Latest Post | Last 10 Posts | Archives
Previous Post: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)
Next Post: Catholic Charities warns of disaster
Posted in:
* Follow it all right here with ScribbleLive…
posted by Rich Miller
Wednesday, Feb 17, 16 @ 8:19 am
Sorry, comments are closed at this time.
Previous Post: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)
Next Post: Catholic Charities warns of disaster
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
100 bucks says he forgets to to drop at least 3 Gs
Comment by Trolling Troll Wednesday, Feb 17, 16 @ 12:05 pm
the price of dried fruit is already too high!
Say NO to raisin taxes!!
Comment by Juvenal Wednesday, Feb 17, 16 @ 12:11 pm
TT, he didn’t drop one until about 5 minutes in and since then, the drops are kinda random.
Comment by Arthur Andersen Wednesday, Feb 17, 16 @ 12:14 pm
“Agree to help me bust unions or I will drive this bus right off the cliff…”
Comment by There is power in a union... Wednesday, Feb 17, 16 @ 12:17 pm
Please detail your structural reforms.
Comment by Mama Wednesday, Feb 17, 16 @ 12:17 pm
“These reforms will save billions/year.”
??????
Comment by crazybleedingheart Wednesday, Feb 17, 16 @ 12:19 pm
There’s that hoary GOP myth that Illinois can “grow” its way out of its budget crisis without a tax hike.
Comment by anon Wednesday, Feb 17, 16 @ 12:20 pm
Text of Governor’s speech–
http://www3.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=13470
Lackluster clapping by the R’s.
Comment by Nearly Normal Wednesday, Feb 17, 16 @ 12:21 pm
If you get a dollar for every g he drops we can also balance the budget
Comment by illinifan Wednesday, Feb 17, 16 @ 12:21 pm
Take a microscope to state spending.
No word about higher ed funding.
Comment by Nearly Normal Wednesday, Feb 17, 16 @ 12:23 pm
He wants total control?? Of the state finances?? Whoa!!
Comment by Trolling Troll Wednesday, Feb 17, 16 @ 12:24 pm
oh, his reforms COULD save hundreds of billions of dollars now. ooh good!
Comment by Johnny Pyle Driver Wednesday, Feb 17, 16 @ 12:24 pm
Here it comes. Let’s increase K-12 funding by 25% without revenue to pay for it (We’ll just skip some more pension payments).
Comment by BeenThereB4 Wednesday, Feb 17, 16 @ 12:25 pm
Here’s the full quote:
==Workers’ compensation reform and lawsuit reform. Mandate relief, consolidation, local control of bargaining and bidding to drive down property taxes. These reforms will provide many billions of dollars every year in government cost savings. ==
Whatever drug he’s on should be legalized.
Comment by crazybleedingheart Wednesday, Feb 17, 16 @ 12:25 pm
The Capitol has suddenly become a Hellmouth.
Comment by IllinoisBoi Wednesday, Feb 17, 16 @ 12:28 pm
All of a sudden Rauner cares about teachers. Didn’t he want rahm to break CTU?
Comment by There is power in a union... Wednesday, Feb 17, 16 @ 12:28 pm
Crazy bleeding.
Ha! I’ll need some of that after listening to this.
Comment by Trolling Troll Wednesday, Feb 17, 16 @ 12:30 pm
That was awful.
Comment by Boooooooo Wednesday, Feb 17, 16 @ 12:30 pm
“My hand is outstretched… to slap poor people…”
Comment by There is power in a union... Wednesday, Feb 17, 16 @ 12:31 pm
Forget the link I had earlier. It is the State of State Address not the Budget Address!! Sorry about that.
Comment by Nesrly Normal Wednesday, Feb 17, 16 @ 12:31 pm
“We must make the education of our children our top priority” -@GovRauner on education funding”
However, if your parents don’t have money to send you to college, he no longer cares about your education.
Comment by Mama Wednesday, Feb 17, 16 @ 12:32 pm
Here were my thoughts as he spoke …
Rauner is just like Obama … reasonable sounding language but his actions don’t follow his words. (sorry I’m showing my anti-Obama bias here)
Blaming everyone for past problems and unpaid bills that cost 12% interest. Ironic given his requesting the income tax being allowed to expire.
Attacking the effective 8% interest rate on pensions.
Building the case that a tax hike without cuts won’t solve the problem.
Rewriting the legislative history for the past year, blaming the D’s for everything.
Asking for authority to cut spending or agreeing to economic reform. Structuring it as a choice only by the GA.
Saying everyone in the chamber must compromise. That’s rich given Rauner’s instringence.
The old government efficiency line, selling Thompson Center, and new labor contract that saves $3B over 3 years. None of those are done deeds.
