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*** UPDATED x1 *** Nekritz: House pension plan saves more state dollars

Thursday, May 30, 2013 - Posted by Rich Miller

* Rep. Elaine Nekrtitz’s spokesman has responded to the We Are One coalition’s research which shows that their pension reform plan saves more than the House’s plan off the unfunded liability…

This new report suggests more significant savings from SB 2404 than SB 1 if you calculate in health care savings from employee choices. But there are a couple of important points.

Senate Bill 1 makes important changes to how Illinois calculates and funds its pension systems according to actuarial science — changes intended to ensure we pay into these systems what is required to meet our obligations. These actuarially appropriate changes are not included in Senate Bill 2404.

Assuming the health care numbers cited are correct, unfunded liability savings are not the only important calculation here. Senate Bill 1 saves a proven $180 billion off the state’s 30-year pension spending — far more than anything saved under SB 2404. And it also provides certainty, predictability and a sufficient solution for a massive problem where SB 2404 falls far short. We remain hopeful this will be considered and SB 1 approved before session ends tomorrow.

So far, no response to the union coalition’s other claim, that the House bill will force teachers into Social Security, driving up costs.

*** UPDATE *** Here’s the Nekritz spokesperson answer on the Social Security question…

Simple answer is it’s an issue that’s not immediate — probably 10-12 years down the road — and could be addressed later. It shouldn’t stand in the way of a real solution like SB 1.

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  1. - Bill - Thursday, May 30, 13 @ 1:03 pm:

    ==And it also provides certainty,==
    What certainty? That it is unconstitutional and will save nothing when the courts throw it out?

  2. - Tom - Thursday, May 30, 13 @ 1:09 pm:

    Her silence on the Social Security question is deafening.

  3. - Frenchie Mendoza - Thursday, May 30, 13 @ 1:10 pm:

    As a kid, there was a gag with a fortune cookie that you’d read the fortune out loud and then add “… in bed” to the end of the fortune. Then: rousing laughs all around.

    I can’t help but read these dueling “yeah, but mine saves more than yours” posts today and think about a similar gag — adding “… out of the pockets of retirees” after any sentence that crows about the potential savings.

    The more “savings”, the less money for retirees. I mean, maybe it’s only me that thinks this: but it’s incredibly craven to tout these massive savings numbers without (I would hope) realizing how the savings will magically appear.

    I hope legislators understand this, too, and see the “mine is bigger than yours” thing as remarkably crass and (dare I say it) immoral.

    Never mind the constitutionality — which will, I know, be solved eventually. But come on, man. Moral blinders with a thing this big — and a thing so fraught with risk and liability — is a mark of someone with a hollow core.

  4. - rusty618 - Thursday, May 30, 13 @ 1:19 pm:

    It “saves more state dollars” by taking away more from state employees, teachers and retirees. I’m sure most of these folks would be willing to pay in more, if they would get the return that was part of the benefits package when they accepted the job 30 or 40 years ago.

  5. - Anonymiss - Thursday, May 30, 13 @ 1:29 pm:

    From Hinz:

    Biss concedes the Social Security issue above.

    What say you, Rep. Nekritz? Are you going to lead the charge to compel a property tax hike?

  6. - Cassiopeia - Thursday, May 30, 13 @ 1:29 pm:

    Great line Frenchie “a mark of someone with a hollow core.”

    That pretty much sums up Nekritz with her silence to the SS question and the fact that all of the savings come out of the pockets of retirees who retired with a promise that they assumed was guaranted.

  7. - Ahoy! - Thursday, May 30, 13 @ 1:30 pm:

    We should keep with the recent Illinois tradition of passing legislation that creates another problem down the road and only deal with it when it after it becomes a crisis.

  8. - Bobbysox - Thursday, May 30, 13 @ 1:33 pm:

    For goodness sakes, Elaine. You just admitted that if your bill manages to pass Illinois Constitutional muster it is fatally flawed in that it only has a life expectancy of 10-12 years when it was supposed to address the issue over the next 30 years! And forever. A “real solution?” A real Band-Aid, maybe, and the sticky part just wore off!

  9. - Norseman - Thursday, May 30, 13 @ 1:34 pm:

    === It’s a problem but we’ll deal with it later ===

    Where have we heard that before?

  10. - Michelle Flaherty - Thursday, May 30, 13 @ 1:38 pm:

    I would be glad to bill you later for pension reform today.

