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20/20 hindsight

Wednesday, Mar 13, 2013 - Posted by Rich Miller

* From today’s Chicago Tribune editorial about pension reform, the SEC fraud allegations and the 1994 pension funding law

Many of those politicians, having sabotaged state government and its pension system, still hold office. In the best of worlds, those who voted for the pension plan Edgar signed, or for subsequent pension holidays, would resign.

* From an August 21, 1997 Tribune editorial. Emphasis added

Jim Edgar can rightfully claim, as he did Wednesday in a preamble to his statement of retirement, that he will leave Illinois on a much sounder footing than when he took office in 1990. A resurgent national economy helped, but there’s no gainsaying Edgar’s leadership in reforming the state’s welfare system and in returning its pension and Medicaid programs to a pay-as-you-go basis. The times demanded fiscal stability, and Jim Edgar is stability personified.

So, um, maybe somebody needs to resign from the Trib editorial board?

Just sayin…

* By the way, this is how the Tribune covered the story back in 1994

Gov. Jim Edgar signed compromise legislation Monday to increase the amount of money flowing into the state’s five government pension systems over the next 50 years.

Dozens of state retirees were shepherded into the governor’s State Capitol office to witness his signature on the legislation, which now gives pensions the same status as bond financing in automatically receiving the first crack at money in future state budgets.

Though a co-sponsor of the measure, Sen. Penny Severns of Decatur, the Democratic nominee for lieutenant governor, said the legislation Edgar signed will cost taxpayers $17 billion more over its lifetime than an alternative plan proposed by her running mate, gubernatorial candidate Dawn Clark Netsch.

“Jim Edgar acted today to fix the pension mess, in great part, because this is an election year,” said Severns. “We need to have active leadership protecting our retirement systems all the time, not just in election years.”

Edgar, however, defended the new law and said Netsch’s alternative proved too costly and was unrealistic given the demands for state money from education, child welfare and other social services.

“This, we feel, is fiscally realistic,” Edgar said. “What we’re talking about putting in each year in new dollars can be done with the type of growth we expect to see in the revenues in the next few years.”

* Netsch talked about her efforts to reform the pension systems during an oral history compiled by the Chicago History Museum last year

       

44 Comments
  1. - Chad - Wednesday, Mar 13, 13 @ 8:40 am:

    The Tribune had it wrong in 1997. It was Edgar who refused to fund the previously-enacted pension funding catch-up scheme. Edgar began the practice of openly blowing-off compliance with these statutory catch-up schemes, and the Governors who followed kept the spending party going. The pension “holidays” were the purest expression of this practice. Not much of a “holiday” today in having to deal with the aftermath.


  2. - Skeeter - Wednesday, Mar 13, 13 @ 8:55 am:

    The Tribune has a point.

    I have to admit that I’m sort of tired of hearing people who have been in Springfield for a while complaining about pensions issues, or for that matter, a lot of the serious issues facing Illinois.

    Given the condition of our state, if you’ve been in Springfield two terms or more, you need to find a new line of work.

    I’m just amazed that people keep sending the same people back.


  3. - wordslinger - Wednesday, Mar 13, 13 @ 8:56 am:

    Stupid online archives, lol!


  4. - Norseman - Wednesday, Mar 13, 13 @ 8:57 am:

    What “previously-enacted pension funding catch-up scheme?”

    While he, like so many others, failed to fund the systems at needed levels, I don’t recall a “catch-up scheme.”


  5. - archimedes - Wednesday, Mar 13, 13 @ 8:57 am:

    All of this (the finding od the SEC as well) isn’t encouraging for a defense of the State using its police power to “reform” pensions by diminishing the benefit. Any of the proposed legislation that diminishes earned benefits (including COLA for retirees) is dependent on the State being able to defend its use of police power.


  6. - Old and in the Way - Wednesday, Mar 13, 13 @ 9:03 am:

    So much for the myth of the pension funding fiasco being the province of just one party or individual.

    It seems ironic that Edgar’s complaint that the pension payments were crowding education etc out of the budget is the same argument we are hearing today from Quinn and company.


  7. - Cincinnatus - Wednesday, Mar 13, 13 @ 9:04 am:

    In a reply that Wordslinger made two days ago to an inquiry from Shore on whether Dillard was Chief of Staff to Gov. Edgar when the ramp was instituted, Wordslinger was incorrect. The Ramp was instituted during Edgar’s second term. Dillard served ONLY during Edgar’s first term.


