Burying the lede
Wednesday, Apr 18, 2012 - Posted by Rich Miller
* Speaker Madigan again voiced support yesterday for shifting employer pension payments away from the state and onto universities and suburban and Downstate schools…
“If you look at the current (state pension) payment, 78 percent of the payment goes to two systems where the members never worked for the state of Illinois,” Madigan said, referring to the Teachers Retirement System and State University Retirement System. “There’s got to be a sharing of the cost.”
Downstate school districts fear that shifting pension costs to them will force serious cutbacks in other areas, including education programs.
* But I’m pretty sure this part is new…
[Rep. Elaine Nekritz], Madigan’s representative on a working group trying to control pension costs, said that if overall pension costs can be reduced, the expense to school districts may be 1 percent to 1.5 percent of their payrolls. She said many districts should be able to absorb that cost.
Man, they’re going to have to make a whole lot of cuts to get costs down to such a low percentage of payroll.
…Adding… Speaking of pensions, Speaker Madigan’s constitutional amendment to require a three-fifths vote before pension benefits could be increased apparently wouldn’t have stopped any pension sweetener in the past…
Henry Bayer, executive director of AFSCME Council 31, says a review of pension votes over the years shows none of them were close.
“If this amendment had been in the (Illinois) Constitution, those benefits would have passed with those votes. Thankfully, it would not have prevented those benefits from taking effect.”
* Check out the last two sentences…
Local legislators and economic development officials agree enterprise zones are a valuable tool to attract and retain business.
The zones are in jeopardy of expiring unless the Illinois General Assembly acts.
State Sen. Darin LaHood, R-Dunlap, said something dire concerning enterprise zones just may come up. LaHood said he is supportive, but hears Illinois Speaker of the House Michael Madigan is not.
“In the Senate, I think, it will pass by a large majority,” LaHood said. “There could be a problem in the House. I’ve heard Madigan wants to let them all expire and then turn it into a lottery.”
I hadn’t heard that one, but interesting.
* And this is an SJ-R Tweet posted during Chamber of Commerce CEO Doug Whitley’s introduction of Wisconsin Gov. Scott Walker yesterday…
Wow. Whitley just said Quinn has “socialist tendencies.”
But nobody actually covered the over the top quote except for Illinois Issues’ blog…
Even our governor, who as most all of you know, has had very liberal tendencies, very socialist tendencies for years. Even some might say radical tendencies.
Um, OK. Wow.
But Whitley did go on to say this…
A month ago [Quinn] stood up and gave a budget message that was not too much different than what you and I and the Illinois chamber would like to hear our chief executive officer talk about.”
…Adding… Chris Wetterich explains why the quote wasn’t used…
I asked Whitley about the “socialist tendencies” charge after Wisconsin Gov. Scott Walker’s speech, but it got whacked from the story I filed. He claimed he was trying to compliment Quinn, however backhandedly it may have been.
“What I was saying is that I think Governor Quinn has grown in this job,” Whitley said. “I think he’s saying things today that I did not anticipate or would not have anticipated him to say five or 10 years ago. He’s talking about jobs. He’s going to plant openings. He’s trying to change the fiscal and budgetary issues of the state, which I don’t think he was particularly conscious of in his prior roles. It’s not the same Pat Quinn that was in the peanut gallery for years.”
- wordslinger - Wednesday, Apr 18, 12 @ 11:59 am:
–Even our governor, who as most all of you know, has had very liberal tendencies, very socialist tendencies for years. Even some might say radical tendencies.–
What a clown. Every big business in the state has its hand out for taxpayer money, but they’re not socialists.
How’s this for radical? A state chamber of commerce that actually promotes Illinois business, rather than honoring mouth-breathing Cheeseheads dedicated to poaching Illinois businesses with socialist, government investments.
- Nobody else - Wednesday, Apr 18, 12 @ 12:07 pm:
Should comment. That really said it all.
