81 Comments - Sunshine - Thursday, Jan 10, 13 @ 10:23 am: Any reasonable and fair pension reform must include judges. It should also include a tax as all citizens are responsible for letting our legislators put us into the mess we are in today. Perhaps then more folks will start paying attention….well, I can hope! - CircularFiringSquad - Thursday, Jan 10, 13 @ 10:24 am: Gosh, NoTaxBill sounds lamer than usual — if that is possible. If this guy had won there would have been no money and no love for the work force No he is worried about kicking the work force around. Fire, Aim, Ready - onceadeomocrat - Thursday, Jan 10, 13 @ 10:24 am: Maybe our elected lawmakers should take a hard look at cutting their own over inflated salaries they earn for doing a dismal part time job…. - wordslinger - Thursday, Jan 10, 13 @ 10:28 am: –“I don’t see any progress on the governor’s ability to do anything.” (Bill Brady). He certainly can’t vote in the GA. The players in the General Assembly have been around for decades. I seriously doubt that they’re all waiting for the guiding hand of Pat Quinn. To make things easier, Cullerton and Madigan should just put together something they can agree upon and sell to their caucuses. It would be nice to have some GOP support, but not crucial, obviously. Let Quinn announce it and take credit for it. There are no limits to what you can accomplish if you let the other guy take the credit. - Johnny Q. Suburban - Thursday, Jan 10, 13 @ 10:31 am: Brady’s comments regarding Quinn and “sticking a needle in the eye” of the unions is quite interesting. The conservative Republican is chastising the Democrat over treatment of unions. Who’da thunk it. - Nieva - Thursday, Jan 10, 13 @ 10:36 am: I have been retired for two and a half years now. I don’t support any reductions to my current check or raises. The state spends money like a college student with their first Master Card. Pay your bills before you give money away to every feel good program out there. Most if not all are a waste of time and money. - RNUG - Thursday, Jan 10, 13 @ 10:41 am: The papers have a point. Just scrap SB0001 and HB0098. Introduce each individual idea as a separate bill. I realize there are some items, like increasing contributions in exchange for a guarantee the State will make the payments, will have to be combined … but keep the bills simple, just one or two items. Then it will be easier to see the +/- of each item. Vote each one up or down. You might actually pass enough small steps to make a difference. And if that isn’t enough, then try to get a “comprehensive” bill nobody will like but might vote for. And yes, I realize from a political perspective, this would take a lot of the “bargaining” items off the table but it might also prevent horsetrading for support of really questionable items. I’ll take the rose colored glasses off now … - Bill - Thursday, Jan 10, 13 @ 10:42 am: Brady’s right. We need to start working together to address our fiscal problems. The main problem, aside from being unconstitutional, with all the pension bills so far is that there is no revenue attached. The cost shift could be considered additional revenue but there was no assurance that that revenue would not just replace the state revenue. They could bond out some, pay some, get the employees to pay some, get the corporations to pay some, dedicate some new streams, and so on. They could flatten the ramp, lower the required funded ratio, etc..Tier two employees pay the entire cost of their benefit and then some. The problem will diminish over time. I realize that this won’t satisfy the frenzy to hurt public employees but it will work toward a rational solution. - Esquire - Thursday, Jan 10, 13 @ 10:42 am: Sunshine is on the money as to judges and their generous pension perks. So many lawyers aspire to assume a position on the bench because the pay has been greatly improved and the pension benefits kick in quickly. It has not been uncommon in recent years to see recently elected or appointed judges to bow out after serving a single term or, in some cases less. Another gimmick is the elevation of soon to retire judges to the appellate court level. The new justices bow out gracefully after a short term on the intermediate court and their pensions are spiked to a higher level of service. Government pensions have to be tied to real world concepts — you earn pension benefits based upon years of actual service and you do not get to take multiple pensions or qualify for higher benefits based upon a few months of service at a higher pay grade. Wake up voters! The legislature has made all of these games legal. It has to be stopped. - geronimo - Thursday, Jan 10, 13 @ 10:53 am: The bills as proposed went nowhere because thinking people (or really MORAL people–and apparently there might be some in our legislature) know that penalizing state workers and retirees for plundering the funds they trusted them with is morally wrong. Since everyone in this state benefitted from the looted money, it is on everyone’s back to pay the money back. The logic of the current legislation is the equivalent of throwing the crime victim in jail and letting the perp walk free. The population at large are not victims………they were the beneficiaries of the theft. The only fair solutions are a revised pension ramp, revised state tax structure, closing some corporate tax loopholes…..there are many ways ad nauseum that have been proposed and are much more logical and fair but DO include all of us. - the Patriot - Thursday, Jan 10, 13 @ 10:54 am: Why not just pass a sales tax. Madigan refuses to endorse cuts and is going to keep dolling out money to so the people who refuse to work will keep voting democrat. the voters of IL lack the capacity to vote for republicans so just eat it. Rich spend more, so they pay more. Property owners don’t get a disproportionate bill like a cost shift to schools districts. If you are not willing to cut every line of the state