  8. - VanillaMan - Wednesday, Mar 13, 13 @ 9:05 am:

    Its human to make mistakes, but it seems that when politicians make mistakes, they lie about it. There is no respect for voters enough to deal with us like adults. Pro government supporters believe that voters are stupid and can be lied to.

    Mistakes were made. Admit it and fix them. If we’re lucky, they’ll stay fixed for a while.

    Politicians wanting a life long career need to be aware that it shouldn’t be a life long career. Times change. Stuff happens. Get the hell out of office when you discover that you need to fabricate and spin stories to cover your own tracks. Citizens deserve to be treated as adults, not needy children.

    The Tribune got it wrong. Edgar got it wrong. The GOP got it wrong. The GA got it wrong. Big deal. Stop the blame game and fix the dang thing and hope the fix holds a while.


  9. - Small Town Liberal - Wednesday, Mar 13, 13 @ 9:13 am:

    - The Ramp was instituted during Edgar’s second term. -

    Umm, doesn’t it say the bill was signed in ‘94? By my math that’s first term.

    I’m going to guess Dillard wasn’t in the dark about the plan.


  10. - Demoralized - Wednesday, Mar 13, 13 @ 9:36 am:

    @archimedes:

    The SEC issue has no bearing on how the state handles it’s pensions. The SEC has no authority over that. There only role is how we portray our pension mess when we make financial transactions (i.e. bond sales) on the open market. They are an accounting watchdog. That’s it.


  11. - Wensicia - Wednesday, Mar 13, 13 @ 9:41 am:

    The Tribune got it wrong. Edgar got it wrong. The GOP got it wrong. The GA got it wrong. Big deal. Stop the blame game and fix the dang thing and hope the fix holds a while.

    Will any of these people see their pensions reduced? No, but I will. So excuse me if I want to assess blame where it’s deserved.


  12. - StayFree75 - Wednesday, Mar 13, 13 @ 9:55 am:

    Demoralized, I think what archimedes is saying is the SEC finding could be Exhibit A in a lawsuit against the State if the General Assembly insists on imposing unconstitutional diminishments to pension benefits.


  13. - Rich Miller - Wednesday, Mar 13, 13 @ 9:57 am:

    ===Will any of these people see their pensions reduced? No, but I will.===

    If they do reduce pensions, then pensions will most certainly be cut for all retirement systems.


  14. - reformer - Wednesday, Mar 13, 13 @ 10:05 am:

    History vindicates Netsch once again. She was right about abolishing the death penalty. She was right about raising tthe income tax to better fund schools (IL ranks 50th). And she was right about the GOP backloaded pension plan.


  15. - RNUG - Wednesday, Mar 13, 13 @ 10:09 am:

    Chad @ 8:40 am:

    Correction - Walker was the first Gov after the 1970 Constitution to reduce the pension funding, and that resulted in the 1975 IFT court case / decision allowing it to happen.


  16. - RNUG - Wednesday, Mar 13, 13 @ 10:13 am:

    Should have added I agree with the conclusion it’s going to be very, very hard for the State to argue ‘police powers’ in any court case. The State was already slapped down in court on that argument and documentation like this, showing the State created it’s own problem, just makes it harder for the State.


  17. - Demoralized - Wednesday, Mar 13, 13 @ 10:15 am:

    @StayFree75:

    I still fail to see the point. How exactly is the SEC ruling relevant to whether a change to the pensions is unconstitutional or not? The answer is that is doesn’t.


  18. - Demoralized - Wednesday, Mar 13, 13 @ 10:16 am:

    I meant to say that it “isn’t” relevant.


  19. - StayFree75 - Wednesday, Mar 13, 13 @ 10:20 am:

    Demoralized:

    See RNUG’s comment @ 10:13 am


  20. - sal-says - Wednesday, Mar 13, 13 @ 10:22 am:

    “So, um, maybe somebody needs to resign from the Trib editorial board? Just sayin…”

    Maybe ALL of them? Just sayin…


  21. - Elise - Wednesday, Mar 13, 13 @ 10:45 am:

    Where would we be if Dawn Clark Netch had been elected? But we could not stand the truth then if it would cost money and we probably can’t now - local school districts will have to pick up their share Cairo should not pay for Wilmette


  22. - Demoralized - Wednesday, Mar 13, 13 @ 10:47 am:

    @StayFree75:

    Whatever. All the SEC said is that the state failed to disclose the dire situation that the pension systems are in. Period. End of story. Again, NOT RELEVANT to the constitutionality of a pension change. But if your logic works for you, so be it.