Lauding government workers; what a joke.
Opposed to arbitration, repeats $3B claim
Pushing Cullerton’s pension reform, $1B/year in 2018. Upset no bill has been introduced. Maybe that’s because they haven’t been able to come up with a constitutional reform plan?
Pushing Work Comp reform.
Keeps bringing up middle class workers, how he is fighting for them.
Wants tort reform, lower property taxes, work comp as business friendly reforms.
Trotted out the national average growth claim that has been debunked.
There was the “expand the tax base” statement.
Don’t have to have every TA item IN THEIR CURRENT FORM THIS YEAR (key weasel words there).
Responsible, compassionate budget … another joke of a line.
Sounds like he will go cuts only if he doesn’t get the reforms; wants sole responsibility to cut everything but early childhood and K-12 funding. Why would they trust him with that?
One thing he won’t back down on increasing education funding. Be interesting to see if said bill is actually “CLEAN”.
$75M more for Early Childhood. $393 total for the program.
Fully funding General School State Aid foundation level and eliminate any pro-ration. Noted CPS special funding deal. Said can’t take away from one district to help another. Education is his top priority.
Tip of the hat to the social safety net. Another ironic statement.
Summary: Short on detail. YET ANOTHER CAMPAIGN SPEECH; Rauner sounds reasonable but he probably doesn’t think the words mean the same as a normal person would
Comment by RNUG Wednesday, Feb 17, 16 @ 12:33 pm
Passed out by budget speech show republicans when to applaud….amazing.
Comment by West winger Wednesday, Feb 17, 16 @ 12:36 pm
Don’t worry folks, just pass the reforms and the benefits will trickle down! /s
So that was a waste of time. Will he actually submit a budget? With real numbers based on real data? I am moving.
Comment by burbanite Wednesday, Feb 17, 16 @ 12:37 pm
Text is on the Reboot Illinois website–
http://www.rebootillinois.com/2016/02/17/editors-picks/rebootil/the-full-text-of-gov-rauners-second-budget-speech/53032/
Comment by Nearly Normal Wednesday, Feb 17, 16 @ 12:38 pm
Followed the scribble live, then read the text of the speech.
First thought - what the &$@; was that? If your Turnaround Agenda doesn’t work, just keep doubling down on it?
Comment by Thoughts Matter Wednesday, Feb 17, 16 @ 12:41 pm
So no details but give the gov authority to make cuts, etc. This is more of a campaign speech with promises and no details.
Where’s the beef?
Comment by Nearly Normal Wednesday, Feb 17, 16 @ 12:43 pm
http://www.illinois.gov/gov/budget/Pages/default.aspx
Comment by Anon221 Wednesday, Feb 17, 16 @ 12:49 pm
Re-reading it and thinking it over, the speech essentially boiled down to:
You all created this mess but trust me with enough power and I’ll fix it.
Comment by RNUG Wednesday, Feb 17, 16 @ 12:50 pm
Look at the Excel spreadsheet on the Budget page. Enable editing, and sort the last column (smallest to largest) to see what is zeroed out to what is proposed for most funding.
Comment by Anon221 Wednesday, Feb 17, 16 @ 12:58 pm
So…he’s threatenin’ to hold his breath ’till he starts turnin’ blue.
This is a pretty lousy impersonation of Cleavon Little in Blazing Saddles.
Hold it, men - he’s not bluffing.
Listen to him, men.
He’s just crazy enough to do it!
He’s desperate.
Do what he say!
Do what he say!
Comment by TinyDancer(FKA Sue) Wednesday, Feb 17, 16 @ 1:04 pm
Pension portion of the budget …
From page 186 of the budget proposal:
Despite the Illinois Supreme Court’s action last year striking down the 2013 pension reforms and the lack of action by the General Assembly on other reforms, Governor Rauner remains committed to reducing the state’s pension debt, which is crowding out resources for critical state services.
From page 187-188 of the budget proposal:
[Note: I’m going to number the following paragraphs so I can add comments afterwards]
Governor Rauner’s Pension Reform Proposal
[1] To address the deteriorating conditions of the five st ate pension systems and the budget pressure caused by growing pension payments, Governor Rauner has been working with President Cullerton on a long-term solution they believe is constitutional, based on a “consideration model” which will offer employees choices in their pension benefits. As this reform will take time to work through implementation of employees’ choices, the earliest savings could be realized would be in fiscal year 2018. However the pension pressures facing the state cannot wait to be addressed until fiscal year 2018; therefore Governor Rauner is proposing immediate steps to help bridge the gap until long-term reform is implemented. He is proposing new reforms that should be enacted while work on a larger plan continues.
