The great pension game
Wednesday, Nov 13, 2013 - Posted by Rich Miller
* A pension reform bill passed by the Illinois General Assembly last week has Gov. Pat Quinn in a bind…
The problem is that the Service Employees International Union doesn’t like the bill. At all. And with Mr. Quinn, SEIU has all kinds of bona fides, having donated at least $2.5 million to his campaign four years ago, when he was fighting for his political life.
Specifically, the park district’s largest union, SEIU Local 73, wants him to veto the bill, saying it unconstitutionally deprives retirees of benefits, and that the measure was changed over the union’s objections.
“I don’t think he should sign it,” said Local 73 President Christine Boardman. “I’m going to ask for a veto. The way they’ve written it, it is unconstitutional.” […]
The real question may be whether Ms. Boardman gets full support from SEIU’s powerful state council. That group’s head, Tom Balanoff, has been traveling abroad and was unavailable for comment. If he and the state council really decide to press the issue with Mr. Quinn — as opposed to, say, just nominally urging a veto — the politics of this matter could become extremely interesting.
Quinn brushed off questions about the bill yesterday, saying he hadn’t received the bill yet.
* More about the bill…
Under that plan, people would work until at least age 58 — up from 50 — and workers would pay 12 percent of their retirement costs — up from 9 percent. The park district would pay more, and cost-of-living adjustments for pensions would change.
* Eden Martin doesn’t like it…
The Park District deal increases annual pension funding dramatically between 2013 and 2019. The District’s funding burden will be held low in the near years but ramped up from $11 million in 2013 to a total of about $91 million in 2019, about eight times the funding only six years earlier.
That’s a far steeper ramp-up than the incline built into the state’s pensions schedules. Another way to say the same thing: It’s a far bigger deferral of the burden.
Why such an enormous funding deferral — and steep ramp-up — making funding (i.e. taxing) more burdensome in the future? Why seek to establish this as the pattern for reforming other Chicago pensions?
The only way to deal with an unbalanced budget is to borrow; and there are two ways to borrow. One is to issue bonds — a practice that has been well documented as problematic in a recent Chicago Tribune series. Another way is to incur obligations now — for services enjoyed now — but fund them in the future. The preeminent example of this is the incurring of pension obligations.
This timing mismatch between benefit and funding means that citizens and taxpayers today do not feel the full cost burden of the services they enjoy today. If they felt that full burden now — through current taxation — they would presumably be less willing to accept and fund them. [Emphasis added.]
And therein lies the game: Refuse to compromise on reform; force real, immediate budgetary pain; turn taxpayers against the workers; bust the pension systems and the unions.
- DuPage - Wednesday, Nov 13, 13 @ 10:18 am:
The park district could cut some money off what they pay NEW employees similar to the states tier2. To cut retirees COLA is clearly unconstitutional.
- RNUG - Wednesday, Nov 13, 13 @ 10:20 am:
The calendar doesn’t favor Quinn. Even if the GA takes the full 30 days before presenting it and Quinn takes the full 60 days to act, it’s still before the March primary vote.
- skeptical spectacle - Wednesday, Nov 13, 13 @ 10:23 am:
I think Mr Martin has a handle on it and Rich has summarized beautifully. It is an extremely dicey situation. Will be interesting politics to watch.
- dupage dan - Wednesday, Nov 13, 13 @ 10:28 am:
If you listen to some rhetoric, it would seem that this wouldn’t happen in a “unified” state gov’t - that which is controlled by only one party.
It almost seems as tho various groups within that unified gov’t are working at cross purposes to other groups and even working at cross purposes with itself, if that is possible.
Is it just happenstance that this legislation is sitting on Quinn’s desk at this particular time? Deliberate? Planned?
- tsavo - Wednesday, Nov 13, 13 @ 10:28 am:
http://seiu73.org/2013/11/08/legislators-pass-park-district-pension-reform/
See attached link from SEIU 73, reducing COLA to current retirees was never discussed.
- Bill White - Wednesday, Nov 13, 13 @ 10:29 am:
If SEIU and Eden Martin both don’t like the bill, that tells me that the General Assembly is more or less on the right track, whether or not this particular bill is the final answer.
- Skeeter - Wednesday, Nov 13, 13 @ 10:30 am:
Interesting contrast between this story and the last one [”Rauner Report”].
Unions may have backed Quinn last time, but since then, they haven’t been thrilled to say the least.
Quinn’s Lt. choice has an anti-union reputation.
On the other hand, if the GOP choice is Rauner, then they’ve got a guy who is about as anti-union as they come.
Do unions sit on their hands next year? Or do they conclude that a bad Dem is better than a Republican? Or do they decide that somebody like Rutherford may be the best choice? Will they encourage union members to vote in a GOP primary?
Should be interesting to see how it plays out. Glad I don’t have a horse in this race. Should be fun to watch.
- RNUG - Wednesday, Nov 13, 13 @ 10:30 am:
Quinn really is backed into a corner. If he vetoes the bill on constitutional grounds, he has completely undermined any possibility of passing state level pension reform. If he signs the bill, he loses union support. And if the GOTV foot soldiers aren’t there for Quinn next fall, will they show up to support the rest of the ticket?
