62 Comments - Verbal Kint - Friday, May 10, 13 @ 9:35 am: As a non-smoker, can someone explain what an ash can is and how it relates to a trash can or an ash tray? - Keyrock - Friday, May 10, 13 @ 9:36 am: The pension debate is also about constitutionality, as has been frequently discussed on this blog. (And any straight-up legal ruling on Madigan’s plan will find it unconstitutional.) - AFSCME Steward - Friday, May 10, 13 @ 9:41 am: Isn’t a fix that’s clearly unconstitutional a fake fix ? Madigan’s bill is exactly what the 1970 CC feared and wrote specific constitutional language to prevent. MJM is a primary reason why the pension systems are in a mess. It is amazing that when all of his past decisions are blowing up in his face he suddenly becomes a “born again fiscal conservative”. Calling this fix the solution is like betting the rent money at the roulette table, hoping for 36 to come up. Passing a clearly questionable bill and hoping the courts rule in your favor is the same as betting on 36. What happens if 36 doesn’t come up. The only solution is for the legislative leaders from both parties, the governor, union leaders, representatives of retirees and merit comp employees sit down and work out a solution together. This should have happened 2 years ago. But MJM refuses to be anything but the bully he’s always been. Not working with people, but dictating to them. “What’s ‘morally’ wrong? Fake pension fix: The Senate bill is the worst kind of reform: It looks like progress and it could be passed off as such by campaigning politicians. But the bill saves relatively little and allows Illinois to continue the outrageous pass-the-buck behavior that got us in trouble in the first place.” - wordslinger - Friday, May 10, 13 @ 9:41 am: – Q: How will you approach Cullerton’s bill if it comes to the House? A: “Haven’t decided.” Q: Any ideas? A: “No, no ideas.” Q: Is there a possibility the cost-shift could be amended onto the Cullerton bill? A: “That’s a thought that really hasn’t been suggested. So we’ll just defer that.”– Q: Could you put all your cards on the table so I can see them? A: I don’t think so. You get points for asking, lol. - Rich Miller - Friday, May 10, 13 @ 9:41 am: ===is also about constitutionality=== Well, yeah, which is why I wrote “It’s about policy.” - Keyrock - Friday, May 10, 13 @ 9:46 am: Sorry, Rich. Lawyers usually use the term “policy” dispute to mean a dispute about whether ideas are good or bad, as opposed to whether they are constitutional or unconstitutional. (We like to believe, or at least pretend, that disputes over constitutionality are usually not about policy.) - Upton Sinclair's ghost - Friday, May 10, 13 @ 9:50 am: Verbal - nothing to do with being a smoker. I grew up in a rural home heated by a wood fire, the ashcan is literally where you put the ashes when cleaning out the stove. - Hank - Friday, May 10, 13 @ 9:52 am: throw it in the ash can..MM is showing his age!! - Verbal Kint - Friday, May 10, 13 @ 9:54 am: Thanks Upton-makes sense - Get 'Er Dunne - Friday, May 10, 13 @ 9:55 am: ===the ashcan is literally where you put the ashes when cleaning out the stove=== Showing the speaker’s age a bit, eh? - soccermom - Friday, May 10, 13 @ 9:57 am: Honey, could you please bring Soccermom her smelling salts? Mommy’s getting all upset again over reporters who find it easier to focus on personality disputes than to dig into the numbers and Constitutional questions to compare two fundamentally different approaches to solve a tremendously serious problem. And when Soccermom calms down, she may point out that this is the kind of coverage that made it possible for the pension deficit to balloon over the past decade. Because when you’re devoting the vast majority of your coverage to seventh-grade slambook stuff about who likes who and who’s fighting with who, it doesn’t leave much room to explain to voters why the pension issue matters to everybody, not just AFSCME. Soccermom is going to go lie down for a while… - wordslinger - Friday, May 10, 13 @ 9:58 am: ===the ashcan is literally where you put the ashes when cleaning out the stove=== Showing the speaker’s age a bit, eh?– You ever clean a fireplace? - Loop Lady - Friday, May 10, 13 @ 10:00 am: ugh…IL’s political King has spoken you plebes…listen up! - Johnnie F. - Friday, May 10, 13 @ 10:05 am: The ashcan is where Madigan puts all the constitutional pension solutions after he incinerates them…like the solutions suggested by Ralph Martire. - Anonymous - Friday, May 10, 13 @ 10:07 am: The Madigan dialogues. … Q: Could you put all your cards on the table so I can see them? A: I don’t think so. Q: If the bill – A: Nope. Q: But didn’t …? A: No. Q: Changing the subject. Cullerton’s been approached– A: It doesn’t matter. Q: –the unions, and there’s a sense of a– A: What? Q: A strong, you know, coalition that – A: It’s not strong. Q: It’s not? A: Nope. Q: So – A: So nothing. Nope. Q: We wonder if it’s not politically more palatable – A: Doesn’t matter. Q: