pro-worker; she is a fine lawyer from an excellent law school, however, she wasn’t tasked to be the lawyer here; she was assigned to run “point” (along with Sen. Biss), tasked to find compromises and shore up support for the package that was achieved; I have no doubt she felt she was working to salvage the fiscally healthiest state gov’t possible under the circumstances - - while inflicting as little pain as possible on each affected population, but with no one going unscathed.

Now, we know better how our Sup Ct views the provision at issue, and I am confident Nekritz will work hard from that premise.

Comment by zonz Tuesday, May 12, 15 @ 1:02 pm
TRS employees pay 9.4%

Comment by AnonymousOne Tuesday, May 12, 15 @ 1:17 pm
=== I have no doubt she felt she was working to salvage the fiscally healthiest state gov’t possible under the circumstances===

That is likely true.

===while inflicting as little pain as possible on each affected population, but with no one going unscathed===

While the state did raise taxes (temporarily) to manage the debt they had rung up, the bill she fronted for went nowhere near properly balancing the load “among each affected population”. State employees paid the tax increase like everyone else, but unilaterally would have had to bear the burden of a 40% cut in their annuities. Taken in total, the financial hit taken by state employees was nowhere near the financial hit taken by non-state employees. Nekritz had to know that, but still supported and shilled for the bill. I was just following orders as a defense has been tried, and doesn’t cut it.

Comment by PublicServant Tuesday, May 12, 15 @ 1:17 pm
== We should probably just follow the example of most other states and exempt Social Security from taxation, and make everything else fair game. ==

Only problem with that is teachers and some state employees were not allowed by the State to participate in Social Security … which brings us to a potential “unequal treatment” claim. That’s why exempting a specific amount of retirement income would seem to be the safer approach.

Comment by RNUG Tuesday, May 12, 15 @ 1:17 pm
1. All state employees will earn 1.67% per year towards their final retirement percentage. (No more 2.5% for certain groups)
2. The average salary component to be used to compute the retirement amount will be based on base salary not including overtime and not to exceed $100,000.
3. No special rules for retiring early for the various state agencies. [For example, Rule of 85 for IDOT, (If age + years of service = 85, employee can retire with no penalty) IDOC has an even better deal that will work using 75]
4. Minimum retirement age without a penalty will be the same as that particular state employee’s full social security retirement age.

These state retirement deals are no doubt very good for the state employees, but are not available to the overwhelming majority of Illinois citizens who are employed in the private sector. Everyone would like to retire early (in their 50’s) with a good pension and health benefits, but who is going to pay for it?

Comment by Taxed Enough Tuesday, May 12, 15 @ 1:17 pm
== how retroactive is our bipartisan income tax increase gonna be? ==

I see two logical approaches

a) back to Jan 1 but that would either require higher withholding for the rest of the year or having people be irate come next April 15 when they have to pay

b) make it effective July 1 and figure out a method of borrowing enough to plug the remaining hole

Comment by RNUG Tuesday, May 12, 15 @ 1:20 pm
- Taxed Enough - Tuesday, May 12, 15 @ 1:17 pm:

If applied to existing employees, all of your proposals would change the existing terms of the pension contract … and the ISC just said that is not a choice.

Comment by RNUG Tuesday, May 12, 15 @ 1:23 pm
Taxed enough.

How does any of that square with Fridays ISC ruling?

Sorry but pie in the sky wishes won’t work.

Comment by Mason born Tuesday, May 12, 15 @ 1:24 pm
Zonz

Thanks for your insight and personal knowledge. I come from the perspective of someone who probably had a lot more to personally gain if SB1 had been found constitutional, but always had my doubts about it passing the ISC (PR spin to the contrary), and as a citizen, wanting to see the state fulfill its contractual obligations, and knowing that the alarm bells of 30 years fell on deaf Republican and Democratic ears.