- Nieva - Wednesday, Apr 18, 12 @ 12:11 pm:
If the proposals Madigan has suggested are pushed through and the south has to increase property taxes to the levels of Chicago and the collar counties many of the poor and middle class that are able to own homes now will be forced to sell and revert to renting or living in low cost public housing. I know for a fact when property taxes start pushing four to five hundred dollars per month many that are on the bubble now will fold. 5 grand per year is 15 to 20 percent of the average income in Southern Illinois. I don’t know the answer to this prolbem but this will just cause more prolbems.
- Judgment Day - Wednesday, Apr 18, 12 @ 12:13 pm:
Re: Enterprise zones
Yes, but if I have to choose, I’d keep the enterprise zones and get rid of the TIF Districts.
You only get an enterprise zone abatement if you add/expand your business. So there’s actual physical benefit to the community.
All that being said, enterprise zones are miserable to administer (all that paper!).
Madigan should keep the enterprise zones, and get rid of TIF (Tax Increment Financing). In too many places, it’s a scam on both the taxpayers, and the other (non municipality) tax districts.
- Judgment Day - Wednesday, Apr 18, 12 @ 12:23 pm:
Re: School Pensions.
“…1 percent to 1.5 percent of their payrolls”
Seems pretty improbable. As I remember from a thread last week, something like 54+% of TRS annual pension benefits were going to be under $49,999 per year, while not quite 45+% of TRS annual pension benefits were going to be over $49,999 per year. That’s a pretty high ratio (maybe not for teacher pension funds, but for most other pension funds) of benefits being paid out.
Certainly the TRS ratio is higher than IMRF, and as I also remember, annual IMRF property tax funding by units of local government is a fair amount higher than 1 percent to 1.5 percent of their annual payrolls.
I guess it all depends what additional expenditures are being including in “annual payroll” expenditures.
- cermak_rd - Wednesday, Apr 18, 12 @ 12:33 pm:
If Chicago can fund its own pension system, I think every where else in the state can fund its own as well. However, I think there’s going to have to be a bridge to get there. Say the state will pay x% at first and then after y years, it will pay z%…etc. until we get to the local district paying 100%. Of course, to get there, x y and z have to be determined, but that’s why our crack legislators earn the big bucks.
- Judgment Day - Wednesday, Apr 18, 12 @ 12:38 pm:
It’s currently (under the Property Tax Code as it currently exists) impossible to increase property taxes to the levels of Chicago and the collar counties.
The numbers just won’t work. Example: Areas outside of the Collars & Cook generally see in the 67% - 72% range of all their tax dollars going to education. There are some exceptions (areas inside some municipalities), usually that’s correct.
Most school districts are already at or near their maximum rates on their funds (except for IMRF, which has no max tax rate), so unless the state legislature gives school districts new added property taxation authority (a new tax rate), there’s little room for increase.
Also, property assessments (valuations) tend to be substantially lower (i.e.; property values are lower, so assessments are lower), so the taxes can’t get to Cook/Collar County levels without substantive law changes otherwise known as ‘tax increases’.
Now, let’s do this all in an election year?? - and the changes being made at the state level would be to increase local property tax increases???
Interesting sets of votes there - if they actually occur.
- Shemp - Wednesday, Apr 18, 12 @ 12:45 pm:
Madigan opposing E-Zone extensions proves that not only is he crooked, he’s incompetent. Illinois has some of the fewest development incentives around, and locals have even fewer. Aside from TIF and Ezone, we have next to nothing to offer developers at the local level (except sales tax rebates to retailers).
It’s bad enough DCEO is the least competent development agency in the Midwest, but to take away one of the last things locals have? Dereliction.
- Pot calling kettle - Wednesday, Apr 18, 12 @ 12:46 pm:
How are university employees people who “never worked for the state of Illinois”?