budget 10-15% this year, this is the only fair solution. You can’t cut judges because if violates separtion of power. Not to mention the reality is we already have a problem getting qualified people to run for judges because their salaries do not keep pace with top shelf attorneys. If you want to cut judges you will end up with a lower quality judiciary. Considering how the Executive and Legislative branches are doing, can we afford to tank the Judiciary as well? - Jimmy - Thursday, Jan 10, 13 @ 10:57 am: “When you are sticking a needle in the eye of the state’s biggest union on a contract negotiation, and trying to negotiate this, you see the kind of results this governor gets,” he said. Is Sen. Brady talking about threading the needle with AFSCME or advocating that Quinn exchange pay raises and other benefit increases for pension reform concessions? - Frenchie Mendoza - Thursday, Jan 10, 13 @ 10:59 am: Brady, of course, would have done the same thing — stick a needle in the eye of the union — but the only reason he’s saying it is because, like everyone else, he sees the bitter irony of a democratic governor sticking the needle in the eye of the union. It is weird, and it’s one of the weirder things I’ve seen recently — especially when Quinn was working the picket line for John Deere several months ago. That said, one does wonder why Quinn chose to sabotage long term pension reform with his (again, weird) war on the state’s largest union. I understand that Quinn’s doing it out of principle — the idea that no one is going to get scalped (ugh) but that everyone will get a haircut. I get that. But surely there must have been — or perhaps still is — someone close to Quinn saying, okay, we get the principled stand, but it’s probably time to choose the long term over the short term — especially since the union contract will be negotiated again (!) in a couple years. In other words, why not try to pace the union busting in order to push the pension reform through now? Save the union stuff for later. Or take the needle — slightly — out of the union’s eye, give a little bit, and understand that, yes, we all get the principled stand of “saving money at all costs” — but if nothing gets done — then zero savings is a lot *less* than some savings. Plus, the union is (apparently) itching to strike. And how, exactly, is brinkmanship on the union contract going to help rational planning in the pension reform department? I mean, the union goes on strike — or comes close to strike but still gets a big bruise — how could that *possibly* assist in putting together a pension reform deal? It’s all tied together — maybe not legally, but certainly socially. And the war for both is being waged on the same group of people — current and retired state workers (who, by the way, are also tax payers — just like everyone else.) It’s almost like what Quinn really needs is someone who’ll look him in the eye and say, okay, we all understand the righteousness of a principled stand — but forget about that and let’s get some stuff done. - Anonymous - Thursday, Jan 10, 13 @ 11:05 am: Brady’s point about the unions is correct. Quinn would do better to have renewed the old contract for a year, just so it was settled, and then invited the unions in to make a proposal for pensions. Union members know there will be no raise and that health premiums will go up, but demanding that employees suddenly swallow up to $300 per month in additional benefit costs, while shouldering more pension costs, makes a bad situation worse. If you are a frontline worker, you are probably making $40,000 or less. You cannot afford to give up 10% to 15% of your pay. - Rich Miller - Thursday, Jan 10, 13 @ 11:05 am: ===You might actually pass enough small steps to make a difference.=== I agree. At least start to do something. - Cindy Lou - Thursday, Jan 10, 13 @ 11:07 am: Hmmm, so the goal is ‘just do something’? Just any ol’ thing? No consideration as to if it holds up in court as constitutional, cuts retirees off to raising cost, damages retirees from possible lack of funds to eat, medicate, and shelter….oh, what the heck, right, ‘just pass something’. Every one of the ’solutions’ so far (except Madigan’s cost shift) put the pain and giving up onto the workers/retirees. Cullerton wants to give choice. Well, if one considers cohersion a ‘choice’. And there is nothing in his “choice” to assure retiree their possible chosen health care they’ll need won’t be priced totally unaffordable. House plan was to ’starve’ retirees for six years and then toss them a few peanuts. Rather reminded me of hoping we’d all die before the six yrs ended. Most cringe at any thought as to extending the tax increase, yet squeall ‘the cccchhhiiildren’s education’ welfare, social services will suffer due to lack of available funds. Most can’t bring themselves to consider additional revenue sources such as service taxes. Nope. All the ‘just do something’ seems to be rob the retirees. It’s easy, just build a backbone, take the ‘hard vote’ and stick it all on retired state workers/teachers blah blah blah. While I’ll agree something has to be done, the ’solutions’ so far have been one totally one sided and narrow minded directed with a huge target aimed right at the state worker/retiree. That’s not a compromise nor a solution…that’s robbery. Again, just my 2 cents. I get an opinion, just like everybody else. - Jimmy - Thursday, Jan 10, 13 @ 11:08 am: Patriot - Illinois did cut judicial benefits when they created the Second Tier for pension benefits. - dupage dan - Thursday, Jan 10, 13 @ 11:13 am: Counting on the freshman to energize the move towards pension solvency. Good luck with that. I don’t doubt their ability or sincerity. I worry that the entrenched positions that already exist may well be too much for the new crop to overcome. We can see a bit of that with some faulting Gov Quinn for the failure before and during the lame duck session. No doubt Quinn could be a hindrance but