* My latest syndicated newspaper column takes a look at some of the false information being spread about the constitutional convention referendum…
I’m a member of a union. My father was a proud union member. His father was a union member and, for a time, a union organizer. I own a business. My maternal grandparents, whom I cherished more than anyone else when I was a kid, were farmers. My mother was a public school teacher for several years. Both of my parents are now retired and rely heavily on their government pensions.
What the heck does any of that have to do with anything?
Well, unions, business groups, the Illinois Farm Bureau and, most of all, groups representing retired public employees and retirees are all up in arms about the upcoming state constitutional convention referendum.
Every 20 years, Illinois voters are given the right to call for a constitutional convention. And all those aforementioned groups want you to vote “no” next month for various reasons.
I’m on the other side. I want you to vote “yes,” but because of my personal history, I’m often a bit puzzled to find myself on the other side of this issue.
The union people are worried about the introduction of a right-to-work provision, or other erosions of their hard-fought gains in this state.
Business groups fret that a constitutional convention could come up with crazy liberal ideas, or mess with the way income taxes can be levied on businesses.
The farm bureau sees reason for concern in the very nature of Illinois politics. The convention, they warn, would be “stacked in favor of urban areas.” Farmers’ property taxes are lower than residential rates, for instance, and that might go out the window.
Public employee and teachers unions and associated retiree groups are probably the most intense in their opposition, however. That’s probably because their members may have the most to lose.
Two years ago, Gov. Rod Blagojevich attempted to reduce pension benefits for future state and local public employees and teachers. Senate President Emil Jones, his only real ally, backed him up. House Speaker Michael Madigan, who doesn’t get along with Blagojevich, announced his keen interest in the governor’s plan. The unions freaked, and it took a huge effort to defeat the proposal.
The unions and retirees figured that if “friendly” politicians who had accepted millions of dollars in campaign contributions from them had turned against their interests so quickly, then a constitutional convention, which can’t possibly be controlled as easily as the General Assembly, would be an absolute nightmare.
They’re right. The state’s underfunded pension systems are draining the state budget at an alarming rate, causing outcries of reform from numerous corners. And then there are those who regularly whip up public resentment by pointing to the average Joe taxpayer, who has no guaranteed pension benefits for life. A constitutional convention may very well address this issue.
However, some of the retirees have unfortunately resorted to distortions, brazen fear tactics and outright lies to frighten pensioners into voting “no.”
Let me clear up a few things.
No matter what happens at the constitutional convention, state and local governments cannot legally reduce pension payments to current retirees. A convention cannot legally take away pension payment benefits already earned by current employees. The chances are nil that the delegates would do anything weird such as force the combination of the Chicago teachers pension fund and the downstate teachers pension fund.
And, of course, everything decided at the constitutional convention would have to then be approved by the voters in a statewide referendum.
A convention could, however, change a few words in the current constitution that would allow the General Assembly to eventually make changes, such as reduce future pension benefits, including health care benefits, for current workers or workers yet to be hired. But it’s highly improbable that the convention delegates themselves would micromanage pension funding proposals.
Personally, I wouldn’t blame public employees and teachers for voting “no” on the constitutional convention question. On the other hand, I think most, maybe not all, of those other groups mentioned above are probably overstating their case.
But, for me, there are just too many other issues - like the power hoarded by the very few at the expense of the many - which so desperately need addressing in this state to pass on this once in a generation opportunity. The people need to take back their constitution for themselves. So, please, vote “yes” on the constitutional convention. Thanks.
* Scott Reeder also examines the upcoming battle over the pension issue in his latest newspaper column…
Public-sector retirement benefits are not as rosy as one might think. After all, many public employees, such as teachers, are not eligible for Social Security and government employees oftentimes have paid in more toward their retirements than others.
But in a world of sound bite political campaigns, expect those facts to get lost in the mix.
The perceived retirement disparities between government workers and everyone else are ripe for political exploitation. (The only other option would be for politicians to own up to their own irresponsibility — which will happen when pigs fly.)
Illinois taxpayers owe almost $10,000 per household in teacher and state employees’ pension payments. That shortfall will have to be made up somehow.
It’s a sad situation, but one ripe for political exploitation.