That it’s palatable? A: Nope. Q: That it’s *not* palatable you’re saying? A: Yes. And nope. - Liberty_First - Friday, May 10, 13 @ 10:09 am: Makes you wonder if Madigan is going to leverage his cost shift against the Senate bill…. - biased observer - Friday, May 10, 13 @ 10:12 am: the final ultimate argument being made by union and anti-pension reform folks is the “unconstitutional” one. This is because it is difficult to make other arguments maintaining the current pension system, especially in the light of our current fiscal calamity. If I were someone expecting a pension, I would feel very little comfort in the constitutionality argument currently. Rather, months ago I would have been working to cut a deal more favorable than the MJM deal recently passed. It was a political miscalculation not in the best interests of the dues paying union members. In life, there are how we want things to be (state of Illinois with plenty of money and a voting population in favor of maintaining current pension system) and then there are how things really are (state with no money and a voting population growing less supportive of current pension system in light of increased taxes and decreased basic services). Hoping that things are different than they actually are and using the unconstitutionality argument as a back up will probably not be shown to be a good strategy in the long term. We will see. - MOON - Friday, May 10, 13 @ 10:19 am: AFSCME The blame for the pension mess is not only the elected officials fault but also the unions. The unions are forever demanding increases in wages and benefits and disregarding the fairness of such demands. Times have changed. The average Joe on the street is suffering and its time that everybody shares in the pain. - RNUG - Friday, May 10, 13 @ 10:23 am: Nothing we haven’t seen or heard before. Right now it’s a standoff. The real question is whether either leader will allow a straight vote on the opposite bill without saddling it with amendments. - Anonymous - Friday, May 10, 13 @ 10:25 am: – The unions are forever demanding increases in wages and benefits and disregarding the fairness of such demands. – Those awful, awful unions. I mean, never mind the fact that they’re doing their job — but also the fact that, um, folks in the private sector *are* getting raises. This whole austerity thing is bizarre. What, private sector folks can continue on behind their corporate walls getting raises, stock options, bonuses while public workers — simply because they’re public — must somehow be austere, underpaid lemmings stripped of anything and everything that smacks of a “benefit”? I mean, come on — you wonder why public sector workers unionize? This is the number one reason. - Fan of the Game - Friday, May 10, 13 @ 10:30 am: Sounds as if the Speaker has his mind made up. The Senate should vote on his bill, but his House… Q: How will you handle the Senate bill? MJM: There’s a Senate bill? - JohnG - Friday, May 10, 13 @ 10:32 am: So Moon, should we cut social security benefits too? Maybe we could cut those benefits that my tax dollars support and then we can cut the pensions at a comparative level. The money saved by the federal government can be shifted to the state and problem solved. - retired and fed up - Friday, May 10, 13 @ 10:38 am: Asking me to give up a constitutional right to undiminished pension benefits for which I made all my payments for 30 years is a major deal. How about asking people charged with a crime to give up their rights to be proven guilty beyond a reasonable doubt at a trial and just plead guilty because we just can’t afford them anymore? How about asking the other groups and big time contributors to which the State owes money to give up part of what is owed to them? How about not paying for pork projects or only a percentage of the major construction just announced? Then we might really be talking about shared sacrifice. I waited until age 66 with 30 years to retire. I’m too old to start over and took a much lower salary than I would have in the private sector to be a public servant based on the pension benefits I would earn. - Demoralized - Friday, May 10, 13 @ 10:39 am: We won’t know what is “clearly” unconstitutional until those people in the black robes tell us. I would rather they pass something so that we start to maybe have some clue as to what the Court is thinking. - archimedes - Friday, May 10, 13 @ 10:41 am: This will be interesting dsicussion. After working out what I think are the key numbers, pros and cons of each: SB1(amended) - Pro, saves $2.5 $2.8 billion on budget. Equal to 0.7 cents of Income Tax. Cost Shift to schools minimal (Normal Cost almost all paid by teachers). Con, clearly breaks 2 Illinois Constitution and 1 Federal Constitution sections and must rely on Police Power to get around that. SB2404 - Pro, saves about $0.85 billion on budget. Equal to 0.25 cents of Income Tax. Cost Shift to Schools about 1.5% of school budget (max Normal Cost of 3.5% salary after 