hardly the insurmountable barrier suggested by some. Prepare a logical bill addressing constitutional concerns, pass same in the GA and get it in front of the Gov. Blame him then ONLY if he fails to do his part. Or you can sit on your arses and blame the GOP, Quinn or the snake. The next election is 2 years off - you got plenty of time, right? - Easy Living - Thursday, Jan 10, 13 @ 11:16 am: There’s just a overall lack of revenue all around for the State to meet the pension obligations, pay the vendors in a reasonable amount of time, etc. It’d be prudent to take the new legislature’s temperature on a graduated income tax on retirees as part of the solution. We still reap all of the benefits of the State’s services but pay nothing for them. - walkinfool - Thursday, Jan 10, 13 @ 11:18 am: Sen. Brady is ridiculous. Rather than getting behind any of the reforms, or coming up with his own, he just takes another opportunity to prepare a run against the governor. The editorial comments are spot on. @Word: I hope you are right, that Madigan and Cullerton can pull this off. They should work on it more forcefully. I just don’t think the total available votes exist on one side of the aisle without help from the other. Some people just won’t move, regardless of the pressure or the arguments. Cross has to deliver more than personal support. - wordslinger - Thursday, Jan 10, 13 @ 11:21 am: –Madigan refuses to endorse cuts and is going to keep dolling out money to so the people who refuse to work will keep voting democrat.– Is that how it works? I must not have been paying attention the last few budget cycles when they were swinging the ax at education and Medicaid. Must be a lot of people who “refuse to work” with those Democratic super-majorities. You must be on to something, or maybe just on something. - cassandra - Thursday, Jan 10, 13 @ 11:23 am: Well, actually, Quinn doesn’t have plenty of time. He may have only until his party’s primary early next year-a nanosecond in political time. It’s a dilemma. If nothing happens, he gets blamed. If something happens, he gets blamed by the groups that get dinged. That could include public employee unions, the broader groups of state retirees, downstate and suburban communities who might get “cost-shifted,” the list goes on and they’re not puny groups. For PQ, the session that just ended may have been his last best chance. Life is unfair. - Meaningless - Thursday, Jan 10, 13 @ 11:25 am: I have to say that this whole pension reform issue is really frustrating, demeaning, and appalling to any person living in Illinois that has any common sense. A simplistic rational format for solving this would be to get the political leaders together with representatives of the pension stakeholders and hammer out an agreement that is “balanced” and everyone could live with. I think this is what used to be called a consensus. “Every” party to this issue wants something resolved in a “Fair” and “constitutional” manner. Well … maybe not everyone! I guess I’m dreaming too much and still living in that fantasy world! - Johnny - Thursday, Jan 10, 13 @ 11:28 am: What I find absurd about this whole pension debate is that public employees are being attacked for a pension system they didn’t create, but then aren’t given some kind of opt-out option. You can force someone into something and then criticize them for being in it. - mythoughtis - Thursday, Jan 10, 13 @ 11:28 am: I agree that each individual idea should be a separate bill that can be considered on its own merits and its own constitutionality. Why don’t they come up with something for teachers that would be only be for NEW teachers… a tier 2 concept: shift those NEW teachers pensions to local school boards, require them to be Social Security eligible, which will reduce the pension amount down the road. That way the school boards gradually become responsible for their teachers pensions. For existing teachers, freeze the state pension earned(including service years) as of the effective date of the bill. Immediately vest those teachers in a new locally funded pension plan. Any future years of service goes to the locally funded plan… whether that is 1 year left in a career or 20. So a teacher with 30 years already gets a 30 year pension from the state, and if retiring year later, gets a 1 year pension from the local fund. Yes, I know that we normally require 8 years, but they already did 8 years, and shouldn’t have to do 8 more in the local fund. - Johnny - Thursday, Jan 10, 13 @ 11:29 am: Sorry….I mean’t CAN’T force someone… - Rusty618 - Thursday, Jan 10, 13 @ 11:33 am: Time for that summit with AFSCME. They might actually have some good ideas. The constitutionality of the proposal could be avoided. And a possible strike could likely be avoided also. Give it a chance! - dupage dan - Thursday, Jan 10, 13 @ 11:33 am: walkinfool - still blaming the GOP even tho the dems have total control with powerful majorities in the GA. Howsabout we see what the dems do first before blaming it on the GOP? Really, now, what is the point of seeking such power unless you desire to wield it? - Leave a Light on George - Thursday, Jan 10, 13 @ 11:41 am: = It’d be prudent to take the new legislature’s temperature on a graduated income tax on retirees = Talk about unconstitutional!! You can’t single out one group for a special income tax silly. - Former Merit Comp Slave - Thursday, Jan 10, 13 @ 11:42 am: I still like Nekritz’s bill, now introduced in the 98th as SB35 and HB98. And for comic relief, see HB92 which cuts General Assembly out of the pension systems entirely and HB93 which reduces elected officials salaries by 10%. - langhorne - Thursday, Jan 10, 13 @ 11:44 am: i have been retired for two years now. i did so in significant part based on the automatic annual increase (which we just got jan 1, thank you for not attacking it sooner), and the free health care. now some of the proposals wipe out my increase for years, or forever. i understand