* The proponents of the convention referendum are trying to leapfrog the appellate court and go right to the Illinois Supremes…
Undeterred by a Cook County judge’s ruling that the constitutional convention question will appear on the Illinois ballot as drafted — mistakes and all — Con-Con proponents have appealed to the state’s highest court to intervene on behalf of voters.
With only three weeks until Election Day, Lt. Gov. Pat Quinn and the Chicago Bar Association (CBA) are petitioning both the Illinois Supreme Court and Appellate Court to reverse Cook County Judge Nathaniel Howse Jr.’s recent decision on the matter. Howse found the Con-Con ballot language to be both “misleading and false,” but decided it was too late to do anything but distribute flyers at the polling places with better wording, as well as a warning to disregard the language on the ballot.
The plaintiffs would rather see a separate paper ballot issued for the Con-Con question. This idea, however, has drawn opposition from state election authorities who say that dealing with a hand-count of upwards of 8 million ballots would be a nightmare.
A hearing is scheduled for tomorrow.
* And here’s an interesting thought…
Contrary to articles written by Shaw Newspapers in recent weeks, the question as to whether voters want a constitutional convention will not be on a separate ballot, but on the same ballot as everything else.
Where did the newspaper get the incorrect information on the procedure for amending the 1970 Illinois Constitution? The 1970 Illinois Constitution, Article 14, Section 1(c): “The vote on whether to call a Convention shall be on a separate ballot.”
The straightforward statement in the document where the buck stops for Illinois law and government begs an important question — could the losing side challenge the constitutionality of the vote? […]
Everyone interviewed for this story — all of whom have law degrees — agreed that the language of Article 14 opens up the possibility of a legal challenge. But they said they hoped no one would do that.
“Any citizen can challenge anything they want on a convention or an election,” said Nancy Kaszak, spokeswoman for the anti-convention Alliance to Protect the Illinois Constitution. “But the question is, would they get past the motion to dismiss?”
- VanillaMan - Tuesday, Oct 14, 08 @ 8:55 am:
The sheer ignorance regarding this issue is astounding. I continue to hear stupid comments about how the constitutional convention is supported by people who want new things added to the constitution, as though they were discussing amendments.
There does not appear to be much explanation on what the constitutional convention is in the media. It seems to be over their heads, or they are too disinterested in it to discuss it intelligently.
The lack of an ad campaign is revealing to us that many reporters get their information and talking points from advertising.
- Captain Flume - Tuesday, Oct 14, 08 @ 9:07 am:
== This idea [separate paper ballot], however, has drawn opposition from state election authorities who say that dealing with a hand-count of upwards of 8 million ballots would be a nightmare. ==
God forbid that democracy should trump convenience.
- fed up - Tuesday, Oct 14, 08 @ 9:08 am:
I’ll be voting no. the pension issue is just to big a risk. Govt employees dont get social security. I am all against the politicans that collect mulyipe pensions or who get a pension after just a few years. But the average cop or teacher depends on that pension to be there. Politicans not living up to their responsibilitys to fund the pensions by defering payments is what has led to pensions being underfunded
- Bill - Tuesday, Oct 14, 08 @ 9:08 am:
VanMan,
Not all of us can be as smart as you. What an elitist view! I voted yesterday. I want my vote to count. If people can read they know what they are voting for or against. These constant lawsuits by people who know that their position is weak and will lose is getting old. Let the people decide. You are supposedly their champions. Don’t be afraid of the voters! They know what yes and no means. Most of them think it is a waste of time and money. I agree. Let the people speak!
- wordslinger - Tuesday, Oct 14, 08 @ 9:11 am:
I’d never noticed the separate ballot provision before. Wonder why Quinn and Bruno didn’t challenge the Cook County ballot?
Intuitively, a separate ballot on the question would spark more voter participation and increase the chances for passage.
As it stands now, you’re going to have to be awfully motivated to slog through all those judges to even get to the question.
- Anonymous - Tuesday, Oct 14, 08 @ 9:16 am:
Before using the USA Today survey to conclude that government workers are vastly overpaid compared to private sector workers, we have to consider a number of factors not mentioned:
1. What percentage of private sector jobs are part-time or seasonal as opposed to full time? If government workers are more likely to be full time, of course they will make more money.