7 years, then Normal Cost declines). Con - 50/50 chance it breaks the same constitution sections as SB1, but can argume that it does not do so. Much better chance of Police Power argument as “pain” is balanced between pension members and taxpayers. - MOON - Friday, May 10, 13 @ 10:49 am: JOHN G As I stated earlier everbody should share in the pain. If that requires cutting social security benefits so be it. By the way, I am on social securty and thus my benefits would also be cut. It is time for all of us to realize there is no money. We have to quit demanding more programs and costly benefits. All of us have to recognize the situation our State and Country are in. We need to quit complaining and take action. At our current pace of spending it wont be long and we will be asking Cyprus, Spain, etc to bail us out. WE ARE BROKE. CUT,CUT, CUT - Norseman - Friday, May 10, 13 @ 11:22 am: RNUG or AA - I was looking more closely at Madigan’s bill last night. Did you understand that the AAI under his bill will only be a simple increase if your annuity is at or more than the (years of service * 3%) cap. Per SERS analysis a person whose benefits are coordinated with Social Security with 30 years of service would have a cap of $24,000. If that person’s annuity is $24,000 or greater, than he/she would only receive an AAI of $720 after meeting the 5 year or age 67 threshold. So (assuming a base annuity of $24,000) this person will only get an annual annuity of $24,720 for the rest of his life. Pretty sick considering the expected increases in health care costs - presuming retirees will still get healthcare if the future. I misread the description of the amendment to allow compounding of the “cap” amount, i.e. for the above example the AAI for the first eligible year would be $720, while the AAI for the next year would be based on $24,720 for an AAI of $741.60. - AFSCME Steward - Friday, May 10, 13 @ 11:28 am: Moon You are aware, as has been documented on this blog on numerous occasions, that government workers make less money than similiarly educated counterparts in the public sector ??? Let’s talk about sacrifice, I was a management employee for years. I did not receive any raises for 4 consecutive years during one of the bigest economic booms in American history. For 2 of those years I had aq 4% pay cut because the state stopped picking up my share of the pension payment (was part of a union contract for years gone by). During that time, including years the pension payment was skipped, the state was spending money like a drunken sailor. Not on union contracts, but expensive new programs that the state did not have the resources to pay for. Union contracts are not the cause of the pension mess. The cause is irresponsible spending by politicos who were more interested in making big promises to get reelected than they were in good responsible governance. So you want to put me on a par with the private sector ? Then pay me the $10000+ that I should be making if I worked in the private sector. “The unions are forever demanding increases in wages and benefits and disregarding the fairness of such demands. Times have changed. The average Joe on the street is suffering and its time that everybody shares in the pain.” - Meaningless - Friday, May 10, 13 @ 11:34 am: Moon … There is money! Illinois is one of the wealthiest states in the country. It’s just a matter of who controls that wealth. Maybe Illinois could start doing some money laundering for the Russians like Cyprus was doing, only let our state politicians manage it. - retired and fed up - Friday, May 10, 13 @ 11:38 am: After 30 years with the State, the last 23+ as an attorney I still made less than a beginning associate in a mid-sized law firm at the time of my retirement and I was a Union member the last eight years. Where were my big raises and huge salary that the Union supposedly got for me? I also did a really good job as a dedicated public servant. - anon - Friday, May 10, 13 @ 11:42 am: La-la-la-la-lalalalala. wut, I can’t hear you… - MJM - Anonymous - Friday, May 10, 13 @ 11:43 am: Uhm, is Madigan a God? If any downstate elected house reps vote for his bill they can count themselve out of office next election year. Southern Illinois is all about unions who back each other union members up. Rep Bradley do right by recognizing that he may have competition in his own party if he votes for Madigan’s bill - MOON - Friday, May 10, 13 @ 11:43 am: AFSCME I think you mean $100,000 not $10,000. With that said I wonder why you chose the public sector vs. the private sector for employment. The choice was yours so live with it. - Michelle Flaherty - Friday, May 10, 13 @ 11:45 am: Liberty, “Makes you wonder if Madigan is going to leverage his cost shift against the Senate bill….” So Madigan’s going to jam Cullerton with Cullerton’s idea? - AFSCME Steward - Friday, May 10, 13 @ 11:49 am: Moon I’m not complaining about my circumstances, you are. If you are not fully informed by something called