health care is not covered in the diminishment clause, so i expect to take a shot. i am waiting to see how much. as those talks come to an impasse, that will be the next IED along the road to “reform” when the amounts are set. i cant tell if the admin approach will be that the longer you worked, the less you should have to pay. or, you worked hard and long so your retirement is a little above average, you can afford to pay more than someone who started later and advanced slower. (see little red hen) leave the judges out, for now. leave the cost shift out, for now. cullerton’s choice approach (you wanna be hung or shot?), has the best chance of being constitutional, so go that route. soften the impact w several of the suggestions already outlined–lower the ramp, increase employee contribution, etc. more revenue may still be needed, if not for pensions, then for overdue bills. expand the sales tax base. consider taxing maybe just half of retirement income. a baby step approach, or splitting the proposals into several pieces, increases the chance of an incoherent result. but they have to do something. - Former Merit Comp Slave - Thursday, Jan 10, 13 @ 11:44 am: See HJRCA0002 on the graduated tax - In the Tank - Thursday, Jan 10, 13 @ 11:47 am: News from Decatur that the Herald & Review missed: Reps Bill Mitchell and Adam Brown rode the IEA bus to the Capitol with teachers opposed to pension reform. Word is that they addressed them citing passages from Profiles in Courage. - Irish - Thursday, Jan 10, 13 @ 11:56 am: Maybe baby steps is the answer. But if it is I would like to see the following. I would suggest that Governor Quinn and the four leaders do the negotiating. First I would like to know what the target amount of money is. In other words what amount needs to be saved per year to make the pension systems solvent by what target date? And don’t give me this 100% funded BS. Most of the pension experts who are not employed by state officials have said that the funds could be solvent at a much lower precentage. So don’t pick 100% to make the situation look worse than what iit is just to scare people into buying your position. Pass a bill that lowers the ramp. Second, go to the unions and sit down and explain the above HONESTLY. Let them think about it and come back with a proposal to meet that goal and to suggest any other savingts that could free up money for other things like paying bills. After all they came up with $400 million the last time you asked. And Governor they even suggested more savings that you didn’t want to use. Some ideas are, put a moratorium on all grants, cut CMS budget the same amount as you cut all the other agencies, put a moratorium on all big business handouts, (since they are the ones complaining about the states fiscal situation they won’t mind helping to solve it, and close corporate loopholes so they are paying some of their share. Once the union has made it proposal, take it and figure the savings it will generate. Have a press conference and give all the figures to the media and the taxpayers. Accept the offer and implement it. Then explain how close you are to your target amount and then get back to work on it. You could go on to pass the gaming bill and stipulate that all the money generated would go to solving the pension issue. This frees up other money to pay bills and fund education. Also pass a bill that penalizes local school districts that increase an employees salary more than 1.5% more than the CPI, in the last four years of their employment. The penalty could be a reduction of their state aid. That’s how you fix this. - Cook County Commoner - Thursday, Jan 10, 13 @ 12:06 pm: State judges will never be included in pension reform. The unions will file suit against all pension reforms, and, if the judges are included, they cannot hear the case due to a conflict of interest. But by excluding judges, it appears likely that no reform would pass constitutional muster, which is really what the union and legislature want. Let’s be real. The judges will do a tap dance and say they can rule on the constitutionality of pension reform because it doesn’t involve them. But they know sooner or later that any reform they approve will be visited upon them. So, no deal on anything. The only near-term meaningful pension reform will come from agreement with the unions or amendment of the state constitution. Neither are likely. So we wait it out until external forces pummel Illinois, like bond raters and employers. - concerned - Thursday, Jan 10, 13 @ 12:07 pm: I am agreeing with “my thoughts”. Try to pass separate bills that may not solve everything in one bill but moves this problem in the right direction. At least “my thoughts” had some ideas that I haven’t read. About like getting new teachers into a local board and into the social security system. And freezing current employees and moving them into local systems. Let’s put our heads together and keep ideas flowing. One of our state leaders may read them and try to work with them. From what I can see they are stuck on some old ideas. - the Patriot - Thursday, Jan 10, 13 @ 12:07 pm: Yes, they did cut Judges on the two tier issue. I should have clarified. They can’t cut sitting judges and they should not cut judges at all going forward. - Leave a Light on George - Thursday, Jan 10, 13 @ 12:10 pm: Am I completely off base? I thought the opportunity for a graduated income tax was lost when voters refused to open the state constitution during the last primary(?) elections. - RNUG - Thursday, Jan 10, 13 @ 12:18 pm: George, I believe the GA can always pass a specific constitutional amendment proposal and present it to the voters for ratification or rejection. The “20 year Con-Con” is the opportunity to kick the door wide open on any and all subjects without the GA. - Ruby - Thursday, Jan 10, 13 @ 12:19 pm: Voters could still approve a constitutional amendment for a graduated income tax with three-fifths of those voting. - dave - Thursday, Jan 10, 13 @ 12:43 pm: **Madigan refuses to endorse cuts and is going to keep dolling out money to so the people who refuse to work will keep voting democrat.