  11. - Bill - Thursday, May 30, 13 @ 1:40 pm:

    === It’s a problem but we’ll deal with it later ===

    That should kick the can down the road far enough until they are all safely out of office and collecting pensions of their own. Well… maybe not Madigan.

  12. - Quinn T. Sential - Thursday, May 30, 13 @ 1:44 pm:

    {it’s an issue that’s not immediate — probably 10-12 years down the road — and could be addressed later. It shouldn’t stand in the way of a real solution like SB 1.}

    This is more of the same; legislative malpractice.

    This attitude alone is reason enough as to why should not have been re-elected.

  13. - frustrated GOP - Thursday, May 30, 13 @ 1:48 pm:

    “Simple answer is it’s an issue that’s not immediate …shouldn’t stand in the way of a real solution like SB 1.”
    Wow, so that’s it? We can’t fix so let’s punt it deep. Ok, guess its worked for MJM for 30 years why not 30 more.
    Someone be an adult, and do something about meaningful tax and pension reform to really solve the problem. Stop punting it off to the next generation.

  14. - Pot calling kettle - Thursday, May 30, 13 @ 1:49 pm:

    SB 1 seems to save the pension systems on paper but not in fact. The Senators will be shy about wasting a difficult vote.

  15. - steve schnorf - Thursday, May 30, 13 @ 1:49 pm:

    See the road? See the can?

  16. - Frenchie Mendoza - Thursday, May 30, 13 @ 1:52 pm:

    … It shouldn’t stand in the way of a real solution like SB 1.

    Wow — and without the slightest bit of irony. If this isn’t proof of how we got here in the first place, I don’t know what is.

  17. - veritas - Thursday, May 30, 13 @ 1:53 pm:

    Ralph Martire has provided the only evidence-based solution I’ve seen to date. Cutting benefits is not only unconstitutional, it won’t solve the problem! We need a tax structure in Illinois that addresses the underlying issue of too little revenue for expected and needed services.

  18. - Formerly Known As... - Thursday, May 30, 13 @ 1:53 pm:

    === Here’s the Nekritz spokesperson answer on the Social Security question ===

    And as to the question of savings?

  19. - Frenchie Mendoza - Thursday, May 30, 13 @ 1:58 pm:

    re: “the only real solution …”

    I must admit, though, the finesse of using “real” in the context of solutions is testicularly fortitudinous. Sounds like someone is dusting off and cranking up the Blagojevich propaganda machine.

    I mean, there is — clearly — a single real solution here. The rest are phony. Fictional. Unreal. It’s so obvious when we see it laid bare like this.

    Good thing Nekritz is savvy enough to uncover the truth.

  20. - Decaf Coffee Party - Thursday, May 30, 13 @ 2:01 pm:

    Nekritz’s response speaks volumes. These people have no consciences (or maybe no consciousness). The arrogance is about as disturbing as their glee over taking money from people who earned it. They define a $100 billion problem and seek $187 billion from employees and retirees, and just shrug off as a mere technicality what they now admit might be a Social Security mess for local taxpayers. We do have a systemic problem…and it ain’t pension benefits.

  21. - CJA - Thursday, May 30, 13 @ 2:02 pm:

    Typical IL politics, don’t address today what you can put off until tomorrow…unless you are talking about $$$. If a bill promises to save $30B in 30 years, they will gladly spend the $30B now.

  22. - Kick the Can Down the Road - Thursday, May 30, 13 @ 2:08 pm:

    So Elaine, no real solution!! Let someone else deal with this 10 to 12 years later when your retired. Pass it along must be your middle name.
    Support SB2404 and have it over and done!!

  23. - kerfuffle - Thursday, May 30, 13 @ 2:10 pm:

    . . . it’s an issue that’s not immediate — probably 10-12 years down the road — and could be addressed later. . .

    Isn’t this how we got in the current mess in the first place? Let’s kick the can down the road and let a future GA deal with this issue!

  24. - Bill - Thursday, May 30, 13 @ 2:11 pm:

    From the Senate gallery you usually see the CapFax blog on many, if not most, Senators’ computers. I hope they are tuned in today when they are voting.

