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*** UPDATED x3 - IEA contradicts Cross - Quinn contradicts Cross *** Afternoon videos: Cross says governor wants to trade CME bill for borrowing plan, predicts pension reform vote in November
Thursday, Oct 27, 2011 - Posted by Rich Miller * House Republican Leader Tom Cross claimed today that Gov. Pat Quinn offered to support the CME Group tax cut proposal if the General Assembly agreed to borrow $4.5 billion over 7 years to pay off old bills. Cross said he didn’t favor the borrowing idea. Here’s part 1 of his press conference… *** UPDATE 1 *** A spokesperson for Gov. Quinn denied that her boss specifically offered to straight up trade his support for the CME tax cut in exchange for a borrowing plan. “Republicans made it very clear that they wouldn’t support the CME proposal as it is without a larger package of tax cuts,” the spokesperson said. “In response to that, the governor is open to negotiating a larger package for jobs. There were a lot of things discussed in that context.” The spokesperson said the governor is reviewing the CME proposal, which could cost upwards of $100 million. “He’s looking at options to mitigate the loss in revenue, like closing corporate tax loopholes,” she said, saying the proposal would result in a “pretty hefty loss” for the state budget. * Part 2 included more discussion about the CME bill. Cross claimed that the governor “wasn’t going to support CME” without borrowing, and said he mentioned some off-shore tax provisions as well. Cross also claimed that the governor “didn’t seem all that excited” about a pension reform bill Cross wants to bring to a vote in the second week of veto session, saying Quinn had some constitutional questions about the proposal. Cross also said his “theory” is that the governor targeted Downstate facilities for closure had a lot to do with Quinn’s push for a borrowing plan for old bills. Watch… * Senate President John Cullerton told reporters he’ll meet with Gov. Quinn next week to talk about gaming expansion. Cullerton said that means, as of now, the issue is on hold. Cullerton also disagreed with characterizations made by Senate GOP Leader Christine Radogno and Leader Cross that Gov. Quinn signaled opposition to the CME Group tax cut bill. Cullerton claimed the governor said he’d look at the proposal. Watch… * Cullerton’s Tenaska bill failed in the Senate today and was placed on Postponed Consideration. His closing remarks… * Rep. La Shawn Ford asked for a moment of silence today for the Occupy Chicago protesters. Listen… *** UPDATE 2 *** The governor’s plan to pay Regional Superintendent of Schools salaries out of the personal property replacement tax (which goes to local governments) fell way short today in the House. The bill received 59 votes. It needed 71 to pass. Here’s audio of the floor debate. Rep. Roger Eddy goes off on Quinn at about the 12-minute mark… * More…
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- Fed up - Thursday, Oct 27, 11 @ 1:57 pm:
So a group of millionaires is brokering a deal to further harm the middle class by destroying the pension system. Wow I thought our legislators had been bought and paid for after the Com Ed bill it looks like we have the worst legislature money can buy.
- Louie - Thursday, Oct 27, 11 @ 2:00 pm:
Cross bill to reform pensions is a step in the right direction to bring fiscal sanity to the state.
- Burnham Wannabe - Thursday, Oct 27, 11 @ 2:04 pm:
The pension bill will actual hurt the state. With the amount of contributions declining, how will this help the state pay for those getting pension checks? SB 512 will literally collapse the funds.
- Will - Thursday, Oct 27, 11 @ 2:08 pm:
~Cross bill to reform pensions is a step in the right direction to bring fiscal sanity to the state.
Hmm. So if the state is seeking fiscal sanity, why it would cut the tax bill for the most profitable company in the state? A company, by the way, that is set to make 1.5 billion in net profits this year.
- Rich Miller - Thursday, Oct 27, 11 @ 2:12 pm:
BW, the amount of money that employees pay into the funds is a relatively small chunk of the state’s total annual contribution. It’s not like Social Security. State payroll is just under $3 billion and employees kick in 4 percent. Losing all that money would be significant, but not catastrophic.
- Jim - Thursday, Oct 27, 11 @ 2:23 pm:
It will be interesting to see what the employee payment % is increased to. City employees pay 8.5% and I think this will be increased to around 12%.