** Umm…I’m pretty sure you don’t know anything about Madigan or what has happened over the last few years on budget issues. There have been massive cuts all over the place, including the largest Medicaid cut in the history of the Mediciad program. In the entire country. - Sgtstu - Thursday, Jan 10, 13 @ 1:06 pm: Rich, I guess I was just ahead of my time last week when I stated “two heads are better than one”. Seems most all of these post think that trying to work something out with the union is a good idea. - sal-says - Thursday, Jan 10, 13 @ 1:24 pm: Just curious. Not long ago the deficit was $85B; now about $97B. And, the daily tally increase was $12M; now about $17M. Caused by the new accounting rules??? Where do these numbers come from? - RNUG - Thursday, Jan 10, 13 @ 1:46 pm: Think that jump resulted from a slight lowering (-0.5%) of the assumed rate of return on future earnings. - steve schnorf - Thursday, Jan 10, 13 @ 1:57 pm: They could try these “baby steps”. One, a pensionable salary cap. Two, increased employee contributions. Three, cost-shift the TRS and SURS piece over some reasonable period of time. Four, apply to the pension problem the amounts currently being paid toward pensions notes and bonds as those obligations are paid off. Tip of the hat to Reps Fortner and Nekritz, and to Rep/Sen Biss. Then, run separately a bill tamping down the COLA by changing it to the SS model rather than current 3%. As always, I believe something needs to be done on the COLAs, so try it, but I fear it is probably unconstitutional. - foster brooks - Thursday, Jan 10, 13 @ 2:16 pm: Steve I believe they tried a pensionable cap on salary with the judges years ago and was ruled a diminishment per the pension clause - Frenchie Mendoza - Thursday, Jan 10, 13 @ 2:18 pm: It seems to me that the unions *did* come up with a reasonable idea — increase employee contributions, cut out some of the more obscene tax breaks corporations are getting, and then get an iron-clad guarantee that payments will be made into the pension system. This is why Quinn’s approach is weird, off-base, and will surely make him a one-term governor (or a 1.2 term governor — or whatever happened when the other guy was bounced out of Springfield.) I mean, why antagonize unions when you know — everyone knows — that they are necessary for acceptance of whatever happens with the contract and the pensions. Even if unions can’t bargain on behalf of the employees regarding pensions, they can certainly persuade most of the moderate members to swallow a reasonable but still bitter pill. Why not give a bit on the contract with the understanding that, okay, AFSCME can maybe help sell (at least) some part of whatever pension plan is eventually passed? This seems sensible. What am I missing? Remember, too, that one of the first things Quinn did when he took office was to send out a note to all state employees thanking them for their service under such difficult (i.e., Blagojevich) circumstances. Now, here he is making things even more difficult for essentially the same folks. If I was cynical, I’d say, wow, this is all pretty crassly political (and inept). - Frenchie Mendoza - Thursday, Jan 10, 13 @ 2:25 pm: === Even if unions can’t bargain on behalf of the employees regarding pensions, they can certainly persuade most of the moderate members to swallow a reasonable but still bitter pill. Why not give a bit on the contract with the understanding that, okay, AFSCME can maybe help sell (at least) some part of whatever pension plan is eventually passed? This seems sensible. What am I missing? ==== Actually, wait — I know the answer to this one. I’m missing the fact that Quinn is afraid the unions will do to him what he did to them: promise one thing and then — six months later — turn around and break the promise. So, yeah, Quinn’s stuck. If the lion tamer prods the lions with a cattle prod — then he deserves whatever happens when he gets in the cage with ‘em. - RNUG - Thursday, Jan 10, 13 @ 2:31 pm: Steve, Would switching to the SS calculation really matter all that much? I believe SS increases compound also. Historic BoL CPI (what SS says the increase is based on) has been about 3.2% average since 1913 and right at 2.9% since 1970. Yes, there would be year to year variations and savings, especially right now, as long as inflaiton stays low. But, if the past is any indication, it seems the long term result would end up about the same place we do today but it would be more of a roller coaster ride. - steve schnorf - Thursday, Jan 10, 13 @ 2:52 pm: RNUG, it certainly would have made a difference over the past 10 years, during which all of we recent retirees are way ahead of inflation with our pensions. It would make an even greater difference if SS goes to chained cpi, which is being discussed - foster brooks - Thursday, Jan 10, 13 @ 2:55 pm: This sums it up http://m.sj-r.com/sjr/pm_22118/contentdetail.htm?contentguid=n4eAGIkz - Rod - Thursday, Jan 10, 13 @ 2:56 pm: It is assumed I think by everyone posting so far that in the event of a pension default the Illinois Courts will enforce the provision of the Illinois Constitution in Article XIII by requiring the State of Illinois to appropriate sufficient funds to pay pensioners of a defaulted plan completely without diminishment. All the constitution indicates is that pensions benefits cannot be diminished or impaired and if that is proposed by a unit or government or the State due to a default the pension fund can go to court to seek enforcement of the benefits. At the point of default the pension obligations of Illinois become a contract subject to contract law. State bankruptcy would be incredibly disruptive and it is not considered to be an option in Illinois for numerous reasons that have been discussed before