[2] Under the governor’s fiscal year 2017 reform proposal is a reduction in the end of career salary “cap” for members of SURS and TRS starting July 1, 2016. The cap, which limits the state’s exposure to benefit increases caused by late career pay spikes, will be reduced from the current six percent to the prior year’s annual increase in the national employment cost (wage) index, which most recently has been two percent. Any pension costs attributable to salary increases above this cap that factor into a member’s final average salary will be paid by the local employer. Employers still will be able to pay any salary increases they desire and payments under current bargaining agreements or contracts will be exempted until they are renewed or expire.
[3] Also included in the Governor’s fiscal year 2017 reform proposal is a reallocation of pension costs for high salaried employees. The state can no longer afford to pay the pension costs associated with salaries above the current salary level of the Governor, which is $180,000.
[4] Beginning July 1, 2016 the local employers in SURS and TRS will be responsible for the annual pension costs attributable to the increments of employee’s salaries above $180,000. Currently SURS has over 1,500 members with a salary at or above $180,000 with a total payroll of $350 million for that highly paid group. TRS has over 400 members with a salary at or above $180,000 with a total payroll of over $90 million for that group.
[5] The proposal includes a five-year phase-in of state contribution variations (up or down) caused solely by changes in actuarial assumptions (including revised investment return and discount factor assumptions) as set unilaterally by each pension system. Changes in assumptions have increased pension liabilities by more than $12.5 billion in the last two years, causing significant deviations from the initially projected State contributions. Increases or decreases in state contributions attributable to assumption changes would be smoothed in over five years, which is the same period used for smoothing the effect of the deviation of actual investment returns from return assumptions. This phase in will facilitate long-term planning for state pension
contributions.
[6] Beginning in fiscal year 2017, the proposed plan calls for all payroll to be included in the calculation of contributions in order to provide more level payments. The funding formula that determines the state’s annual contribution to the pension systems sets the contribution at a level percentage of payroll for the years remaining in the funding schedule to try to provide a degree of certainty in annual payments. In the past
years, changes to the pension systems have excluded some payroll from the funding formula. This would include the payroll for “Tier 2” members (those first hired after December 31, 2010).
[7] Finally, Governor Rauner proposes prohibiting state agencies and offices from “picking up” employees’ pension contributions. No agencies directly under the governor pick up for their own employees, but contributions are picked up by some employers not directly under the governor.
[8] This proposal should withstand constitutional scrutiny because, unlike PA 98-559, it does not diminish any pension benefits, ensuring that there will be no basis for a court challenge.
[9] These new reforms will ease the pension burden on state taxpayers and allow state resources to be devoted to education and other critical services.
My comments:
1 – If the consideration model is what we’ve heard batted around (Sidley-Austin not yet earned argument that you can change going forward), it won’t pass constitutional muster
2 – Cost shifting more of the SURS / TRS “cap” to the schools
4 – Cost shift of contributions on salaries over $180K to the schools
5 – Leveling / 5 year smoothing of assumption changes; might cause a reduction in the annual contribution calculation and probably guaranteed to do since it is being proposed.
6 – Back door change to the Edgar ramp? Pension contributions to be a percentage of all payroll, including Tier 2. Not sure what effect this will have but I suspect it is intended to lower the annual contribution amount.
7 – No more employee pension pickup for the executive branch; does this include superstars?
8 – Other than #1, it does look like it will pass the constitutional test
Bottom line:
Rauner’s “go it alone” approach will do a bit of cost shifting for some TRS / SURS pension contributions and will tweak the pension contribution formula to, probably, reduce the amount of “required” contribution each year.
Rauner is also betting on the Cullerton “consideration” proposal to generated 2018 savings but that may be a long shot.
Comment by RNUG Wednesday, Feb 17, 16 @ 1:30 pm
== Speaker Madigan wants a millionaire surcharge to fund schools. Says he’ll call a bill again this spring. ==
He better hurry since it will have to be a constitutional amendment in order to avoid the flat tax provision of the IL Constitution and that requires passage more than 6 months before the General Election.
Comment by RNUG Wednesday, Feb 17, 16 @ 2:16 pm
RNUG, nice job.
A couple points:
#5, Smoothing, is currently required for investment gains/losses. Adding the other assumption changes is a reasonable idea. I think most of that $12.9 billion they cite was caused by downward shifts in the investment return assumption a couple years ago, so there likely isn’t a lot left to pick up from other fluctuations and changes.
I don’t get the point of #6. Seems counter-intuitive for a System to exclude a portion of covered payroll from the funding calculation because, all things remaining equal, the higher the payroll, the higher the funding.
#7-So if someone is getting the pickup now and Rauner succeeds in taking it away, is that a diminishment?