Comment by Six Degrees of Separation Tuesday, May 12, 15 @ 1:27 pm
==but are not available to the overwhelming majority of Illinois citizens who are employed in the private sector==

That argument annoys the heck out of me. Why is that (or why must it be) the standard?

Comment by Demoralized Tuesday, May 12, 15 @ 1:35 pm
—
These state retirement deals are no doubt very good for the state employees, but are not available to the overwhelming majority of Illinois citizens who are employed in the private sector.
—

So what? It’s a public job not a private job. If private folks want the benefits, then get the public job. And vice versa.

Even the SC opinion admits that public sector workers accept less than their (so-called) private sector counterparts. If you accept less up front, you deserve more out back.

Plus, enough with the sour grapes. Public workers don’t get stock options. Okay — what, are public workers supposed to gripe about this? Public workers don’t get bonuses. Yeah, it’d be be nice — but what’s the first thing a private sector employee would say?

“Hey, Slick, if you want the bonuses, get a private sector job.”

Comment by Frenchie Mendoza Tuesday, May 12, 15 @ 1:38 pm
90% of the public don’t understand the rules of the Illinois pension system and how those employees can retire so early with 75-80% of their base salary plus overtime with full health benefits that bridge the time period until they are medicare eligible at age 65. Obviously, I put that info out there for the average Illinois taxpayer to see, especially when certain people are suggesting that we tax our citizens even more to pay for this pension plan that every Illinois citizen would like to have. In case you missed it in the news last month:

Illinois has the highest taxes in the nation.
37% higher than the national average.

Illinois has the 2nd highest real estate taxes in the nation.

Illinois lost 95,000 residents from state to state migration last year. This is the highest rate of population loss due to state to state migration in decades.

Comment by Taxed Enough Tuesday, May 12, 15 @ 1:41 pm
==Illinois has the 2nd highest real estate taxes in the nation.==

Knowing plenty of people living behind the cheddar curtain, I find this difficult to believe. Sales tax is the only tax that is higher in Illinois. Most people in Wisconsin pay higher, progressive income taxes, property tax rates are nearly identical, fees are similar.

Comment by AC Tuesday, May 12, 15 @ 1:49 pm
– Illinois has the highest taxes in the nation–

Not remotely true.

You’re throwing a lot of “facts” around there, could you kindly share the sources of your information?

Comment by Wordslinger Tuesday, May 12, 15 @ 2:04 pm
- PublicServant

I see your POV clearly
Remember Nekritz came to GA first as part of Team Jeff Schoenberg

In the world we live in, how do you look at things?

“I was assigned a task and did as best I could” … of course vulnerable to your rejection of “I was following orders”

…………….or…………….

“If you’re not part of the solution, you’re part of the problem”

Comment by zonz Tuesday, May 12, 15 @ 2:07 pm
Tax certain services - say advertizing revenues and legal fees!

Comment by anon. Tuesday, May 12, 15 @ 2:10 pm
Demoralized - The private sector employees, who are not paid by the taxpayers, are paying the state’s bills. That’s why they also deserve a “good” deal.

Frenchie - Not that it really matters as far as the pension mess goes, but IDOT has paid its ET’s, CE’s and TM’s bonuses in the past. I don’t know about other the state agencies.

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:11 pm
== how those employees can retire so early with 75-80% of their base salary plus overtime with full health benefits ==

You can’t retire early AND get the 75% - 80%. We’ll walk through it for you.

— First, the percentage of pension:

Unless you are talking the “life safety” 2.2% alternative formula (or the legislators and judges), very few state employees can retire with 75% - 80% benefits. Yes, some can retire in their mid-50’s but under the normal rules not at that level of benefit. I will concede the one-time exception to that was the 2002 ERI the State choose to offer which allowed an extra 5 years of service credit if PAID for by the employee.