  25. - Makandadawg - Thursday, May 30, 13 @ 2:20 pm:

    “Amidst a fiscal crisis, the common people of France were increasingly angered by the incompetency of King Louis XVI and the continued indifference and decadence of the aristocracy.”Quote from Wikipedia about the French Revolution:

  26. - dupage dan - Thursday, May 30, 13 @ 2:29 pm:

    === From the Senate gallery you usually see the CapFax blog on many, if not most, Senators’ computers. I hope they are tuned in today when they are voting ===

    Turn on, Tune in, Vote 2404.

  27. - RNUG - Thursday, May 30, 13 @ 2:38 pm:

    Nekritz’s comment is typical “kick the can down the road” thinking …

  28. - biased observer - Thursday, May 30, 13 @ 2:50 pm:

    I think she was merely responding to the “story” which developed regarding social security that was blowing up a couple hours ago, right before a potential really big vote. makes sense to me. I know it is really difficult sometimes to hear other peoples opinions on important topics, especially when they are antithetical to our own personal interests. but it doesn’t mean they are devils or stupid or un-American. this is how the process works, and it is painful and incredibly inefficient at times.

  29. - Ready To Get Out - Thursday, May 30, 13 @ 2:54 pm:

    RNUG….and maybe irresponsible?

  30. - anon - Thursday, May 30, 13 @ 3:13 pm:

    Years & Years & Years of SB 1
    30 Years - Squeeze all pension cuts out of the hides of retirees, requiring the fix by 2045 under the current flawed pension ramp.
    10 Years - Oops, a Nekritz $2 Billion property tax increase to pay Social Security for teachers.
    50 Years - CTBA’s flat funding plan (aka mortgage refi) of the pension liability, with virtually no cuts in benefits.

    Next week - What will the Civic Comm & Trib say?

  31. - Decaf Coffee Party - Thursday, May 30, 13 @ 3:20 pm:

    Seems to me $50 billion (or more if you count the health care piece) is plenty of pain for teachers, state employees and retirees. Taking the entire $100 billion (actually $187 billion) is just plain punishment and plundering.

    Everyone boasting that theirs is bigger when every dollar is coming out of the pockets of retirees who earned their pensions is really poor form.

    Shrugging off the potential impact of Nekritz’s “down-the-road” Social Security landmine just shows legislators’ disdain not only for state employees and retirees, but for every local taxpayer.

  32. - Anonymous - Thursday, May 30, 13 @ 3:22 pm:

    I guess everyone in Springfield has forgotten that it was Madigan et al that created this mess. It would appear that the intent is to punish the only innocent parties….the state employees that did nothing wrong. No only are they trying to place all the hardship on employees and retirees but it seems we will be paying for through the nose to supply more income to the state. AKA more waste…more corruption. What did we do wrong besides electing the wrong people?

  33. - Algonquin J. Calhoun - Thursday, May 30, 13 @ 3:30 pm:


    I know I risk feeding the troll, but your condescending nonsense puts you further down the scale of taking your missives seriously. Nekritz’s flack’s comment is *exactly* kicking the can down the road, which got us into this mess in the first place. Your excuses are laughable.

  34. - reformer - Thursday, May 30, 13 @ 3:59 pm:

    If Nekritz and Madigan get their way to shift employer costs to school districts, then it won’t be the state’s problem when the feds mandate Social Security coverage for teachers because SB 1 has so degraded the pensions. Besides, will Nekrtiz sitll be around in 10-12 years to “fix it”?

  35. - Sir Reel - Thursday, May 30, 13 @ 4:00 pm:

    The arguing over which plan saves the most could lead to the ultimate solution - simply cancel public employee pensions. That leaves a $0 pension liability. Makes about as much sense. I’m surprised some legislator hasn’t proposed it yet, of course exempting legislators’ pensions.

  36. - archimedes - Thursday, May 30, 13 @ 4:23 pm:

    Another observation. From the TRS actuary analysis, TRS payments will be reduced by $130 billion. So, of the $187 billion payment reduction, TRS is 70% of the reduction. Yet, it is 50% of the unfunded liability and 50% of the regular employer normal cost total.

    SO - where is that “extra” savings? The TRS members will be paying more than the value of the pensions - paying for 24% of the State’s unfunded liability.

    The Tier 2 members will be paying 11.4% for a benefit that is worth 6% of salary.

    Will that remain for the next 30 years? Or will it be changed - further eroding the projected savings.

  37. - RNUG - Thursday, May 30, 13 @ 4:29 pm:

    Sir Reel @ 4:00 pm

    It won’t affect the existing unfunded liability one cent. The State will still have to pay everything that has already been earned … and based on the IL court cases to date, that means every “state” employee who is on the payroll as of the passage of the bill, including their yet to be earned benefits.