  23. - Tsavo - Wednesday, Mar 13, 13 @ 10:53 am:

    ===Will any of these people see their pensions reduced? No, but I will.===

    If they do reduce pensions, then pensions will most certainly be cut for all retirement systems.

    Rich,

    Do you believe they will reduce Judge’s pensions?


  24. - Cook County Commoner - Wednesday, Mar 13, 13 @ 11:04 am:

    So the state peddled its bonds without full disclosure as to its unsound pension financing. And the rating houses probably stamped them with AAA, without doing their homework. So the private mortgage market packages junk mortgages with decent motgages without full disclosure. Again, the rating houses don’t do their homework and slap AAA on the issues. In both instances, the SEC and other federal agencies failed in their oversight and came to the “rescue” after the horse was long gone from the barn. And, in both instances, no one does time probably because they are to big to jail, paraphrasing AG Holder from recent testimony before a US Senate committee.
    And, insofar as Illinois is concerned, the voters will probably reinstall in 2016 many of the same perps into the GA and US House and Senate who may not have been around when the original fiscal crimes were committed, but who knew what was going on and did nothing.
    An ill-informed electorate, cascades of campaign cash to turn away and betray the citizens and lack of meaningful deterrence are a toxic stew which still simmers in the GA and federal government. And for those of us not part of the complex made up of politicians-rating houses-unionized government employees and their accomplice lobbyists, lawyers and other toadies, we await how they will further damage us.


  25. - Cincinnatus - Wednesday, Mar 13, 13 @ 11:12 am:

    - Small Town Liberal - Wednesday, Mar 13, 13 @ 9:13 am:

    - The Ramp was instituted during Edgar’s second term. -

    Umm, doesn’t it say the bill was signed in ‘94? By my math that’s first term.

    I’m going to guess Dillard wasn’t in the dark about the plan.

    =================================

    Dillard left the Governor’s office in 1993.


  26. - Small Town Liberal - Wednesday, Mar 13, 13 @ 11:19 am:

    Cinci - You’re right, I’m sure as COS before then he had no hand in planning what to do with pensions. Good luck with that.


  27. - Cincinnatus - Wednesday, Mar 13, 13 @ 11:22 am:

    STL,

    Got proof, since it’s hard for me to prove a negative? If you say he’s involved, prove it, otherwise acknowledge it is your uninformed opinion…


  28. - RNUG - Wednesday, Mar 13, 13 @ 11:24 am:

    Tsavo @ 10:53am

    If pensions do get cut, it will be across the board, probably by a percentage. My personal guess is they won’t get cut any time soon.

    Judges are political also; you don’t get to the State Supreme Court level without learning some politics along with knowing the law. If / when some of these proposed laws get to the IL SC, my guess is the clearly unconstitutional ones will be slapped down and the GA told they can’t diminish the pensions. The State will most likely also get a lecture about how this is all a known problem since either 1975 (IFT) or 1995 (ramp) and the Gov & GA failed to resolve it. Further, I’m guessing the court will stop short of telling the GA how to solve the financial problem caused by the growing pension funding payments and simply note it is a political problem that is within the scope of the GA to resolve.

    From a political standpoint, it will be amusing to watch … but I’ve been told I have a weird sense of humor. Hopefully we don’t repeat the above several times before getting to a real solution.


  29. - Demoralized - Wednesday, Mar 13, 13 @ 11:40 am:

    @Cinci:

    Go proof he didn’t. Neither of you has proof so get over it. You made your point. STL made his/hers.


  30. - Demoralized - Wednesday, Mar 13, 13 @ 11:40 am:

    That should be “Got proof.”


  31. - Cook County Commoner - Wednesday, Mar 13, 13 @ 11:55 am:

    And say the GA diminishes current benefits in violation of the constitution’s anti-impairment clause. And say the Illinois courts retain jurisdiction of the case although they are in a conflict of interest. The state could refuse to comply with any order because the court lacks any power of enforcement over a co-equal branch of governement.
    But RNUG,above, may have hit it. The court could refuse to hear the case by deeming it a political question outside its jurisdiction. I think the court did this a couple of times in deciding whether the GA violated Art X requiring the state to be the primary funding for public education, which it is not, judging from my property tax.
    Besides the involved fiscal issues, I think the law books may have a few new chapters before this is over.