I don’t see the constitutional pieces of this reducing the unfunded liability by more than one or two percentage points.
Comment by Arthur Andersen Wednesday, Feb 17, 16 @ 3:00 pm
====Workers’ compensation reform and lawsuit reform. Mandate relief, consolidation, local control of bargaining and bidding to drive down property taxes. These reforms will provide many billions of dollars every year in government cost savings. ==
Ok, I’ll be generous and concede his claim that workers’ comp and lawsuit reform will help the economy and bring in more tax dollars. But everything else in this list is LOCAL government, and doesn’t produce a penny of savings or extra revenue for the state government.
Comment by Whatever Wednesday, Feb 17, 16 @ 3:14 pm
WRT RNUG comments on cost-shifting of pension caps and >$180K salaries “to the schools,” 80% of that cost occurs not at public K-12 schools but at state universities and community colleges, who can raise tuition. The wild card is state support for those universities/colleges, which can be altered at any time.
Comment by OldIllini Wednesday, Feb 17, 16 @ 3:14 pm
-AA-
re #7, it only covers people under the Executive branch. If they take away the employee pickup, probably not a constitutional issue because the pension rules specify employer and employee contributions, and the court has been clear about “rules at time of hiring” and “enhancements granted by the General Assembly”.
There might be a special case, like one of the superstars, where it was part of their contract at time of hiring but if it was granted by management, not the GA, after hiring, then I see where it could be taken away. Remember the deal under SERS to do the employee pension pick-up in lieu of a raise? The non-union people were never made whole when it was later rescinded, so you have a precedent.
Comment by RNUG Wednesday, Feb 17, 16 @ 3:30 pm
Governor Rauner basically wants four billion dollars in savings from state employees over a four year period (almost a billion from the first fiscal year and then one billion each year for the following three fiscal years). People actually think this is reasonable and state employees should be happy with the offer is has given?
Comment by ABC123 Wednesday, Feb 17, 16 @ 3:32 pm
sorry - he has given… not is has given (bad predictive text)
Comment by ABC123 Wednesday, Feb 17, 16 @ 3:35 pm
-AA-,
re #6 - I’m guessing but if Tier 2 was previously excluded (because it was more than “self funding”), then adding it in with it’s negative effect should lower the average needed per salary dollar … or I may be all wet on that guess.
Or maybe they’re just going to go with a smaller flat percentage number instead of actuarial valuation; it isn’t clear from the phrasing.
Comment by RNUG Wednesday, Feb 17, 16 @ 3:38 pm
== Governor Rauner basically wants four billion dollars in savings from state employees over a four year period (almost a billion from the first fiscal year and then one billion each year for the following three fiscal years). ==
And it looks like he is planning to get it out of the salary and health insurance line items.
Comment by RNUG Wednesday, Feb 17, 16 @ 3:39 pm
So in the budget he is calling for a 30% across the board cut to government workers compensation? 30%?
Comment by Trolling Troll Wednesday, Feb 17, 16 @ 4:17 pm
Another pension note …
I’ve been going through stuff and found this on page 31 about the emergency powers Rauner wants:
In addition to protecting funding for General State Aid (K-12) and early childhood education, these
powers could not extend to the Road Fund, debt service or payment of pension benefits to retirees.
Note that this only excludes payments FROM the pension funds to the retirees; he could do what ever he wanted to with the payments INTO the pension funds.
Comment by RNUG Wednesday, Feb 17, 16 @ 7:30 pm
Watching the address and noticing Madigan blatant disregard for what was being said was typical but not surprising. It’s time to get to work for all and stop collecting a paycheck until you do. Many in the state are not being paid because your not doing your “elected” job.
Comment by Fyrwyf Wednesday, Feb 17, 16 @ 7:55 pm
RNUG, the irony there is that “pension payments to retirees” doesn’t involve GRF.
I also noted on page 16 that he has moved the pension systems over to the legislative branch.
Pitiful.
Comment by Arthur Andersen Wednesday, Feb 17, 16 @ 10:05 pm
== RNUG, the irony there is that “pension payments to retirees” doesn’t involve GRF. ==
Y
-AA-
I think that was tossed in there to try to fool people that they wouldn’t mess with the pensions at all.
When this Governor says something, you have to parse the statement as if it were mad by Slick Willie (ie, Clinton, not -OW-)!
Comment by RNUG Wednesday, Feb 17, 16 @ 10:17 pm
== I also noted on page 16 that he has moved the pension systems over to the legislative branch.==
Yep. I missed that little “structual” mistake … blew right past it as I was scanning through.
Comment by RNUG Wednesday, Feb 17, 16 @ 10:27 pm