- JustaJoe - Thursday, Oct 27, 11 @ 2:24 pm:
“Republicans would provide 30 votes for the pension bill, Senate Bill 512, and House Democrats would provide another 30″
What? A compromise on political cover? Jeez. How about some compromise on the ISSUES involved?….. like constitutionality;… like the built-in periodic changes;… like some assurance that the GA makes the state’s contribution…like making sure the legislative pension plan follows the same rules (might work better than term limits for some fresh air).
- Ahoy - Thursday, Oct 27, 11 @ 2:24 pm:
I’m actually for some modest pension reform (note modest) but I’m extremely concerned about the Civic Club “brokering” a deal with the Republicans to provide 30 votes. What do the Republican’s get?
Usually us outside groups lobby, advocate or provide campaign donations. I find the brokering of the deal odd and think there should be some disclosure.
Also, I wish the Republican’s were as concerned about paying businesses who are owed money by the State as they are about tax cuts to add jobs. Let’s withhold payment from some businesses but give others more tax cuts… What?
- Cassiopeia - Thursday, Oct 27, 11 @ 2:24 pm:
The pension system must be reformed so that it will be there for current and future retirees. No one likes to pay more, but if current employees don’t increase their contributions then it simply will not be viable when it is time to retire.
The AFSCME is shortsighted and irresponsible.
- Cindy Lou - Thursday, Oct 27, 11 @ 2:27 pm:
So do ‘we’ get to hear just what ‘deal’ Cross’s 60 voters got?
- Slick Willy - Thursday, Oct 27, 11 @ 2:28 pm:
The pension system must be reformed so that it will be there for current and future retirees. No one likes to pay more, but if THE LEGISLATURE doesn’t start making THEIR SHARE of pension contributions then it simply will not be viable when it is time to retire.
I took the liberty of fixing that for you…
- OneMan - Thursday, Oct 27, 11 @ 2:34 pm:
Ummm do you do moments of silence for dead people?
- walkinfool - Thursday, Oct 27, 11 @ 2:36 pm:
Anything with Civic Committee involvement will include false assumptions and false numbers. That alone should cause all legislators to pause and independently question and analyze the data, before voting.
We need some reforms, but based upon reality.
- soccermom - Thursday, Oct 27, 11 @ 2:44 pm:
Ya know, when the Governor holds a news conference to talk about a piece of legislation, his opponents in the GA start talking about “government via press release” and comparing him to Blagojevich. But when he sits down to talk with Cross about what it would take to put a legislative agreement together — oh baby, don’t get between Cross and microphone. You’re not negotiating in good faith when you take a tattling break between sessions.
- Liberty First - Thursday, Oct 27, 11 @ 2:54 pm:
Walkin fool is exactly right. TRS had an independent analysis done that showed the Civic committee plan will cost more and the Civic committee can provide nothing more than their opinion about saving funds. In TRS, there is an early retirement option and anyone on a money purchase formula could actually retire earlier with increased contributions. The various plans are different. Non union lower paid university and school workers will take a big hit under these changes.
- Liberty First - Thursday, Oct 27, 11 @ 2:57 pm:
Also the reform we need should start with maklng the pension contributions. 2/3s of the state contribution is making up for past non-payment. The state has the money, it doesn’t have spending discipline.
- Dirty Red - Thursday, Oct 27, 11 @ 3:09 pm:
I’m not sure IEA’s statement says anything new. The SJ-R report did not claim the votes were there on both sides, only that Cross said he had his 30.
Regarding the Cross v. Quinn: Are we thinking Cross said this to put pressure on Quinn? It seems like he had a lot of details. This might have been a backward way of communicating with the governor. There was talk back in 2010 when borrowing came up in the House (the infamous vote that died when David Miller voted “No” and later switched to “Yes” along with Bob Biggins that there were other HGOPers wanting to vote “Yes” but did not given the caucus’ hard position.