  38. - Anonymous - Thursday, May 30, 13 @ 4:31 pm:

    I hope that the legislators that vote for Madigan’s bill get something really good for it. Because we are not going to forget what they did.

  39. - Anyone Remember? - Thursday, May 30, 13 @ 4:33 pm:

    Michelle Flaherty

    == I would be glad to bill you later for pension reform today. ==

    Wasn’t that what Jim Edgar said in 1994?

  40. - Earl Shumaker - Thursday, May 30, 13 @ 5:28 pm:

    What has evolved over these years in Springfield is a democratic-process facade. Instead of transparency, what we have is Chicago-type politics of wheeling and dealing behind closed doors. What we have are elected officials taking a willy-nilly approach to the Illinois Constitution. No doubt there are legislators who know that Madigan’s proposed pension legislation if passed would be a violation of the Illinois Constitution Apparently these legislators feel they are above the rule of law and can pick and choose only the segments of the Illinois Constitution which suits their needs and the needs of special interests groups.
    The end result is that we have elected officials whose votes are tied into enhancing their re-election prospects and a budgetary process that can only be described as a “Rob Peter to Pay Paul” policy.

  41. - mythoughtis - Thursday, May 30, 13 @ 5:45 pm:

    I agree with Decaf Coffee Party. This representative couldn’t show greater contempt for future retirees if she tried. Most retirees are going to live more than 10-12 years after they retire. They are supposed to suffer because she wants name recognition today?

  42. - biased observer - Thursday, May 30, 13 @ 5:55 pm:


    thanks for the encouragement, my friend. I hope it makes you feel better to have written that. I also hopes it makes you feel better to get on this blog and read postings which are not reflective of the public at large. i’m sorry, but the folks who follow Miller are not a representative slice of the Illinois population. and I love miller’s stuff and the postings on here, notwithstanding your “encouragement.”

  43. - Anonymous - Thursday, May 30, 13 @ 6:05 pm:

    … blog and read postings which are not reflective of the public at large


    You say this. You repeat this. Just because you say this and repeat this doesn’t make it so. There is no appetite among the “public at large” to curtail pensions. Who says this? Who writes this?

    It simply isn’t so. And your saying it is not only misleading — it’s flat out wrong. Why do you keep repeating this? What poll are you looking at it? What web page are you reading? What special interest claims this is so?

  44. - Mama - Thursday, May 30, 13 @ 6:10 pm:

    What about the people who are currently on S.S. - can they wait 10 years?

  45. - Lost in the Weeds - Thursday, May 30, 13 @ 6:29 pm:

    “. . . it’s an issue that’s not immediate — probably 10-12 years down the road — and could be addressed later. . .”


    What is the immediate crisis that is being fixed?

    So the plan is to fix a 30 year immediate problem followed by a perpetual problem, with a perpetual problem after 10-12 years.

    This is about deflecting any costs to local government (think cost shift and pension reduction) or the federal government (think SS and federal health care law). This theory probably partially fails when SS and federal health care benefits dry up.

    Not sure when the SS problem occurs, it seems that could start sooner rather than later if those in the Illinois retirement system now will not meet SS criteria when they retire or later in retirement.

    Suggest retirement investment plan in areas of cat food and cheap housing for seniors due to uncertainty.

  46. - kimocat - Thursday, May 30, 13 @ 6:39 pm:

    I hope that the courts rule in favor honoring contract law. If they don’t, I might as well have gone to work for Bernie Madoff or Enron.

  47. - Algonquin J. Calhoun - Thursday, May 30, 13 @ 7:00 pm:

    Hey B.O. -

    I’m interested in the rule of law. You’re interested in violating the Constitution, and you say (with no proof), “the people” are for it.

    P.S. Learn to use the CAPS key - its pretty easy, makes you look a bit more intelligent.

  48. - wordslinger - Thursday, May 30, 13 @ 7:39 pm:

    SB1 just got creamed in the Senate. According to Sun-Times, Madigan blames “lack of leadership” in the Senate and is “going to the mansion.”

    Presumably the governor’s mansion, not the Mansion on the Hill, or Mansion in the Sky, or Detox Mansion.

