Reform and Renewal, Part 9,487
Monday, Oct 3, 2011 - Posted by Rich Miller
* Politicians apparently still haven’t gotten the message that their district offices and their political offices are supposed to be kept separate…
U.S. Rep. Danny Davis, state Rep. Karen Yarbrough and a township Democratic organization operated for years out of a village-owned building in near-west suburban Broadview.
But the deal among political allies involved no signed leases with the village and was beset by disclosure problems, the Tribune found, raising questions about whether tax dollars helped bankroll political operations.
Among the issues, Davis used federal tax money to pay Yarbrough’s campaign fund about $300 a month — about $15,000 since early 2007 — but the state legislator failed to disclose it in campaign reports. And the Proviso Township Democratic Organization, which is run by Yarbrough, was allowed to use the same village-owned building without a lease specifying how it would be used and how much to pay for it.
The money from Davis came out of his taxpayer-funded allowance for staff salaries, office and travel expenses. Both lawmakers say it was used to cover his share of utilities and cleaning at the shared offices. […]
“(The staffer) was told by an accountant that you don’t want to make it look like the federal government is making a contribution to your campaign,” Yarbrough said.
Oy.
* Double oy…
A new state law barring government employees from drawing a pension while earning another public paycheck doesn’t apply to the vast majority of current workers, leaving thousands free to “double dip” after retirement and doing little or nothing to help salvage desperately underfunded pension systems.
Responding to high-profile examples of double dipping and a public eager for pension reform, legislators last year passed a law restricting the practice, though only for workers hired – not simply retired – after Jan. 1 of this year. That means most current employees would be permitted to double dip even if they retire decades from now.
Lawmakers said they had no choice because the state constitution doesn’t allow them to reduce retirement benefits for unionized public employees, meaning they could not stop pension payments regardless of an employee’s future job status.
But critics say that’s a matter of interpretation, especially because future double dippers already would be retired from their current jobs before they got another, and there is no specific vested right to employment in other government jobs.
* Good points…
Using new, post-Blagojevich rules, the state of Illinois puts up for public bid a contract that’s been held by the same provider for three decades. The winning bidder promises to cut costs for the cash-strapped state by $100 million a year—a cool $1 billion over a decade.
Who possibly could object?
As it turns out, just about everybody in beautiful Springfield. And therein is a classic example of how state government is broken, caught in a morass of mistrust, complexity and good old politics.
At issue in this case is health insurance for roughly 100,000 state workers and government retirees. In an attack led by conservative Republicans—abetted by Democratic leadership, but oddly not by a key workers union—the Capitol gang has pretty well scuttled Gov. Pat Quinn’s plan to shift to new providers. Not good. […]
But COGFA’s co-chairman, state Sen. Jeff Schoenberg, D-Evanston, says the state is tossing away $1 billion. Largely agreeing with him is AFSCME, the big government employees union, which says the anticipated savings “look real.” Even Mr. Schnorf credits the Quinn administration with a sincere effort.
* Statehouse Roundup…
* 40% of single moms raising families in poverty
* “Fox Guarding the Hen House” of Illinois Health Reform?: One of the next steps for the Affordable Care Act in Illinois is setting up the Health Benefit Exchange that will help about 1 million uninsured residents and small businesses get coverage. This week, a legislative committee finalizes its recommendations on the Exchange. One big issue is who should sit on its governing board. The insurance industry has asked to be represented, saying it has expertise to offer.
* Quinn administration accused of dragging heels on Medicaid changes: In January, Illinois lawmakers passed a series of Medicaid reforms that they said could save the state up to $774 million over the next five years. However, federal regulators later said Illinois couldn’t proceed with two of the changes, which deal with how the state verifies the eligibility of Medicaid recipients to receive aid. Some Republican lawmakers now say Democratic Gov. Pat Quinn’s administration isn’t being aggressive enough in challenging that ruling and implementing other reforms.
* Lawmakers to consider reforms for police interrogations
* Lawmakers Will Have Full Plate During Veto Session
* Cook County joins sales tax battle against Kankakee and Channahon
* Erickson: Underwear controversy all washed up
- Robert - Monday, Oct 3, 11 @ 1:21 pm:
while the state constitution doesn’t allow the reduction of benefits for unionized public employees, I wonder if they could get around that by passing a law that would tax at 100% anyone’s “second dip”?