facts, maybe you should refrain from comenting. Using your argument about n ongovernment employees suffering while I am living high on the hog, I am under payed by about $10000 per year, not the $100,000 you just stated. I think you mean $100,000 not $10,000. “With that said I wonder why you chose the public sector vs. the private sector for employment. The choice was yours so live with it.” - titan - Friday, May 10, 13 @ 11:52 am: @ MOON - If we are truly “BROKE” then we need to add the bondholders into who gets a haircut and shares the pain. - Jimbo - Friday, May 10, 13 @ 11:54 am: MOON, people choose the public sector for various reasons, pension and healthcare benefits being a huge one. - Nuance - Friday, May 10, 13 @ 12:04 pm: Glad he said ashcan and not thunder mug! Now that would have been showing his age:) And for you that do not know what that is, no I will not explain it. - RNUG - Friday, May 10, 13 @ 12:13 pm: Norseman @ 11:22 am: I think you might be misreading it. I’m going to have to re-read it to be sure, and may not get that done before Rich’s cut-off tonight. From memory, the way I read it, you would get the 3% AAI based on the “original” amount. In your example, the AAI every year would be $720. But it would be cumulative, just not compounding, ie, on eligible year 1 the pension goes from $24,000 to $24,720, then in year 2 you would again get the $720 for a pension total that year of $25,540 and so forth. It seems like a minor change that wouldn’t make much difference, and it is in the early years, but get out 10+ years and it starts to add up. - RNUG - Friday, May 10, 13 @ 12:33 pm: Norseman @ 11:22 am: Scanned it again fairly quickly. Your pickup of the “originally granted annuity” language is a good catch. That definitely slows the rate of increase because a lot of the other bills (and some of this bill’s previous language) specified the 3% would be on either whatever the current level is for retirees or on a specific capped amount calculated on service years. So while you may be misconstruing how it accummulates, you nailed something I missed (or at least don’t remembewr) in MJM’s passed version of SB1. It appears to stick it to the retirees even worse than at first reading, and hits the low income retiree whose initial pension was way under the cap especially hard. - Cornerfield - Friday, May 10, 13 @ 12:36 pm: - “I wonder why you chose the public sector vs. the private sector for employment. The choice was yours so live with it.” - Precisely. One of the big reasons I chose to be a state employee over 25 years ago was the retirement package. The whole deal was my choice. All I ask is to be able to “live with it” when I retire. - MOON - Friday, May 10, 13 @ 12:59 pm: CORNFIELD You answered my question. Obviously the retirement package was better than the ones offered in the private sector. In other words the public sectors pensions are to generous. - MOON - Friday, May 10, 13 @ 1:03 pm: TITAN If your suggestion was possible I would be all for it. Unfortunately, the bond holders are not over compensated but rather State employees. - Anon. - Friday, May 10, 13 @ 1:17 pm: ==The choice was yours so live with it.== I agree — but that applies to everyone, equally. The State made its choices, too, and must live up to its end of the bargain. - Anon. - Friday, May 10, 13 @ 1:22 pm: ==Unfortunately, the bond holders are not over compensated but rather State employees.== The real reason comes out. You reject AFSCME’s argument that he or she was undercompensated with “you made your choice, live with it,” but then argue that the state can call do-over on its choice of compensation to offer AFSCME because state employees were overcompensated. Not very principled - Challenger - Friday, May 10, 13 @ 1:22 pm: I am a state employee and I can tell you I went to work for the state because they were the first to call me for a job as I had a child to support and because of the medical insurance,not the pay or the retirement. Just because they offered health insurance. - Challenger - Friday, May 10, 13 @ 1:28 pm: Oh,I guess I should also tell you that it was in 1974, and my salary was $448.00 a month, and I paid for my families health insurance out of that. I am still working. - Meaningless - Friday, May 10, 13 @ 1:35 pm: Is this “Moon” clown another troll or is he just plain ignorant? His comments are repulsive for this blog. - Arthur Andersen - Friday, May 10, 13 @ 1:42 pm: Norseman, I had interpreted that section on the AAI to mean “no compounding ever,” as you show in your second example. - Jimbo - Friday, May 10, 13 @ 1:49 pm: Moon - “In other words the public sectors pensions are to generous.” In other words the private sector’s are too low. - Rich Miller - Friday, May 10, 13 @ 1:53 pm: ===Is this “Moon” clown another troll=== Don’t feed the trolls. - MOON - Friday, May 10, 13 @ 2:04 pm: MEANINGLESS Your comments match your name. My how the truth hurts. - Norseman - Friday, May 10, 13 @ 2:06 pm: RNUG and AA, Following is