Let’s walk it through for the typical SERS 1.67% formula employee. That employee probably went to college and got a BA, so they would have typically started with the State at age 24. Let’s say they retire at age 55 under the “Rule of 85″. They would have worked 31 years. 31 years plus age 55 = 86, so they would meet the rule. Now the pension is calculated as 1.67% * 31 (number of years worked) = 51.77%.

That’s quite a bit less than the 75% - 80% you are claiming.

Let’s work it the other way. Under SERS, the maximum benefit is 75%. Since you earn it at 1.67% per year, 75% / 1.67% per year = 44.91 years. If you start at age 24 and add 45 years to it, you have to be age 69 in order to get the maximum 75% benefit.

All this can be verified on in the handbook on the SERS website.

— Second, the overtime

It was salary that was earned and pension payment was withheld from that overtime. Don’t like it; hire enough people that overtime is not required.

— Third, premium free health insurance

This only applies to SERS members and some SURS members. It (currently) requires at least 20 years of service. For better or worse, it was offered by the state to retain employees since the salaries at the time were sub-par, so it is basically deferred compensation. It originally only required 8 years of service. Maybe you would change it, but the State put it in place for a reason.

Comment by RNUG Tuesday, May 12, 15 @ 2:11 pm
John Schmidt just posted a piece on the Trib website arguing that the City’s pension fix is constitutional. He claims there is consideration because the City has no obligation to fund the pension fund shortfalls, if any happen, under current law. Does anyone know if this is true?

Comment by Anonymous Tuesday, May 12, 15 @ 2:12 pm
==The private sector employees, who are not paid by the taxpayers, are paying the state’s bills.==

I think those public sector workers also pay the same taxes as the private sector workers. That argument is ridiculous.

==That’s why they also deserve a “good” deal.==

So go get it. Nothing is stopping you. I reject the notion that we have to bring people down.

Comment by Demoralized Tuesday, May 12, 15 @ 2:15 pm
===“If you’re not part of the solution, you’re part of the problem”===

Apparently “the solution”, didn’t address the problem, in fact it act made it worse, was a waste of time, and anyone with common sense, much less legal sense, knew that from the get-go. I get it zonz, you think Nekritz is phenomenal. I don’t

………..as either a legislator or a lawyer………..

And I won’t forget the attempt to renege on the state’s promise to me. Ever.

Comment by PublicServant Tuesday, May 12, 15 @ 2:22 pm
RNUG - IDOT highway maintainers, IDOC, etc earn 2.5%. IDOT HM starts work at age 22. Works till age 53.5. 31.5 years of service. 31.5 x 2.5% = 78.75% Age 53.5 + 31.5 years of service = 85 which meets the rule of 85. IDOT HM can retire at age 53.5 with 78.75% of final salary average and full medical benefits.

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:24 pm
==John Schmidt just posted a piece on the Trib website arguing that the City’s pension fix is constitutional. He claims there is consideration because the City has no obligation to fund the pension fund shortfalls, if any happen, under current law. Does anyone know if this is true?==

Only the Judge can determine if it is true, I think it is unlikely that it will be upheld.

Comment by Name/Nickname/Anon Tuesday, May 12, 15 @ 2:28 pm
==The private sector employees, who are not paid by the taxpayers, are paying the state’s bills.==

If private sector employees are working for an Illinois corporation that keeps their employees’ state income taxes instead of paying it to the state of Illinois*, then NO they are not paying the state’s bills.

*Economic Development For a Growing Economy Tax Credit Program (EDGE)
http://www.illinois.gov/dceo/expandrelocate/incentives/taxassistance/pages/edge.aspx

Comment by Enviro Tuesday, May 12, 15 @ 2:28 pm
So Enviro. You’re saying that the private sector employees don’t pay the state’s bills?

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:34 pm
Anon 2:12:

John Schmidt is in Stage Three of the three stages of grief and loss, “Bargaining.”

Trying to Bargain with the Supreme Court is not going to work.

Funding shortfalls in the pension system is not “consideration.”