- Demoralized - Monday, Oct 3, 11 @ 1:28 pm:
The objection about the health insurance issue, at least for me, weren’t necessarily the changes. I agree that the state has the right to re-bid contracts. The objection I had surrounded the timing. Employees were given very little time after the new contracts were announced to figure out who their new healthcare provider would be. You don’t make decisions like that at the drop of the hat. There should have been a 6 month or 1 year changeover period so that everyone could get their choices figured out.
- PublicServant - Monday, Oct 3, 11 @ 1:40 pm:
So, if you’re retired with a private pension, you can get a job anywhere, but if you retire from a state position, you can’t get a job anywhere…even if you’re the best person available to fill the opening? Why does that sould (1) unfair and (2) like a restraint of free trade to me?
- More Courage - Monday, Oct 3, 11 @ 1:50 pm:
The health insurance provisions were an “attack led by conservative Republicans”? Last time I check, SB 178 was sponsored by Frerichs-Righter/Jakobsson-Rose-Hays-Phelps-Holbrook and received 98 votes in the House.
That horse has been driven by Frerichs along with bipartisan support. More of a regional issue than a partisan issue and those not in the region didn’t care enough to go along with the Governor because what does that get you anyway?
- wordslinger - Monday, Oct 3, 11 @ 1:55 pm:
–Others argued that the Blues lack a big clinic network in Central Illinois,–
With all those state employees, wouldn’t the clinics and docs just sign on to the Blue Cross network? Or are they the ones driving the objections because they’ll get the lower rates charged in Chicago?
Does the state have to subsidize docs in central Illinois to the tune of $100 million a year? Swell.
- Katiedid - Monday, Oct 3, 11 @ 1:55 pm:
@Robert - just an FYI, the state constitutional protection is not limited to “unionized” public employees.
And, contrary to what the article implies, there are already limits in returning to work for all of the systems, not just the state, although some are stronger than others. The provision that they’re talking about is one that applies only to when you retire from one system (such as state universities) and then get a job that participates in another, unrelated system (such as IMRF).
- Reasonable - Monday, Oct 3, 11 @ 2:00 pm:
Demoralized: Six months to a year to change insurance seems far longer than is ever given even in the best of circumstances. One month would be plenty, especially since most of the providers are going to be the same anyway.
- Ahoy - Monday, Oct 3, 11 @ 2:05 pm:
–but if you retire from a state position, you can’t get a job anywhere…–
No, you can get a job in the private sector. I believe the proposal was to ban someone with a public pension getting another public job… Which they should do. If you want a pension, go into retirement or even work for a private company. The Legislature just needs to make that law, it’s a no brainer. It won’t fix the pension system, but it will help a little.
Also, why are we not trying to save $1 billion on employee insurance? Is Bill Brady really against that?
- Skinny Dipper - Monday, Oct 3, 11 @ 2:18 pm:
What’s happening in two places I know is, the state let their last competent guy that specializes in (insert arcane specialty here) in the division retire without a replacement. It makes the books look better to reduce head count.
They are trying to keep head count down, so they are not hiring someone else for that person’s slot, but guess what. The only guy that knew everything about that job is gone, but the job still needs doing. And nobody can find a vendor on short notice who is up to speed or willing to wait as long as it takes the state to pay vendors.
So, while the HR people flail around helplessly in what will be a 2-year process to get a full timer with similar credentials back onboard for less pay, they give the old geezer a call and beg him to come in on contract to do this one little thing here or there, whatever it is, that only he knows how to do properly.
Now the geezer likes this situation, he can say yes or no as he likes… and he can charge a reasonable amount of money. I think the state limits these guys to 100 days of work per year though, or they have to go back on full time payroll, or lose some retirement income.
Of course, had management been doing their job properly, the geezers’ replacement would have been training up alongside him for the past couple of years and just stepped into that key job, with a raise. But there is no square on a spreadsheet to put down smart things like that.
- Irish - Monday, Oct 3, 11 @ 2:21 pm:
So if the law against double dipping were passed, then a member of the GA could not retire and then after the obligatory revolving door time limit was up then go work for the Tollway? Or run for the US Senate?