  49. - RNUG Fan - Thursday, May 30, 13 @ 7:40 pm:

    L’Etat c’est moi Madigan accuses a body that follows rule of law for having no leadership
    I am sure the Madigan fans here will come up with something but if they have 80 votes for 2404 then maybe They can do something about their leadership

  50. - mid-level - Thursday, May 30, 13 @ 7:47 pm:

    I can’t shake this feeling that I’m in some type of matrix and an oracle already knows the outcome and is manipulating events to guide me to a predetermined conclusion.

  51. - RNUG - Thursday, May 30, 13 @ 7:55 pm:

    wordslinger @ 7:39 pm:

    Someone has to say this … the Cubs current W/L record is 68%, this bill got 42%

  52. - Rudy - Thursday, May 30, 13 @ 7:56 pm:

    “That was the compromise” = revisionism

    “lack of leadership” = not enough mushrooms

    “I’m going to the mansion” = I’m gonna get my gun

  53. - Bill - Thursday, May 30, 13 @ 7:59 pm:

    Thanks President Cullerton and the caucus for showing real leadership. The other chamber could learn a few things by watching you.

  54. - wordslinger - Thursday, May 30, 13 @ 8:00 pm:

    RNUG, in fairness, the Cubs percentage has spiked during the Sox series this week.

    Travis Wood with a granny off Peavy? The wind must have been howling out.

  55. - RNUG Fan - Thursday, May 30, 13 @ 8:11 pm:

    Wind was howling out ……
    Leadership is handing this issue to Elaine Nekritz…..Oh wait…….

  56. - RNUG Fan - Thursday, May 30, 13 @ 8:15 pm:

    Squeezy reacted …PQ you are a disappointment to the people of Illinois Everyday

  57. - Cheswick - Thursday, May 30, 13 @ 8:30 pm:

    Sorry if this has already been covered, but is there anything written in stone that says pension reform has to be accomplished during this session?

  58. - RNUG Fan - Thursday, May 30, 13 @ 8:56 pm:

    No Cheswick If 2404 has a supermajority it can be voted on anytime

  59. - RNUG Fan - Thursday, May 30, 13 @ 9:14 pm:

    The mushrooms barely passed the mini cost shift that the cowed university presidents agreed to take . Rather than penalize staff and students we could cut the salaries of some university presidents to pay for it

  60. - No sense. - Thursday, May 30, 13 @ 9:32 pm:

    This plan they have with the pension will never work they stopped paying into it and borrowed from it. So if they did it once why not do it again the problem lays on them paying it back not hurting the workers of the State of Illinois that gave their service to the citizens of our great state,

  61. - RNUG - Thursday, May 30, 13 @ 10:08 pm:

    word & myself @ 7:55,

    The Cubs record is still better, but I really messed up calculating the percentages (Cubs .423, these amendments .276). And yes, the recent run helped.

    Can I blame it on the OTC cold medicine I’m taking (and not proof reading my post)?

  62. - Anonymous - Thursday, May 30, 13 @ 11:01 pm:

    No Sense-after the pension crisis began, the law was changed. I don’t have it in front of me, but I believe the GA is required to pay 100% of a budget term’s pension obligation by the end of the following fiscal year. There was no requirement like this prior.

  63. - RNUG - Friday, May 31, 13 @ 12:10 am:

    Cheswick @ 8:30 pm:

    No, pension “reform” doesn’t have to be done this session. There is no “crisis” this year. The driving force is to free up money for discretionary new spending … not to take the savings and put it into the pension funds.

    What will have to be done at minimum, this GA or next GA, is extend or make permanent the temp 2% income tax. The schedule of that revenue going away is what drives the various doomsday predictions of pensions eating up the budget.

    To oversimplify things, right now under the temp increase the State is taking in about $35B in revenue from all sources. Right off the top, about $10B goes to a combination of pension funding and bond debt service. The other $24B or so is what the State pays all their other bills out of. Losing the 2% creates a between $3.5B to $7B hole. If you don’t extend the temp tax, then you have to cut spending on all State programs by between 15% to 29%. We’ve already seen 10% - 19% cuts in total the past several years; there isn’t any place left to really cut … so the State needs to, at minimum, keep the current revenue base. Extending the temp income tax is pretty much a no-brainer from a math perspective. From a political perspective, it’s a whole ‘nother ball game.

    The sad part of the whole thing is that doesn’t solve anything; all that does is kick the structural revenue problem down the road a couple of years.

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