What do employees gain?

Nothing.

Membership is a contract, with benefits guaranteed. No employee gained a dollar from the city’s action.

A promise was made of benefits when the person was hired. Actually keeping the promise is not an “additional benefit” as the court has laid out in its opinion.

This is all groundwork for a city-owned casino.

Comment by Juvenal Tuesday, May 12, 15 @ 2:34 pm
Demoralized - So your solution is that all citizens of Illinois go get a job with the state?

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:38 pm
I agree with tominchicago regarding why amending the Illinois Constitution will not work. After further thought, here is my take on it: the Constitution can be amended (if approved by 3/5 of the legislature and voters) to remove the pension protection clause. But presumably after that is enacted, a law would have to be passed that diminishes pension benefits for Tier 1 employees and/or retirees. This is the point at which the state would almost certainly run afoul of the contracts clause in the Illinois Constitution, because any employee who first became a member of a retirement system has a contract on the date employment commenced (I believe this is what the ISC just said), and the state cannot retroactively and unilaterally alter a contract that previously existed without that being, by definition, ex post facto.

So I think it is very likely that any pension cuts enacted after the pension protection clause is removed, for people employed prior to the Constitutional change taking effect, could be challenged under the contracts clause of the Illinois Constitution, not merely under the contracts clause of the US Constitution. The reason this may prove important is that if it is challenged under the Illinois Constitution, it will be decided by a future Illinois Supreme Court (probably similar in makeup to the current ISC), not the US Supreme Court.

Comment by Andy S. Tuesday, May 12, 15 @ 2:40 pm
The Schmidt op is laughable (hope that does not violate the civility code. Can I say specious?). It is black letter law that consideration for a contract modification cannot consist of something you were required to do anyway under the old contract. Like the City paying into the fund. And, really, the City can just let the fund dry up and then stiff everyone? That’s not what all the prior court cases seem to say. Forget the name but the case where the lawsuit was brought to compel funding and the Court said no, unless the fund was on the verge of insolvency. Also, the County Treasurer stipend case where the court ordered payment out of the general fund when the stipend fund was deliberately underfunded. See ya in court.

Comment by anon Tuesday, May 12, 15 @ 2:40 pm
==So your solution is that all citizens of Illinois go get a job with the state?==

Oh for pete’s sake. My solution is that if you don’t like your pension plan find another job with a better plan. Don’t whine about somebody else’s.

==You’re saying that the private sector employees don’t pay the state’s bills?==

Wasn’t it you who said that private sector employees paid the state’s bills? No mention of public sector employees in your statement.

Comment by Demoralized Tuesday, May 12, 15 @ 2:43 pm
Taxed Enough - The private sector employees, who are not paid by the taxpayers, are paying the state’s bills. That’s why they also deserve a “good” deal.
—————-
The private sector has received a “good deal” for years. All that money that was supposed to be put into the pensions by the State went for things enjoyed by all including the private sector, like roads and schools and lower taxes.

Comment by Wake Up! Tuesday, May 12, 15 @ 2:44 pm
IDOT maintainers are on an alternative formula. They (and others) were put there because of the danger involved in their work. You are taking their example and applying it statewide. You cannot do that.

Comment by Demoralized Tuesday, May 12, 15 @ 2:46 pm
= John Schmidt just posted a piece on the Trib website arguing that the City’s pension fix is constitutional. He claims there is consideration because the City has no obligation to fund the pension fund shortfalls, if any happen, under current law. Does anyone know if this is true? =

It’s true that the Trib printed it. The legal analysis is of the same quality as what the Trib has been peddling for years.

The ISC ruled that the pension benefits must be paid. That ruling left no wiggle room for local governments to renege on their obligations. The City’s pension fix will also fail, I predict also by a 7-0 decision.