the link to the SERS analysis that I read last night. https://www.srs.illinois.gov/PDFILES/Legislation/SB1_info.pdf - Jechislo - Friday, May 10, 13 @ 2:10 pm: Rich - I’ve seen you delete a lot less insulting comments that MOON has been posting. We really don’t need people like him injecting his vitriol and personal insults into an otherwise intelligent discussion. - redleg - Friday, May 10, 13 @ 2:21 pm: I also interpreted the section on AAI to be calculated by simple interest on the original capped amount rather than compound interest based on the previous year. Part of my retirement is IMRF which uses the same formula - that’s if I’m interpreting SB1 correctly. Makes for a very slow growing annuity. Not a good thing for the retiree. - biased observer - Friday, May 10, 13 @ 2:28 pm: I think the vitriol is going both ways. Although perhaps not the most diplomatically worded, Moon’s thinking reflects a large swath of the voting public in Illinois. This website tends to be dominated by union types and stateworkers. It is important for you guys to know that many many people look at this problem differently than you guys do. It can sometimes be uncomfortable to hear reasonable people make comments that although contrary to our own personal opinions and interests, are rational. - Algonquin J. Calhoun - Friday, May 10, 13 @ 2:43 pm: “Biased observer” - the arbiter of civility? “Wide swath” - hmmm. . . a “wide swath” would no doubt: (1) like to pay no taxes; (2) like a $100,000/year (no, $250,000/year) income; (3) have no doubt of the correctness of their beliefs; and, (4) known those who disagree are wrong. So - what’s your point? The Illinois Constitution’s clause on pensions, as references by Rich and many, many, others, appears clear on its face. You and others don’t like that reality. OK - at some point a suit will commence and we’ll see what it means; just don’t hold your breath that Constitutionally-protected contractual rights will be thrown out because a “wide swath” of people want it. - Algonquin J. Calhoun - Friday, May 10, 13 @ 2:45 pm: So sorry - “large”, not “wide” swath - must be accurate. - RNUG - Friday, May 10, 13 @ 2:47 pm: Noresman, Thanks for the link. I saw it once in hard copy but probably didn’t pay enough attention to it. - archimedes - Friday, May 10, 13 @ 3:18 pm: Here’s a thought. In 1995 the Pension Ramp law was passed. There was an estimated cost projected for pensions for each year - I have seen graphs. My thought is to compare the reduced pension bill for Illinois for 2013-14 (due to SB1) and ensuing years to the original ramp projection. Since 1995, we have had pension holidays, investment losses, benefit increases, actuarial recalculations, etc. All this stuff has been blamed for the increase in pension costs. The closer the revised costs (due to SB1, and Tier 2 from 2010 for that matter) are to the orginal pension ramp cost - the more the reduction in benefits (from these two actions) has paid for the increased cost of all this stuff since 1995. That would define “shared sacrifice.” - archimedes - Friday, May 10, 13 @ 4:02 pm: OK - found it. COGFA, “Report on the 90% Funding Target of Public Act 88-0593″, Table 7, January 2006. The original total cost for pensions under the pension ramp for 2014 through 2045 = $271.2 billion. This was projected in 1994. COGFA, “Il. State Retirement Systems Financial Condition as of June 30, 2012″ Appendix G. February 2013. Total cost for pensions from 2014 to 2045 = $383.8 billion (current estimated cost). Difference of $106.6 billion. So, after everything that has happened since 1994 - including all pension holidays, investment losses, benefit changes, actuarial changes EVERYTHING - pensions are going to cost us $106.6 billion more than had none of this ever happened. SB1 (amended) will reduce this cost by $150 billion. So SB1 reduces benefits to pension members so the cost to the State budget is $233.8 billion - or $43.3 billion LESS than the original projection from the Pension Ramp. SB2404 reduces cost by $50 billion to $333.8 billion. Almost exactly half of the increase over the orginal pension ramp projection. SB1, through benefit reduction and member contribution increases, has pension members and retirees paying ALL of the increase in pension costs since 1994 (by whatever cause) - and an additional $43 billion over that. SB1 shares the increased cost (since 1994) 50/50 - without allocating by cause (be it pension holidays, benefit increases, investment loss, etc.). - Just The Way It Is One - Friday, May 10, 13 @ 4:10 pm: Why not just pass the Combined, 2-Step Pension Bill, and avoid all sorts of In-fighting, showdowns and the like, as a middle-road compromise–with the House version becoming Law, and if the Il. Sup. Ct. subsequently strikes it down as Unconstitutional when the Unions sue, then the Senate/Union Bill’s language clicks in as the Law as a fallback…?! At least it’s a decent compromise and worth a try! Sorry, comments for this post are now closed.