on this blog. But since the State cannot declare itself bankrupt and during the Great Depression, many local governments were forced to pay employees in scrip at the height of the crisis there is no reason to believe current pensioners could not be paid at least in part in State of Illinois scrip in the event of a pension fund default. It would be up to the banks and other commercial entities to accept or not accept pension payment in the form of scrip. The State’s contractual obligation would be met by the issuance of scrip even if it were accepted by very few commercial entities. Chicago was the first major city in the US forced to pay its employees in tax anticipation warrants in the form of scrip during the depression. CPS Teachers were particularly hard-hit by the crisis, going for nearly two years until Fall 1933 with only occasional payments of their regular salaries. The Illinois Courts upheld these payments. By the 1930s the federal government’s position was that municipal scrip did not violate constitutional prohibitions of non-national currency. (see http://www.scribd.com/doc/59754559/Tax-Anticipation-Scrip-as-a-Form-of-Local-Currency-in-the-USA-During-the-1930s-Loren-Gatch ) I am not joking folks as unthinkable as this could be now it could happen. If Illinois began to issue payments in scrip it is very likely every union and every public pension fund would want to make a deal and fast. So I hope the unions do not believe in the situation of a default the Illinois Constitution will have their back, contractual obligations of public entities can be filled in many ways. - Frenchie Mendoza - Thursday, Jan 10, 13 @ 3:12 pm: Scrip? Yeah — like California in 2009. So long as the scrip is transferrable — most banks bought it and folks were good to go. Along with the platinum coin idea, scrip is something that’s possible if we hit the debt limit. Point is — it’s odd, but it’s do-able — and if anything (at least in the debt limit debate) the scrip would, in fact, expedite the solving of the crisis. Now, what I’d like to see is the salary of legislators tied to a successful pension fix. No payment — scrip, platinum coins, IOUs — nothing, until you pass a successful and constitutional amendment. That’d get a rock solid fix in short order. - Wilson Pickett - Thursday, Jan 10, 13 @ 3:38 pm: One way to hurry along the pension solution process would be if the state employees union (AFSCMR) were to have it’s membership go out on strike. That always seems to work for the teacher’s up in Chicago. They may not get everything that the teacher’s union wants but it certainly does speed up the process and a conclusion is quickly reached. If the AFSCME were to tell their rank & file to “stay home this week” so we can get Governor Quinn’s & Madigan’s undivided attention down in Springfield, there would be a Chinese Fire Drill taking place the next day to resolve this never-ending problem. - Meaningless - Thursday, Jan 10, 13 @ 3:52 pm: Another thought … IF the Illinois legislature passed legislation that “diminished” the promised benefits that retirees are so dependent on, would the retirees be able to file a class-action law suit against Illinois politicians for their part in the mismanagement of the pension funds? i.e. - “pension holidays” etc. Is anybody accountable for this pension fiasco? - Ruby - Thursday, Jan 10, 13 @ 3:55 pm: The S&P 500 just hit a new five year high of 1472. This is a good reason to be more optimistic about the future of the Illinois economy. We won’t need strikes, scrip, or chained CPI. But we do need constitutional and fair solutions to the Illinois pension funding problem. - Anonymous - Thursday, Jan 10, 13 @ 4:06 pm: ==i understand health care is not covered in the diminishment clause== I understand that there are people who say that, but they don’t offer any explanation. The clause protects “benefits,” which certainly would include group insurance unless something was said or done in the group insurance legislation that said otherwise, and if that something exists, it should have been easy for those claiming there is no protection to point it out. As for Rod’s post, the state cannot declare bankruptcy and I would question whether scrip can be forced on people for debts already owed by the State. It’s one thing to tell workers that they will be paid in scrip for future work, but another to say we won’t pay debts in real money. I would suspect (without researching, I admit) that the constitution’s prohibiting the states from declaring anything but gold and silver to be legal tender was intended to prevent just that from happening. - geronimo - Thursday, Jan 10, 13 @ 4:08 pm: Wilson Pickett Look at the effect mass public strikes had in India under Ghandi. It brought the mighty British Empire to it’s knees. If every worker in this state who has an interest in a public pension stayed home for a week, do you think a statement would be made? Try to replace hundreds of thousands! Everyone wants and expects that these workers will always provide services and are happy to do so. Not so happy these days, being under financial seige! School strikes sure do strike panic and near death experiences for some parents. - wordslinger - Thursday, Jan 10, 13 @ 4:10 pm: ==i understand health care is not covered in the diminishment clause== –I understand that there are people who say that, but they don’t offer any explanation.– I think MJM rattled that sword. If it’s true, you could reduce a lot of liability in a hurry. - Fred's Mustache - Thursday, Jan 10, 13 @ 4:10 pm: ==Madigan refuses to endorse cuts and is going to keep dolling out money to so the people who refuse to work will keep voting democrat. the voters of IL lack the capacity to vote for republicans so just eat it.