Comment by cover Tuesday, May 12, 15 @ 2:50 pm
IDOC, State Police, Juvenile Justice also are at 2.5%. That represents a lot of employees. Also, don’t promote raising taxes to pay for it and people won’t compare the state pension to their own retirement scenario as much. The private sector has its share of dangerous jobs. One example - coal miners.

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:54 pm
==don’t promote raising taxes to pay for it==

It’s a debt the state is obligated to pay. How would you suggest they pay for it? Whether you like it or not that debt is not going away. It’s owed. You can whine that it isn’t fair all you want but it is what it is.

Comment by Demoralized Tuesday, May 12, 15 @ 2:58 pm
Wake Up - Tell that story to the average wage earner making that average $25,000 individual / $50,000 family income per year with often times no guaranteed monthly pension at the end of their working career.

Comment by Taxed Enough Tuesday, May 12, 15 @ 2:58 pm
AC & Wordslinger - WSIL TV 4-14-2015 broadcast.

Comment by Taxed Enough Tuesday, May 12, 15 @ 3:01 pm
Taxed Enough, why would somebody in Pennsylvania care about this topic?

Comment by Rich Miller Tuesday, May 12, 15 @ 3:02 pm
Taxed Enough

I think the Illinois Supreme Court just told every citizen in IL that it’s a debt that must be paid. Time to put on the big boy pants and figure out how to do it.

Comment by Mason born Tuesday, May 12, 15 @ 3:06 pm
- PublicServant

I said at 2:07 p.m. that I see your POV clearly.
After reading your response, I have an addendum:
===> you think I am biased or not objective regarding Nekritz
===> I think you are consumed by emotions, and thus are not objective regarding her approach & her work.

This back/forth should stop. You have my commitment.

Comment by zonz Tuesday, May 12, 15 @ 3:07 pm
TE, your statements on taxes are not correct. Google “local and state tax burdens” for the Tax Foundation report.

Comment by Wordslinger Tuesday, May 12, 15 @ 3:08 pm
@2:58 ==no guaranteed monthly pension at the end of their working career.==

It is called Social security and for only a 6.2% contribution (4.2% in 2011, 2012, and 2013) also includes a great Medicare health care plan.

Comment by Enviro Tuesday, May 12, 15 @ 3:08 pm
How would you suggest they pay for it?

I think there are things a tax-avoidant solution could do. Raise user fees and licenses (not a “tax” on the general population), sell or lease state assets, or raise money by getting a cut off of new businesses (either by general economic growth or targeted now markets like casinos, legal MJ, etc.). Whether it be enough to stave off a “general” tax increase is another question.

Comment by Six Degrees of Separation Tuesday, May 12, 15 @ 3:08 pm
===Whether it be enough to stave off a “general” tax increase is another question===

It ain’t.

Comment by Rich Miller Tuesday, May 12, 15 @ 3:10 pm
WSIL TV is located in Illinois.

Comment by Taxed Enough Tuesday, May 12, 15 @ 3:14 pm
For the city and local retirement systems with guarantee, who will pay when the system runs out of money? The local entity or the state?

The state sets the inadequate funding policy and benefits, the local entity hired the employees.

Comment by Name/Nickname/Anon Tuesday, May 12, 15 @ 3:14 pm
Yes, but your IP address is registered to a local PA internet company.

Comment by Rich Miller Tuesday, May 12, 15 @ 3:15 pm
Taxed Enough — you should know that highway maintainers are in the security formula, as correctional officers and state police. You can argue that they shouldn’t be — but on the job risks are well documented for them. As RNUG said, average professional staff don’t get anywhere near those percentages. Take it to the Teamsters.

Comment by kimocat Tuesday, May 12, 15 @ 3:29 pm
For the city and local retirement systems with guarantee, who will pay when the system runs out of money?