About the only course Quinn has is to take the maximum time and then do some kind of amended veto, something like Blago’s “rewrite to do right”, to try to buy some time and hope the GA doesn’t adopt or override his changes. I just see lose, lose, and maybe lose as his options.
- 47th Ward - Wednesday, Nov 13, 13 @ 10:41 am:
I hope he signs it and tells SEIU to challenge it in court. The sooner we get some judicial guidance on pension reform, the better.
- walkinfool - Wednesday, Nov 13, 13 @ 10:41 am:
It’s a stalking horse, to see how these ideas play out with the Gov, the unions, and maybe the courts.
Real, overall pension reform is at stake.
- Norseman - Wednesday, Nov 13, 13 @ 10:45 am:
Quinn has no choice but to sign it. It’s the only pension reduction bill that has reached his desk dealing with any system. Madigan doesn’t take kindly to amendatory vetoes and a veto places Quinn in the awkward position of being the roadblock to some so-called “reform.”
- DuPage - Wednesday, Nov 13, 13 @ 10:46 am:
Quinn could do the amendatory veto the part of cola of existing retirees and existing employees. He could explain that he removed the unconstitutional part of the bill while passing the other parts thus achieving some pension reform.
- ChefKief - Wednesday, Nov 13, 13 @ 10:48 am:
Don’t forget that Quinn is currently hustling petition signatures and I am sure SEIU is helping in that effort.
- downstate hack - Wednesday, Nov 13, 13 @ 10:52 am:
Quinn is first and foremost a political animal. He will bow down to the unions and veto the bill.
- Grandson of Man - Wednesday, Nov 13, 13 @ 10:58 am:
“If he signs the bill, he loses union support.”
The unions are kind of stuck with Quinn. It could be better for unions if Rutherford is the GOP gubernatorial candidate. It would be a fresh start with someone who indicated he’s willing to be fair to unions and respect the state constitution. It would at least give unions another candidate to look at. I’m willing to hear more from Rutherford on these issues.
If Rauner becomes the nominee, then there would be much more incentive for unions to support Quinn.
In the great unlikelihood that a third party candidate emerges with a real chance to become governor, unions have very few choices.
- dupage dan - Wednesday, Nov 13, 13 @ 11:02 am:
Really, who would SEIU support if not Quinn? I suppose they could stay out of the election. If other unions join in that non-action, that could really hurt Quinn, much like endorsing someone else would.
AV seems the way to go - string it out as long as you can all while making the appropriate sounds, as long as it doesn’t sound like a snake hissing.
- Mr. B.A. - Wednesday, Nov 13, 13 @ 11:05 am:
I truly believe that Rutherford should become the unions choice for Governor now. He is the only candidate to state that the employees rights need to be taken into consideration. The sooner we do this, maybe Quinn will come to his senses…
- Hit or Miss - Wednesday, Nov 13, 13 @ 11:08 am:
I for one do not like major sections of the bill. I think that parts of the bill are probably unconstitutional and the mismatch between the benefits and their funding is bad for taxpayers in the long run.
With that said, I think that Quinn should sign the bill as soon as possible. The problems with the bill can then be used as a test case for the states much larger pension problems. I would hope that the SEIU would go to court quickly so that everyone has some judicial guidance on at least some of the limits of the pension reform options available. As I see it, the sooner the issue goes to court the better it will be.
- Frank - Wednesday, Nov 13, 13 @ 11:09 am:
Three thoughts:
- If both SEIU and Eden Martin are against it, it’s probably a pretty good compromise.
- The split between the trade unions (who mostly supported the legislation) and SEIU on the park dist. bill was the most underreported political story of the veto session.
- Quinn has another potential problem with this bill. If he signs it, a legal challenge will be filed immediately. That could give the GA another excuse to delay voting on the state pensions. “Let’s wait and see what the Supreme Court says about the Park Distict bill” could become a widely held sentiment under the dome. I’m certain Quinn wants a special session and a state pension bill passed before the end of January. Now that he’s in General Election mode, the last thing he needs is to give another State of the State address about pensions…which will only highlight his eventual Republican opponent’s top talking point: Pat Quinn’s inability to “get things done.”
- RNUG - Wednesday, Nov 13, 13 @ 11:14 am:
Frank,
Quinn has a bigger problem to address in both his State of the State and Budget speeches … the sunsetting of the temporary income tax hike. That’s the real elephant in the room …
- Jeff Trigg - Wednesday, Nov 13, 13 @ 11:15 am:
I’d bet the Green Party or some Independents would give the unions what they want. Too bad the unions only believe in the state constitution when it serves their greedy interests. They might’ve had a better choice next time, if only to exert enormous pressure on Quinn to do what they want for fear of losing their votes.
All elections shall be free and equal.
- dupage dan - Wednesday, Nov 13, 13 @ 11:29 am:
So much to do and so little time. What’s a governor to do? ROAD TRIP!