With respect to K-12 and CC employees, I would be more open to the suggestion that the local districts should share the cost if: 1) the state paid its funding obligation to the districts, and 2) the districts were given a voice on the retirement benefits.
- Robert - Wednesday, Apr 18, 12 @ 1:57 pm:
==Madigan’s representative on a working group trying to control pension costs, said that if overall pension costs can be reduced, the expense to school districts may be 1 percent to 1.5 percent of their payrolls.==
Hard to imagine that Madigan/Nekritz’ math is correct. I wonder what the total annual teacher pension payout is statewide relative to total annual active teacher compensation is statewide.
- D.P. Gumby - Wednesday, Apr 18, 12 @ 2:15 pm:
I love the idea that, now that the State is so far behind in paying state universities the money appropriated for them, the GA can say all the people working for the Universities are not state employees! What a crock…every check I got while working at a state university came from the state…and what about those state ethics tests??
Now, as to the bandying about of “socialist”–those using the word obviously failed basic political science as there has been nothing socialist in the U.S. since Bernie Sanders became an “independent”.
- Concerned Professor - Wednesday, Apr 18, 12 @ 2:28 pm:
Can someone explain how working for the University of Illinois does not constitute working for the state?
- steve schnorf - Wednesday, Apr 18, 12 @ 2:38 pm:
For most of us downstate it would be very hard for our property tax rates to rise to the level of Chicago’s’ primarily because theirs is lower than ours.
- kerfuffle - Wednesday, Apr 18, 12 @ 2:48 pm:
I would really like someone to explain to me how it came to be that downstate and Chicago teacher pensions came to be funded differently.
- Ahoy - Wednesday, Apr 18, 12 @ 3:16 pm:
–Speaking of pensions, Speaker Madigan’s constitutional amendment to require a three-fifths vote before pension benefits could be increased apparently wouldn’t have stopped any pension sweetener in the past–
Maybe the Constitutional Amendment should be that the State cannot dictate the pension benefits for pension systems that it does not wholly fund (police and firefighters and soon to be teachers and university employees). One of the biggest issues is the State passing unfunded mandates onto municipalities. We don’t need to create the same problem for our schools that we have created for our cities.
- GA Watcher - Wednesday, Apr 18, 12 @ 4:29 pm:
I’m surprised that Representative Nekritz seems in her comments to be resigned to the fact that the cost of future TRS pension benefits will be transferred from the State to school districts. Doesn’t her district include schools which place fairly high property tax burdens on her constituents now?
- GA Watcher - Wednesday, Apr 18, 12 @ 4:43 pm:
Kerfuffle: if memory serves correctly, I remember former Senator Art Berman telling the audience at an education seminar several years ago that the downstate and Chicago pensions came to be funded differently as a result of the original deal on the school aid formula. The quid pro quo to get suburban and downstate legislators to agree to a formula which essentially gave more State funds to Chicago’s schools was to have the State pick up the cost of suburban and downstate school district pension benefits. This happened when Richard J. Daley was Mayor of Chicago.
- El Conquistador - Wednesday, Apr 18, 12 @ 8:17 pm:
@concerned professor
Look at your paycheck and W2. You’re not paid or employed by the State of Illinois. Your pension different and seperate for this same reason. You are the employee of a university endowed and subsidized by the state. The state should have never been paying your employer’s pension contibution and there never was a requirement for the state to do so. So, there’s no law to change to push the payments to the university, only a budget line item. Same for K-12 downstate teachers.
- zatoichi - Wednesday, Apr 18, 12 @ 8:42 pm:
Local school district is looking at slightly over $4M in pension payments if the pensions are pushed off to the locals. School board already publicly looking at options such as dropping sports/band/other extra, drop specialized classes, class sizes over 30 and eliminating positions because they have to tell the local tax payers what will happen. Of course once this happens the state will be paying all those local districts on time and in the full amounts. Right? No state income tax increase needed. Any new taxes then are local tax increase even though, in the end, all taxes come from the same payer source.