The Illinois Municipal Retirement Fund, which mot cities and counties use as their retirement vehicle, is in way better shape than the state’s 5 retirement funds. That is largely because they made the actuarially required payments each year, unlike the state. There are some issues with the muni’s who are paying into the fund with keeping up those actuarially required payements, which are due by law. But even if that fund started to be underfunded by the locals, IMRF retirees would probably have a few decades of being paid in full until the system reached critical mass.

Comment by Six Degrees of Separation Tuesday, May 12, 15 @ 3:36 pm
highway maintainers are in the security formula, as correctional officers and state police. You can argue that they shouldn’t be — but on the job risks are well documented for them.

And IIRC, the highway maintainers were taken out of that formula, and put back in the new “regular” Tier 2 formula that has less benefits that either of the Tier 1 formulas, for all who were hired from 2011 onward.

Comment by Six Degrees of Separation Tuesday, May 12, 15 @ 3:54 pm
Taxed Enough–Yes, you are right that those individiuals making 25K and families making 50K don’t need a higher tax burden. Maybe that is why the advisory referendum to tax millionaires passed with such flying colors. Maybe high income folks wouldn’t notice a few more percentages in their tax burden. But people like Rauner didn’t like when the public spoke so loudly. Apparently his types just tossed that whole idea out and want the tax increase to be on working people. That’s our government in this state.

Comment by AnonymousOne Tuesday, May 12, 15 @ 4:09 pm
===- zonz - Tuesday, May 12, 15 @ 3:07 pm:

- PublicServant

I said at 2:07 p.m. that I see your POV clearly.
After reading your response, I have an addendum:
===> you think I am biased or not objective regarding Nekritz
===> I think you are consumed by emotions, and thus are not objective regarding her approach & her work.

This back/forth should stop. You have my commitment.===

Zoning I’m sorry I wasn’t as clear as I should have been. The purpose of my comments wasn’t to allow you to see my POV, although I’m glad you understood that, but I really couldn’t care less if you did. My comments were intended to rebut your attempt to elevate the involvement of Nekritz in SB1 to that of a dutiful legislator just doing her job the best she could, and I don’t deny that she might have convinced herself that that was what she was doing, but I wanted to provide a counterpoint to that perspective.

I also admit, as is plainly obvious in my writing, that this is an issue close to my heart, as one would expect when an unjust law is passed that attempts to strike a death blow, a slow, lingering one, to my family’s financial future. Being emotional on this matter does not, however, preclude objectivity, just as a company that has provided state services, or a state bond holder, would expect to be paid even though, I’m sure they both fully understand that the state negligently put itself in a politically difficult position. While politically difficult, however, the state does have legal ways to pay their bills and support their programs. The ISC, has removed the option of diminishment, which, although the easy political solution, was far from legal as any competent lawyer would have known.

Lastly, if you’d like to continue to attempt a defense of Nekritz, fell free. I won’t attempt to silence you. Oh, and may your financial future never have to be subject to the whims of spineless, self-serving politicians, of which we have many, on both sides of the isle.

Comment by PublicServant Tuesday, May 12, 15 @ 5:51 pm
== RNUG - IDOT highway maintainers, IDOC, etc earn 2.5%. IDOT ==

Those are life / safety positions … which I exempted from my comments.

Comment by RNUG Tuesday, May 12, 15 @ 6:16 pm
== Forget the name but the case where the lawsuit was brought to compel funding and the Court said no, unless the fund was on the verge of insolvency. ==

The first one to make it to the ISC after the 1970 Pension Clause was IFT v Lindberg 1975. That ruling was later confirmed in a number of other ISC cases.

Comment by RNUG Tuesday, May 12, 15 @ 6:22 pm
==don’t promote raising taxes to pay for it==

You may not like it but, in a nutshell, that is what the ISC just said.