Or would elected officials be exempt from this restriction on the common class?
- Demoralized - Monday, Oct 3, 11 @ 2:29 pm:
Reasonable:
I would agree with you if most of the providers were the same. But, down here in Springfield a good deal of the providers were NOT the same. Many, many people were going to have to change doctors. You don’t just spring that on people at the last minute and say deal with it and not expect a huge backlash.
- Robert - Monday, Oct 3, 11 @ 2:43 pm:
== Many, many people were going to have to change doctors. You don’t just spring that on people at the last minute and say deal with it and not expect a huge backlash. ==
true, but this has been true in the private sector for some time. as employers find cheaper insurance companies, they switch providers, and employees then have to find another doctor. yes, it is certainly a big inconvenience, but Gov. Quinn isn’t trying to do anything unusual here.
- Scottish - Monday, Oct 3, 11 @ 3:08 pm:
The insurance changes should have been approved in consultation with CGFA - as required by statute when self-insurance is expanded. A reduction in HMO coverage would have resulted in an increase in self-insurance coverage. Networks were not in place in April as required - but they are being put in place now. The real issue is poor planning, coordination and communication to all channels of government. Legislators are trying to force improvements through law, but you can’t legislate management and leadership.
- RetiredStateEmployee - Monday, Oct 3, 11 @ 3:23 pm:
I only ask for transparency. If the state can’t show us that there really was $100 million a year in savings, I still think it was a rigged bid to get this contract to a Chicago company. If we, the voters, believe this number without proof, they could sell us anything.
- Wumpus - Monday, Oct 3, 11 @ 3:24 pm:
Perhaps they should stop being single mothers. I understand divorces happen, but I am talking to the women and men who make kiddies repeatedly w/o any real income potential. Condoms are cheaper than diapers and daycare.
- JBilla - Monday, Oct 3, 11 @ 3:55 pm:
Hilarious all the way through. If we can’t change health care providers to get a better deal or curb the payout of double dipping pensioners, whats the point of having a government anyway?
Why don’t we just put Cousin Sal in charge and let him make deals with his friend. Why pretend that politicians are capable of a damn thing. Just aggravating.
- PublicServant - Monday, Oct 3, 11 @ 4:02 pm:
@Ahoy - So, if a state job is open and advertised as such, and I am qualified to fill it, you’re telling me I can’t apply for it and interview, because I retired on a state pension? And you don’t think that law discriminates against a specific class of people? I think Putin has a job for you in Russia, comrade.
- Just Me - Monday, Oct 3, 11 @ 4:22 pm:
In their defense, it is perfectly okay to combine your government activities with your campaign activities as long as you don’t get caught.
- Six Degrees of Separation - Monday, Oct 3, 11 @ 4:31 pm:
–but if you retire from a state position, you can’t get a job anywhere…–
No, you can get a job in the private sector. I believe the proposal was to ban someone with a public pension getting another public job… Which they should do.
Hmmm…should state retirees be prohibited from taking a federal, county, municipal or university job, or a job with Metra or the Metropolitan Water Reclamation District? Or just another state job?
In some fields, the private sector is much more lucrative than “another government job” after retirement, so maybe a moot point. And many state jobs will have you forego your state pension and make you start paying into the retirement system if you return to work, so another moot point.
- Institutional Memory - Monday, Oct 3, 11 @ 5:05 pm:
Mr. Hinz said:
“like former GOP gubernatorial nominee Bill Brady of Champaign”
If that’s as accurate as Crain’s gets about matters Downstate, why should anything else be accepted at face value?
- steve schnorf - Monday, Oct 3, 11 @ 5:10 pm:
Rich, I hope I said to Greg “sincere goals” or “sincere intention”. Those would be measured by what one was seeking to accomplish, in this case a reduction in expenditures on employee/retiree health care.
“Sincere effort” would be measured at least somewhat more by what was actually accomplished, and the answer here is probably not as much as might have been. From a cost basis, the savings this year would appear to come primarily from the freeze in HA’s rates.
I think much of the concern expressed by employees and retirees was centered around their inability to do an apples to apples comparison. Will I be able to keep my doc? Sorry, can’t tell you (because we don’t know what plan, if any, your doc will sign up for). What will my premium be to keep my doc? Sorry, can’t tell you (same reason).