- TwoFeetThick - Thursday, Oct 27, 11 @ 3:12 pm:
Enough talk, bring it on. Let’s get the issue of pensions fully before the courts so it can be decided. But be forewarned, oh ye in the judicial branch: if you let them take the rank-and-file state employees’ pensions, they’ll come for yours next.
And I do mean “take.” Only a fool would believe that, if the GA is given the go-ahead to dip into those funds once by putting employees on the hook for what they failed to fund over the years, they won’t be back again and again until nothing’s left. That was the whole reason for that language being in the Constitution in the first place.
- Calhoun Native - Thursday, Oct 27, 11 @ 3:17 pm:
The money side of the equation seems to be the only consideration. There will be an exodus of experienced employees if SB512 passes. With hiring non-existent and layoffs in the mix, those that are left will not be able to provide services at the current level. The smaller government crowd wins without lifting an organizational finger in Illinois.
- Rich Miller - Thursday, Oct 27, 11 @ 3:26 pm:
===only that Cross said he had his 30.===
That’s what they’re referring to. Also, there’s considerable doubt the bill will be called at all.
- Dirty Red - Thursday, Oct 27, 11 @ 3:29 pm:
I can imagine.
- sal-says - Thursday, Oct 27, 11 @ 3:44 pm:
Just more continuing IL political disfunction.
The ‘leaders’ involved can’t even agree on what was said.
Great for all of us, eh?
- dupage dan - Thursday, Oct 27, 11 @ 4:19 pm:
As a state employee, I will not be happy having to pay more into my pension program than I am now. Who would be? I can rail about how the GA and the GOVs have failed to insure that enough funds are there to cover the pensions and all the rest.
It is important to remember that we elect these officials. Many citizens continue to demand more services than the state can afford. Many pols can’t resist promising more than the state can deliver.
It is small comfort that “we have only ourselves to blame” for this predicament. None of that matters now, really. What does matter is getting our fiscal house in order. Very few people are going to be able to say that they don’t have to sacrifice something in order that we get straight with the fiscal gods. Life is unfair, deal with it.
Am I some altruistic doormat? No. I am pissed. However, I am fairly close to retirement and won’t have to bear the pain for too long. Will these changes reduce the quality of state employees who come in under the different programs? I don’t know.
- vandalia - Thursday, Oct 27, 11 @ 6:23 pm:
Dupage Dave
I couldnt have said it better. After 24 years I now am expected to pay for the mistakes made by our so called leaders. These people never cease to amaze me.
- Peter Snarker - Thursday, Oct 27, 11 @ 6:33 pm:
As a younger employee I have zero faith tjey will fund this pension for 35 more years. Give me my 6% cash money 401k match now, thank you very much.
- CicularFiringSquad - Thursday, Oct 27, 11 @ 7:21 pm:
It seemsPQ is acting more Blagofian every day
Wonder why he did ask for free rides for seniors too.
- Michelle Flaherty - Thursday, Oct 27, 11 @ 7:24 pm:
And Peter illustrates why it will cost a lot more (initially) to do 512. If you look at the details there’s no incentive to go to Tier 2. If you can afford to stay in Tier 1 you should because the benefits are golden. And the matching deal on Tier 3 is much better in the long run than Tier 2.
Keep in mind the state still has the massive unfunded liability. The more people who shift to Tier 3, the faster the state has to come up with the matching money plus paydown the unfunded liability. Oh, over 30 years it’ll save a bundle, but over the next 10-15 it’ll make the current pension fund strains look manageable. And clearly we’re having no trouble managing the current contributions.
- Roadiepig - Thursday, Oct 27, 11 @ 7:54 pm:
In watching both of Cross’s videos I get the feeling even he doesn’t know for sure what he is pushing thru- does it take effect in July 2012 or July 2013? Doesn’t matter- in my department hiring was all but frozen between 1985 and 1999. Almost everyone who can get out from the earlier group (yes, we are in the 2.5% system) have either left or will leave real soon. Almost everyone hired after 1999 were over the age of 50 when hired (save paying them big pensions, right?). Many of those will be leaving before they reach the 20 years to get their 2.5%, meaning the SERS will have to cut them a check for the difference between 1.67% and 2.5% when they leave. Ad to that they have only hired 2 new employees in our division since Ryan left office, even though 10+ people have retired since that time. The contributions from existing workers continues to drop due to a much smaller head count. Any major change in the future pension benefits will cause even more people to leave early. I don’t know what the answer is, but I know I will be leaving before the GA does something that changes the rules. Multiply that by the number of people in each and every state department and Tier 1 dies before the first review 2-3 years from now….