== == If you are not willing to cut every line of the state budget 10-15% this year, this is the only fair solution. == ==You can’t cut judges because if violates separtion of power. == So innacurate, but yet stated with such conviction. Madigan is as fiscally conservative as it comes for a Democrat. Most of his targets are usually pretty conservative as well. The spending on social welfare programs has been significantly reduced in recent years. But I suppose in your eyes, anything less than the complete elimination social welfare programs should be considered a crazed spending spree. Your 10%-15% across the board budget cutting idea may sound reasonable… but only to those who have no idea of how government works or how government is funded. There are a number of agencies in Illinois that actually bring in more money than it costs to run the agency. Cutting the budgets of those agencies may actually make the budget problems worse. What has been happening the last few years has actually, in my opinion, been working (Setting a spending cap, and staying within those caps while trying to get more people involved in the process). I don’t see how “cutting the judges” violates the separation of powers provision pf the Constitution. Cutting the judges’ salaries or pension benefits does not constitute the exercise of judicial power. - Prairiedog13 - Thursday, Jan 10, 13 @ 4:34 pm: Given all the constitutional concerns being raised, I agree the other options need to be considered. As others have mentioned, drop the funding goal from 90% to 80%. find a dedicated funding source, such as a portion of gaming proceeds. Give employees a lump sum payment now if they forego their colas in future years (like those companies who will purchase your lottery or lawsuit payments), or give them 1 year additional service credit for every percent reduction in cola they accept. I don’t know whether these would save any significant $, but there may be other options out there that would save significant $ but still give employees a real choice. - dupage dan - Thursday, Jan 10, 13 @ 4:44 pm: Is the pension funding issue really as much of a crisis as we are lead to believe? Do we really need 90% level of funding? The state should be making the annual payments and need to get caught up after pension holidays, but is it as bad as the doomsday screamers are wailing about? - Meaningless - Thursday, Jan 10, 13 @ 4:47 pm: Interesting quote when thinking about pension reform / cutting. - Ty Fahner … “It would border on the criminal if they (politicians) did this in the private sector.” Our politicians need to be reminded that state pension recipients contribute a multi-billion $ stimulus to the overall Illinois economy. - wordslinger - Thursday, Jan 10, 13 @ 5:00 pm: ==Interesting quote when thinking about pension reform / cutting. - Ty Fahner … “It would border on the criminal if they (politicians) did this in the private sector.”== You sure Ty said that, lol? But corporations have been shedding pension obligations in U.S. Bankruptcy Court for a long time, coming out the other side and going back to business. Congress is trying to tighten it up, before a bailout is needed for the Pension Benefit Guarantee Corp. - walkinfool - Thursday, Jan 10, 13 @ 5:09 pm: D’Dan: I’m not primarily blaming the GOP for anything. I am surprised you got that impression from my comment. The ball is mostly in the Dems court. I’m just stating the reality in this case that even if/when Madigan really squeezes out every available vote from his caucus, they will still probably need GOP-side help. The legislators vote, not MJM for them, and there is significant division on both sides of the aisle on this issue. The only thing I would blame any leader for would be sitting back and saying “not my problem, you fix it without me — and if you fail, I’ll settle for winning politically, regardless of the impact on the state.” I do expect better, and am optimistic we’ll get there.(no snark) - Esquire - Thursday, Jan 10, 13 @ 5:10 pm: Just asking: Since Brady lost the gubernatorial race to Quinn, would it be asking too much for him to reveal his “secret plan” to fix the Illinois budget? Was there ever such a plan? - Old and In the Way - Thursday, Jan 10, 13 @ 5:15 pm: I have been an avid reader of Capitol Fax for a long time and I truly enjoy the give and take of the commentary. I have rarely commented over the years feeling it inappropriate in many cases given my profession and long history with the state and most of the principal players. However, I have made an exception in the pension debate. While I am not a member of any of the pensions both my mother and my sister are retirees. My mother taught in rural schools for 41 years and is a member of TRS. Her exorbitant pension amounts to a grand total of a little over $33,000 a year with NO medical insurance or Social Security. She waited to retire at 65 so she could get Medicare but still has a co-pay. So much for asking her to give up subsidized healthcare. Elimination of the COLA will be devastating to her. My sister is a SURS retiree. She worked in university Civil Service for 30 years. Her grand pension is a bit better at just under $38,000 per year. She gets subsidized health care but still pays co-pays and incidentals. She also has diabetes and now worries whether she can afford her new health care. The state still hasn’t told her what she will have to pay almost 7 months after they passed the law! However, she knows she has no choice since pre existing conditions exclude her buying insurance. For her the COLA is probably gone as well. These are the fat cat retirees that everyone is in such a hurry to reduce their pensions! They are not just my sister and mother but your friends and neighbors. The teachers, the firefighters and cops who have served without complaint. This isn’t about AFSCME or some bureaucrat it’s about people who played by the rules and never wanted to get rich, they just didn’t want to die poor and sick. They paid their share. The uncomfortable truth is that the taxpayers of Illinois didn’t pay their fair share! I laugh when PQ (Governor Dufus) says that pension payments are crowding out