2. What about situations like that in Corrections, in which severe understaffing means workers put in long hours with lots of overtime? Remember, one of the highest paid public employees in the State of Illinois was (if I recall correctly) a supervisor of a home for the disabled, who earned over $200K last year purely because of the overtime she put in. If you didn’t know how many hours she was putting in a week, you might conclude she was grossly overpaid.
- chic ster - Tuesday, Oct 14, 08 @ 9:23 am:
The Chicago Southland Chamber of Commerce will host a Con-Con debate today, October 14th, noon at the Tinley Park Convention Center. Lt. Gov. Pat Quin and Wayne Whalen will present thier views on the issue. For more information, call the chamber at 708-957-6950.
- Cassandra - Tuesday, Oct 14, 08 @ 9:24 am:
State government in Illinois, when reduced to its essentials, is a pile of money presided over by a bunch of Democrats who at best lack courage and at worst are overwhelmingly corrupt and whose actions
are dictated solely by nepotism, cronyism and the
desire to please large special interest contributors to their “campaign” funds. They were preceded by a bunch of Republicans who were equally deficient.
The notion that this can be resolved at the ballot
box by throwing the bums out is naive, given the extreme susceptibility of the Illinois political system tomoney and special interests. Average taxpayers, as Obama (no, I’m not a fan) has famously pointed out, don’t have a seat at the table…in Illinois, that means we don’t have a seatat the money table. Our money gets spent but notin the best interests of most of us. We pay a huge corruption tax on it too.
We taxpayers don’t have too many options here.
Con con is a tool…a vote to express our disgust at the enormous waste and misuse of our resources and to send a message of demand for reform…a demand that we should be sending as many ways
as we can.
- Sal Says: - Tuesday, Oct 14, 08 @ 9:29 am:
This should raise a firestorm.
I’ll vote no; I actually rely on the State-only pension.
Further, not being a teacher, I did choose to work for the State out of college AND took the LOWER pay throughout my career for the security of not being transferred out of State, so I could be there for my family. I acutally need that pension.
- Cook County Commoner - Tuesday, Oct 14, 08 @ 9:58 am:
I sympathize with the rightfully fearful government employees who dread con-con for exposing their pensions’ constitutional protection to the garbage heap. How this protection slipped into the 1970 constitution is still fuzzy. But fiscal reality, if not fairness to those who must fund these giveaways while their own retirements are under jeopardy, is approaching these ticking time bombs. Like their counterparts in the private sector, they are simply unsustainable. The constitution may prohibit government from changing vested benefits, but it does not require government to impose taxes and sell bonds to fund them. At some point, elected officials will fear loss of their jobs more than loss of government employee union contributions, votes and campaign workers. Also, the constitution cannot force taxpayers to happily continue working past retirement at 66 to fund a teacher’s or a policeman’s retirement at 55 with thee to five times more than social security pays. And certainly, the pension related bond buyers will ultimately say “No” to issue afer issue of new and refinancing bonds to keep a doomed ship afloat. A word of advice to the government employees: Work now to salvage what you can before you loose everything because private sector employees in the local steel and airlines industries remember how you arrogantly sat back an ignored your union brothers when they lost their pensions.
- Greg - Tuesday, Oct 14, 08 @ 9:59 am:
I’ll vote yes, but not just because I wish the warnings about pension reform were true, but rather because I trust people like Rich over various PACs. You all should stop obsessing about pension reform in public, or you’re going to gin up broad support for the con-con.
- Cassandra - Tuesday, Oct 14, 08 @ 10:16 am:
I’m having a lot of trouble believing that the pensions of current pensions (or current state employees) would disappear as the result of a con con. I suppose the automatic 3 percent (or more) raise they get on their pensions every January could be affected, but even that seems unlikely.
The uproar over the pensions, however, reinforces what I’ve been saying all along. In this day and age, these government pensions are undervalued when you look at the compensation packages of government employees. In fact, they have become so valuable that employees will go to great lengths to keep them–like a Manhattan apartment, as the NYT pointed out a while back in an article about
the pension system.