Comment by RNUG Tuesday, May 12, 15 @ 6:24 pm
== For the city and local retirement systems with guarantee, who will pay when the system runs out of money? ==

Presumably the local municipality …

Comment by RNUG Tuesday, May 12, 15 @ 6:26 pm
Bottom line is, this is what happens when the politicians make decisions based on what is less politically painful at the time to appease certain groups and kick the can down the road and let the next generation deal with the out of control chaos later. Illinois taxpayers are going to pay through the nose to clean up this mess and will continue to pay into the distant future if things aren’t put back into the real world like everyone else has to live in.

Comment by Taxed Enough Tuesday, May 12, 15 @ 7:26 pm
TE, bottom line, the Supremes just introduced a big bowl of real world to a bunch of pipe dreamers trying to get out of paying back borrowed money.

Lot of time has been wasted on their fantasies.

Comment by Wordslinger Tuesday, May 12, 15 @ 7:36 pm
Hasn’t the sky hit you yet there in Pennsylvania, TE?

Comment by PublicServant Tuesday, May 12, 15 @ 7:36 pm
TE: in 1994 the voters overwhelming chose to avoid a little discomfort in the form of the Netsch Plan, choosing instead to continue to spend without raising taxes, borrowing instead from the only ones foolish enough to lend them money: themselves.

For nearly two decades, we deposited IOUs into the pension funds of various sizes.

Now, those IOUs have come due.

It is time to stop blaming the politicians, the unions, the Democrats, and everyone but yourselves, voters. For 20 years, you enjoyed the lowest tax rate in the country, and now the bill has come due.

Thankfully, there are some structural changes we can make like reforming our prison sentencing laws, legalizing marijuana, and some others that will help ease the pain, if you so choose.

Comment by Yellow Dog Democrat Tuesday, May 12, 15 @ 8:45 pm
PublicServant, he’s probably another one of those Rauner plants from another state.

Comment by Norseman Tuesday, May 12, 15 @ 8:45 pm
Norsemen, no doubt a Rauner zealot, very likely paid. With all his money, you’d think he could enlist a shill with some original arguments as opposed to attempting to roll out the same old thoroughly rebutted right-wing talking points over and over again.

Comment by PublicServant Tuesday, May 12, 15 @ 9:07 pm
And Rich, when I use the word shill, I meant it in a descriptive sense. If these are truly your own unpaid right-wing talking points, TE, I apologize.

Comment by PublicServant Tuesday, May 12, 15 @ 9:10 pm
YD - The IOU’s were definitely a bad choice, but unfortunately the current plan is still too expensive and needs to change.

PSvt - First of all, what makes you think I’m a him? Second of all, save your criticism for the Illinois politicians. I’ll be impressed when the good ole Illinois politicians decide to take the bull by the horns and get their own house in order first and then talk taxes second. State agencies still have way too much fat. They are way too heavy in middle and upper management. They hire way too many consultants. CMS needs to be dismantled, etc.

Comment by Taxed Enough Tuesday, May 12, 15 @ 9:28 pm
== but unfortunately the current plan is still too expensive ==

Have you read the various studies, including one’s from people like Judy, that clearly state the problem is not overly generous benefits but the failure to fund the pensions on a consistent basis? It’s laid out in black and white in reports from all sides of the political spectrum. To quote Rich: use the google.

Had the pension holidays not been taken and the funding not been shorted, the current annual pension bill would be less than $2B instead of over $7B. That difference is this year’s “finance charge” from shorting the pension payments all those years. And the state is going to have to keep paying that “finance charge” until it is all paid back.

Comment by RNUG Tuesday, May 12, 15 @ 10:34 pm
TE, I’m sure that’s what you believe, and the order that you’d like to see things handled.

But then there’s reality.

If you have any specific, legal options that you’d like to provide Illinois legislators so that they might consider them, please do. Other than that, your talking points are old, vague, and have been rebutted many times before.

Comment by PublicServant Wednesday, May 13, 15 @ 7:00 am
Any steps to reduce payroll would reduce the future core liability.

Comment by Taxed Enough Wednesday, May 13, 15 @ 10:22 am

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