money for education and old people in the budget. Retirees ARE old people and yes most are educators! What a foolish windbag! Everyone is treating this like a zero sum game, if the pensioners and workers win then the state loses. I think it’s far more complicated. H.L. Menken once said that for every difficult and complex problem there is a simple solution and its generally wrong! I am fortunate in that I have been successful and if necessary will take care of my mother and sister but think about the people behind this issue every time you suggest a clever way to deceive or screw them out of what they legitimately earned and were promised. We may find a constitutional way to diminish their pensions and as PQ, that great foot in mouth orator, says “eliminate the liability” but can we really say it will be ethical? - Meaningless - Thursday, Jan 10, 13 @ 5:18 pm: Hey Esquire … I think Brady has a “secret plan” like Nixon did to end the war in Vietnam. - Meaningless - Thursday, Jan 10, 13 @ 5:22 pm: To “Old and In The Way” - Wonderful comments. I couldn’t agree with you more. Please get involved in this discussion more often. - walkinfool - Thursday, Jan 10, 13 @ 5:26 pm: Just FYI: I have no inside knowledge, and am not in Springfield counting noses. Many others on the thread would know the situation better. I am guessing, and would be happy if Word’s and DupageDan’s assumptions about the supermajority powers in the new legislature were true. I’m just afraid they’re not. - geronimo - Thursday, Jan 10, 13 @ 5:56 pm: Old and In the Way Thank you. You have painted the real picture. - Arthur Andersen - Thursday, Jan 10, 13 @ 6:01 pm: Old and in the Way, please speak up more often. I understand your reluctance to post, but you clearly are an articulate and thoughtful addition to the group here. The stories you relate of your family members are much more common than the “reformers” care to acknowledge. Pension changes that target benefits earned by folks like your mother and sister are not only unconstitutional, but unfair and a bit mean-spirited. There are better ways to solve this problem. Give Bill and AA a pot of coffee, pencils, paper, and an adding machine and we’ll knock out a plan in a day. - Sgtstu - Thursday, Jan 10, 13 @ 6:17 pm: Old and In the Way - Thursday, Jan 10, 13 @ 5:15 Thank you, I hope you don’t mind I shared your comments on my facebook page. I think you pretty well nailed it. - western illinois - Thursday, Jan 10, 13 @ 6:19 pm: Old and in the way shouldnt have to pay them because their pension is a contract! One thing that is legal is to change the 90 percent to 70 ……. - DuPage Dave - Thursday, Jan 10, 13 @ 6:26 pm: ==i understand health care is not covered in the diminishment clause== The phrase is “the benefits of which shall not be diminished or impaired”. The word is plural- benefits- not singular. I think there’s a strong case to be made that one’s monthly annuity payment is a benefit (singular) and health care coverage bestowed by state law is another benefit (singular). I’m fairly sure that’s what the plaintiffs are saying in the case coming up later this month in Springfield. God bless ‘em, I say. Also- hurrah for Old and In the Way. He nailed it. Gold will turn to gray And youth will fade away They’ll never care about you When you’re old and in the way. - Roadiepig - Thursday, Jan 10, 13 @ 8:37 pm: Old and In The Way- Thank you! No editorial board wants to see the real truth (that “pension reform” is not just a budgetary issue, but a real world survival issue for so many retirees). Please chime in any time you have a thought on the pension cutting circus continuing in Springfield! - Mix It Up - Thursday, Jan 10, 13 @ 8:48 pm: Old and In The Way, Please post your comment in the Letters to the Editor section of the State Journal Register ( letters@sj-r.com ) The public needs information like you have given. - Mix It Up - Thursday, Jan 10, 13 @ 8:58 pm: Let me point out that changing a retiree’s retirement compensation can not be changed any more than a students acceptance into a college curriculum. You are grandfathered into graduation requirements when you enter college. To change them midstream is unconstitutional by contract law. Think about it. You could never graduate due to increased requirements. So why pension reform is being done by legislators, I do not know. Only going forward can there be changes through negotiations. And these negotiations are done by the Union and managment. All the politicians are doing is giving the public a show to detract away from why the state is really going broke and trying to justify keeping the tax increase which was enacted by the last lame duck session. As far as the state going broke, it cannot because it can enact more taxes and eliminate entitlement pork programs - foster brooks - Thursday, Jan 10, 13 @ 9:33 pm: all it takes is one person to sue, union pension agreements do not matter. - RNUG - Friday, Jan 11, 13 @ 1:51 am: RE State script If my memory is still working, and I’ll admit I haven’t seen a real piece of paper in close to 30 years, the State actually issues ‘Warrants’, not checks. And in the back of my mind, sometime in the late 70’s or 80’s, there was a month or two where a budget wasn’t settled, or a spending authority wasn’t in place, or something like that … the reason is vague now. Seems the State either planned to or actually did issue some “worthless” warrants to pay employees. If my memory isn’t playing tricks, the local banks said they would / did honor them for their regular customers anyway because they knew the State would eventually make good. Anybody else remember that episode? - annon - Friday, Jan 11, 13 @ 6:44 am: RNUG…You are correct…that’s what our ‘checks” say. I remember hearing about that from years ago. Difference now is the state is so completely upside down financially they ( banks, credit unions etc.) probably wouldn’t accept them now. Sorry, comments for this post are now closed.