- Wickedred - Thursday, Oct 27, 11 @ 8:04 pm:
If they want to address the pension system, are they going to do something about their own? We have legislators who are going to draw 3 separate pensions when they leave the House or Senate. And you complain about state employees receiving a pension they pay into, that has been underfunded by these same people? Wow.
And Madigan, yeah, he’s a normal working class kinda guy. Coming after labor after he’s had their support for years.
Sorry, but I have been working my behind off for going on 20 years now and I’ve earned my measly pension that I hope to still get. I’ve paid in and will continue to pay in. I don’t get a say on the pension for people who work outside of state service, they shouldn’t have a say on mine. I put my money in. I’m a taxpayer. Walk my walk and then come back and say I don’t deserve it.
But seriously, they should not allow a legislator to serve 2 years and get everything that they get. People need to open their eyes at where the money is truly being mis-spent. Make those that worked in multiple places have to choose which state pension they are going to take.
- foster brooks - Thursday, Oct 27, 11 @ 8:05 pm:
Tier 1 employees could be paying close to 50% of their salaries in the systen 12 years from now if people leave in droves.
- Peter Snarker - Thursday, Oct 27, 11 @ 8:51 pm:
And what will I do with my 401k? Why maturally, invest it in the companies run by the Civic Club types.
- Jack - Thursday, Oct 27, 11 @ 10:06 pm:
I wouldn’t invest in the civic club companies. Look at them: Sears, recently bankrupt, Tribune, nearly bankrupt, Goldman Sachs, bleeding heavily, Motorola, on the ropes and had to split in two. These aren’t good companies and shouldn’t be advising anyone.
- Jack - Thursday, Oct 27, 11 @ 10:30 pm:
and oh yes, Citadel, declared bankruptcy after buying ABC radio and Bank of America, stock has sunk drastically, because of their debt load.
The Chicago Civic Committe membership is like a who’s who of how to fail at business. But I guess they still have stock holder money to throw away on causes like this.
- Yellow Dog Democrat - Friday, Oct 28, 11 @ 8:19 am:
How demoralizing for public employees.
- wordslinger - Friday, Oct 28, 11 @ 8:57 am:
A little more on this CME proposal after thoughtful conversation and 12-ounce elbow curls yesterday at the Skyride behind CBOT with some trader types.
The current proposal, as far as it can be understood, is to limit corporate income taxation to the (alleged) 27.5% of income derived from open-floor outcry and trades conducted and cleared within the state of Illinois.
Let’s be clear about one point: there is not today, nor has there been ever, nor is there proposed, any tax on transactions. Leo Malamed, Tom Donavon and Rosty carried the water for the exchanges for a long, long time, an nobody ever got to put a tax on transactions. They’re talking about income.
But consider what else they’re talking about.
By limiting taxable income to trades conducted on the trading floors, or in cubes just off the trading floors, or to offices on LaSalle Street, Cullerton and Emanuel are proposing a powerful, job-killer incentive to conduct trades from outside the state.
Under Cullerton’s proposed deal, it is in the interests of CME to take and clear trades from out of state and to limit the amount of business it conducts within the state of Illinois.
In other words, the Senate president and Mayor Emanuel are proposing that the State of Illinois enact law precisely geared towards limiting economic activity in the state, killing what jobs there are on the trading floors, and reducing state revenues derived from the a wildly successful business model that’s been operating here without a bitch for 100 years. This is what the leadership of the Democratic Party is proposing.
Have we all lost our minds? We’re in the new age of the Robber Barons, the Grey Wolves, and we better wake up before they steal the hot stove and the smoke, too.