Furthermore, there was great skepticism about the savings number. I just went back and looked at the Mercer presentation to COGFA to be sure I hadn’t missed it. To calculate (projected) savings, you had to predict migration patterns from the PC/HA HMOs to the newly available choices. I haven’t seen it.
The prediction had to make assumptions about the cheaper, but downstate virtually non-existent BCBS doc network. Should BCBS be able to sign up an attractive network at their prices, a lot of people would follow their docs to this new, cheaper alternative, and savings would result. But if BCBS couldn’t get the right docs, people migrate to the OAPs instead, at a higher cost, or to the PPO at an even higher cost, instead of savings.
It is my nature to think this way, but rather than risk an all or nothing on the $100m, I think the department should have worked harder at making a deal, maybe to save $50 or 75 million, because the way the department let it get positioned at the end wasn’t save $100m vs save $75m, it was save $100m vs save virtually nothing, and that is a lose.
On the other hand, there were some insider baseball results from the ordeal that I believe will leave the state better positioned to negotiate with providers in the future, so maybe it’s a short-term lose but a longer term gain.
- Retired Non-Union Guy - Monday, Oct 3, 11 @ 6:46 pm:
Skinny Dipper and others,
As the holder of some of that unique knowledge (which I tried to pass on for at least two years before I retired and the State wouldn’t hire or assign a replacement for me to train) and a 2002 ERI retiree, I have some restrictions on what and how I can go back to work for the State. The State can have me come back for 75 days or less per year at my previous pay level but they also have to pay my normal benefits, like SS contributions. The State *can not* hire me directly on a contract; that is illegal both for myself and the contracting agency; in fact, the contracting agency can lose the funds they were going to expend on the contract. The only way around those restrictions would be for me to go to work for a private firm, and that private firm to then win a State contract and assign me to work that contract. However, that would be idiotic because, with that kind of middle man and overhead, the State would have to pay 3 to 4 times more than what they would have paid under the 75 day rule. I’m not saying it doesn’t happen, but it ain’t smart business to pay more than you need to for talent.
As far as the health insurance deal, go back and read the COGFA report (it’s online). The books were being cooked a bit; the comparisons were between apples and oranges. The numbers used in the press releases weren’t the numbers in the charts. The HA bid was number was much closer than stated (actually cheaper than the self funded average) and if you went with the assumption a lot of the HA people would default to one of the State paid plans, it was actually going to cost the State *more*; they had to make some pretty ridiculous assumptions to make it come out any other way. The other fishy part of that bid was using something other than cost as the major criteria for the HMO portion of the bid; it made it much easier to “target” subjective specs that would award the bid to who “they” wanted to win it. It wasn’t about saving the State money per se; it was about the fact that is the State could get people off the HMO’s (which they had to pay every month) and onto one the State funded plans, the State could “cash flow” their way to hundreds of millions in “savings” by simply using their 9 to 12 month payment delay technique and push all those bills off to the following fiscal year. It was going to actually cost the State more money in terms of absolute dollars, but they were going to be “next year’s dollars” …
- Marty - Monday, Oct 3, 11 @ 11:57 pm:
“Double dipping” in Illinois is no big deal, our pension code generally does not let someone pull a pension and go back to work for the same plan sponsor, which is allowed in some states where you get the horror stories of the cop or city manager who retires on Friday and is back in the same job on Monday.
What we call “double dipping,” is working for a DIFFERENT employer, and only became an issue with the early retirement buyouts in the 1990s and early 2000s. Even under the old “Tier 1″ pensions, if you retire at 60, which is about average without the buyouts taht everyone now knows were a mistake, and go to another public employer, you have to work 8-10 years to vest and then your 2nd pension is only about 20% of your second salary.
Very few people will work to that age for such small benefit. It is inherent in defined benefit pensions that they only really pay off for the employee when he works a full career or close to it under a single plan and gets that benefit up toa high number.
This is a totally ginned up issue that is being used to stoke up people, and has almost no real financial significance; and I write as someone who would like to see a way around the constitutional limitations for some things that would actually reduce liabilities, like COLA and unreduced retirement age.