  32. - Small Town Liberal - Wednesday, Mar 13, 13 @ 12:05 pm:

    - prove it -

    I don’t have to. If Dillard can wash his hands of the mess the ramp put us in, good for you guys, but I doubt he can.


  33. - Old and in the Way - Wednesday, Mar 13, 13 @ 12:14 pm:

    Cook County Commoner
    Conflict of interest? Lacks power of enforcement?

    The ISC has no restriction on ruling in these cases. Despite assertions to the contrary they have not nor will they recuse themselves from this. This issue has been settled many times.

    As for enforcement, the ISC can issue injunctions and nullifications and these are enforceable. They may not be able to dictate a solution or specific remedy but they can certainly invalidate actions by the GA.

    For what it’s worth I actually think the GA would welcome the ISC imposing a remedy, such as raising taxes etc. but it will not happen with this court.


  34. - Leave a Light on George - Wednesday, Mar 13, 13 @ 12:15 pm:

    How many times were pension payments missed by the state between 1994 and now?

    If all the payments had been made, even the “small” ones early in the plan would we be in the shape we are now?


  35. - funny guy - Wednesday, Mar 13, 13 @ 12:37 pm:

    Does anyone know why the federal court could not hear this case if the plaintiffs allege a 5th amendment takings claim in addition to the Illinois Constitution claim?


  36. - Demoralized - Wednesday, Mar 13, 13 @ 12:50 pm:

    @funny guy:

    A federal court can decide to hear whatever case they want. I’m just not sure they would wade into the middle of this. I guess we will see as I’m sure all avenues will be used in any challenge to pension changes.


  37. - Norseman - Wednesday, Mar 13, 13 @ 1:06 pm:

    STL, I know its your mission to be Quinn’s mouthpiece, but I’d be willing to put 5 spot that your guy doesn’t make the general. So you don’t have to be so loose with your facts in attacking Dillard.

    Besides, from my point of view, flawed or not, Edgar’s attempt was not focused on taking away benefits earned by public workers. Benefits that are only at risk because of the poor management of Illinois policy leaders.

    I believe that 20/20 hindsight will show the so-called reform efforts being championed by Quinn to be a miserable failure for their primary focus to take away earned benefits.


  38. - Small Town Liberal - Wednesday, Mar 13, 13 @ 1:17 pm:

    Norse, spare me your concern, I post on this blog because I enjoy it and it helps me keep up with Illinois politics.


  39. - Blockhead - Wednesday, Mar 13, 13 @ 1:20 pm:

    Leave a Light on

    There is no question that if all payments had been made AND all the interest that would have accrued on those funds, the pension funds would be in probably the same shape that IMRF is in. IMRF is held up as an exemplary model of pension programs but no one ever shorted those workers. I’d be interested to know also how many payments were skipped or shorted over the years by our elected.


  40. - RNUG - Wednesday, Mar 13, 13 @ 1:48 pm:

    funny guy & Demoralized,

    My guess is the federal courts would duck it as long as there is possible recourse in state courts.


  41. - Endangered Moderate Species - Wednesday, Mar 13, 13 @ 1:53 pm:

    ===too costly and was unrealistic given the demands for state money from education, child welfare and other social services.===

    Grandpa Jim,

    Thanks for considering us.

    Love,

    The Grandkids


  42. - RNUG - Wednesday, Mar 13, 13 @ 1:53 pm:

    Cook County Commoner @ 11:55 am:

    I think the court will hear it and rule on it, and even find a given bill or provision unconstitutional. What the court won’t do, IMO, is order any specific remedy or course of action other than undoing the illegal changes. They will simply note it is up to the GA to solve it within the legal limits through the political process.


  43. - reformer - Wednesday, Mar 13, 13 @ 4:22 pm:

    Cinci

    Didn’t your guy vote for the ramp-up???


  44. - Just The Way It Is One - Wednesday, Mar 13, 13 @ 6:21 pm:

    Gov. Edgar did what he felt he had to to keep things relatively sound re. the Pension System before he left, but Sen. Netsch was actually right and almost definitely would have, or at least tried to, institute far bolder reforms to keep the System more solvent (may she rest in peace)….


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