But can the rest of, the funders, us afford them….as we move into our pensionless futures. We sure as heck can’t rely on the stock market.
- the Other Anonymous - Tuesday, Oct 14, 08 @ 10:17 am:
From Rich’s syndicated column:
The farm bureau sees reason for concern in the very nature of Illinois politics. The convention, they warn, would be “stacked in favor of urban areas.” Farmers’ property taxes are lower than residential rates, for instance, and that might go out the window.
Interesting. Property taxes go to fund local governments, not state government. So are the farmers really saying that they wish to continue to have underfunded schools, etc.?
Remember, the poorest school districts — and consequently, the highest property tax rates — are in rural counties, particularly southern Illinois.
- Secret Square - Tuesday, Oct 14, 08 @ 10:18 am:
I don’t see what’s wrong with changing benefits for FUTURE state employees, as long as present state employees get the benefits they were promised.
If this is done with plenty of lead time, say several years, then new workers, at least, will know what they are getting into and will have a choice of whether or not they want to accept a state job over a private sector job.
Also, I believe most workers of the Gen X and younger cohorts are aware of the situation with Social Security and private pensions, and are pretty much resigned to the idea that they are going to have to keep working past age 65 and that they cannot count on Social Security or any defined-benefit pension plan being there for them. I am one of these (I’m in my early 40s). While having a defined-benefit pension plan is nice, I don’t think most people my age or younger expect them as a matter of course anymore. Promising benefits and then reneging on them is an entirely different matter from not promising them in the first place.
- ZC - Tuesday, Oct 14, 08 @ 10:24 am:
If Blago, Madigan and Emil Jones all agree on the outlines of an issue, that may mean that the world is on the verge of being sucked into a black vortex. Or maybe the idea looks to them all like a fiscal necessity.
Rich isn’t quite saying it, but I am getting the strong sense from his posts that he also thinks that reducing _future_ pension guarantees to new retirees might be necessary fiscal triage for a state that has the worst-funded system in the country. So make that Emil, Madigan, Blago and Rich (if I’m right). The stars tremble.
I ask every current retiree worried about their pension to consider if future generations of Illinois residents, too, do not have some right to adequately funded schools, roads without potholes, good higher ed and public safety. Because from what I’ve heard, right now, pensions, Medicaid and debt service alone are enough to swallow _all_ the future revenue increases in Illinois.
- Gene Parmesan - Tuesday, Oct 14, 08 @ 11:00 am:
“Interesting. Property taxes go to fund local governments, not state government. So are the farmers really saying that they wish to continue to have underfunded schools, etc.?”
No, farmers are saying that they would like their land valued on its productivity, not on the price it may bring on the open market. As farmland is an integral asset in crop production, it makes sense to use a productivity index, by which they are essentially using an income analysis to determine the assessed value, as opposed to a market analysis.
I’m so disappointed in the Farm Bureau opposing the Con-Con. Personally, I think rural communities/citizens could gain a lot from Con-Con.
- never retire - Tuesday, Oct 14, 08 @ 11:25 am:
There is indisputible data that shows the state’s pension systems are cheaper for the taxpayer than the cost of Soc. Security and a 401K match that most have in the private sector. The only, only, reason we have such a large pension debt is because the legislature skipped required payments for decades. Also, we are at the top of the ramp. After next year that pension payment goes down.
http://www.ctbaonline.org/All%20Links%20
to%20Research%20Areas%20and%20Rep
orts/Pension/DB%20vs%20%20DC%20
MASTER.pdf
- Cassandra - Tuesday, Oct 14, 08 @ 11:25 am:
Actually, I would prefer to see a pension system that is open to all Illinois employees with appropriate vesting times and, perhaps, much higher contributions backed by the state. Why should we continue to fund a pension system for state employees while increasingly few of us have them ourselves. Everybody pays more into the system, including state employees, and employers are required to contribute to it, but it’s a public good available to all employees and it’s portable among employers.
Too far out, you say?. But we are paying 700 billion to bail out the financial service industries, the banks the car industry….why not bail ourselves out into a decent retirement, whether we are state employees or no. The money is there…you just have to use it for the people
not just the state bureaucracy.
- Greg - Tuesday, Oct 14, 08 @ 11:50 am:
Never retire,
It’s preposterous to argue that by definition a defined benefit system is cheaper for taxpayers. Looking over the study you cite, I assume you’re referring to the difference in the plans’ management costs.
- cermak_rd - Tuesday, Oct 14, 08 @ 12:04 pm:
So, I’m confused. People are already voting now, without any “correction” to their ballots and no signage, they are voting whether or not to call a convention. If the court rules that changes must be made, what happens to those early votes? I was planning on skipping out today to vote early, but now I’m worried.
- Captain Flume - Tuesday, Oct 14, 08 @ 12:17 pm:
== I was planning on skipping out today to vote early, but now I’m worried. ==
If you live in Chicago, don’t you have multiple opportunities to cast votes?– I know that was a cheap shot, but it is where I was born, so I feel some affinity.
- Bill - Tuesday, Oct 14, 08 @ 1:00 pm:
Greg,
You really don’t know what you are talking about. Vote however you want but don’t spread disinformation to other people.
- steve schnorf - Tuesday, Oct 14, 08 @ 1:02 pm:
The misinformation, misapprehension, and therefore unfounded conclusions that spread around on the web are legion. To address just a few:
Assertion: Government employees don’t get social security. TRS members don’t, but SERS members can and most do.
Assertion: Current government employee pensions are bankrupting the state. No they aren’t. Current costs are very reasonable, probably a little more than a third of what we are contributing currently. What is causing the problem right now is the principal and interest on the contributions owed but not paid over the past 25 years.
Assertion: Defined benefit programs are a thing of the past, and have virtually disappeared in the private sector. Partially true but misleading. Among very large, heavily unionized employers (such as the state) they are as prevalent as ever according to the most recent data.
Assertion: Moving to a defined contribution plan would save the state money. Very misleading. Over the next 25 years the state’s expenses would increase quite a bit, because all of the unfunded principal would still have to be paid off, with interest, while additional contributions would have to be made for new employees. After that, it would simply depend on what level of employer match was being paid Given the unionization of the public workforce, any assumption s that the match would be real low is simply unrealistic.
- Scott Reeder - Tuesday, Oct 14, 08 @ 1:02 pm:
For a private-sector employer, switching from a defined benefit plan to a defined contribution plan saves the employer money. But please remember, government plays a role in providing for the well-being of private-sector retirees through Social Security and a host of other social service programs. The question we should be asking is what is the most efficient way for government to provide for the needs of its own retirees? Simply cutting promised pensions doesn’t benefit workers or government. The cost of supporting those folks will just show up somewhere else on the public balance sheet.
- Greg - Tuesday, Oct 14, 08 @ 1:04 pm:
Bill,
What did I get wrong? All I said was that this doesn’t make sense:
“There is indisputible data that shows the state’s pension systems are cheaper for the taxpayer than the cost of Soc. Security and a 401K match that most have in the private sector.”
- Arthur Andersen - Tuesday, Oct 14, 08 @ 9:16 pm:
Greg- Bill is right.
Your point about DB plans having lower investment management fees than DC since they “buy wholesale,” so to speak, is one factor but not the biggie. BTW, their admin costs are also lower, a lot lower, because they are run by dumb, overpaid political hacks, as Cassie likes to characterize public servants, instead of Fido or T.Rowe where the clerks get six-figure bonuses.
Cassie, have you ever needed the police at your house? Ever called the fire department? Wanted a pothole patched? Your relentless whining about the public sector is pathetic. Bet you can’t wait to get in that booth and vote Nader. Again.
The relevant costs to the State or any employer are the “normal costs,” or what percentage of the annual payroll is spent annually on the employee benefits. For example, TRS’s normal cost is around 8% per year, or a couple percentage points less than a 4% employer match 401(k) plus 6.2% Social Security. On a $9 billion annual teacher payroll, 2.2% is $200 million. That’s the math, and it’s indisputible.
The unfunded liability, as Schnorf and other experts have noted here and in other places, is what blows out the cost of state pensions, not the benefit structure.
Rich, AA remembers a lot more politics (and proposals to cut current benefits) from Rod back when he was into pension reform, but that’s for another day.