- Mouthy - Wednesday, Nov 13, 13 @ 11:42 am:
“Really, who would SEIU support if not Quinn?”
Until the labor unions revolt and cost a high profile democratic defeat they will always be used as a punching bag.
- Norseman - Wednesday, Nov 13, 13 @ 11:51 am:
=== Too bad the unions only believe in the state constitution when it serves their greedy interests. ===
Nice drive-by. But try showing us that you have some actual evidence rather than spouting off idiotic rhetoric.
- Cassandra - Wednesday, Nov 13, 13 @ 11:53 am:
If the public employee unions decide not to support Quinn, they lose power and influence when he wins anyway. They may huff and puff, but in the end they’ll support him on the legitimate basis that it is better for their members.
This is particularly true in an off-election year when the Democrats will probably be feeling besieged, because of continuing problems with the healthcare rollout plus the usual gridlock in Washington. They’ll be wanting their traditional supporters to circle the wagons across the country. The unions aren’t going to abandon the Democrats in this environment.
- AFSCME Steward - Wednesday, Nov 13, 13 @ 12:05 pm:
Jeff Trigg
Please tell us when “the unions” fought for unconstitutional legislation.
“Too bad the unions only believe in the state constitution when it serves their greedy interests. They might’ve had a better choice next time, if only to exert enormous pressure on Quinn to do what they want for fear of losing their votes.
All elections shall be free and equal.”
- geronimo - Wednesday, Nov 13, 13 @ 12:07 pm:
I agree that this, or something, needs to get to the courts. All this uncertainty is creating misery and personal uncertainty in everyone connected to public pensions. Not spending a dime because we don’t know what next year will bring, not being able to plan. Get it over with. See what the court says and lets’ move on with life.
- RNUG - Wednesday, Nov 13, 13 @ 12:11 pm:
Cassandra @ 11:53 am:
I disagree. That is the perfect time to flex the union muscle, when the Democrats need it the most.
- Former Merit Comp Slave - Wednesday, Nov 13, 13 @ 12:17 pm:
How does Rutherford support the unions on pension reform constitutionality and also support letting the tax hike expire? Don’t think you can do both regardless of your party affiliation
- Cassandra - Wednesday, Nov 13, 13 @ 12:28 pm:
I don’t know, RNUG. I live with a Democrat. We can have a long, heated discussion about the sins of the Democrats, i can win every point, and then at the end he says “But I couldn’t vote for a Republican.”
I suspect there are are a lot of union folks like that.
- RNUG - Wednesday, Nov 13, 13 @ 12:44 pm:
Cassandra @ 12:28 pm:
I hear you; I know quite a few like that.
But some of us learn. I grew up in a union family; both grandfather and father were founders of a local. Mother came from a family of farmers, shopkeepers and tavern owners. I got to see both sides of things.
I also married a Democrat. I still remember the first time we got into a major discussion on politics … I just looked at her and said: “Honey, in our income bracket, you ARE a Republican!” These days she’s further to the right than I am …
- east central - Wednesday, Nov 13, 13 @ 12:49 pm:
Interesting situation. A lot of likely primary voters if you count up the membership in the 5 major state pension systems and in all the other local systems, plus add in family members.
Is it enough to make Rutherford the nominee if pension system members who are Democrats cross over? What if Rutherford becomes an advocate for an SB2404-type plan that has union support? His math would be only somewhat worse than any other candidate that claims their pension solution will allow the income tax increase to expire.
- Jeff Trigg - Wednesday, Nov 13, 13 @ 12:58 pm:
Norseman - 25 years without a single Independent candidate able to get on the ballot in IL for the GA. Resulting in Lee v. Keith that ruled Illinois ballot access laws were in violation of the 1st and 14th Amendments. 300 signatures needed by a Democrat to run for the IL Supreme Court but 25,000 signatures for an independent candidate. Tell me that jives with Article III, Section 3 of the IL Constitution. If I listed all of the union leaders and lawyers involved in kicking competition off the IL ballots using those unequal ballot access standards, it would take years.
AFSME Steward - “Please tell us when “the unions” fought for unconstitutional legislation.” Every time they gave a penny to politicians and parties (like Madigan and his state Democrats) who wrote the anti-democratic laws that violated basic Constitutional rights concerning democratic elections, and every time they gave money to politicians who refuse to reform the obviously unconstitutional ballot access laws still on the books.
Please show us even one instance since 1980 when any union in IL has said one word about our unequal ballot access laws. They file lawsuits all the time to uphold the pension provision in our state constitution but have never filed a lawsuit to uphold Article III, Section 3 of our state constitution. Its more than obvious that the unions piling campaign cash into IL politicians’ pockets could care less about the free and equal elections clause in our state constitution. I’m sorry if the truth hurts.
Heck, even most Libertarians would agree with the unions that our state constitution forbids diminishing pension benefits and that we should follow that rule of law. They probably would want to amend that part, but they’d uphold the rule of law.
If you don’t like facing a choice between two candidates who both want to diminish the pensions of public union members, then maybe its time to finally put at least some effort into upholding the free and elections clause of the state constitution like you are with the pension protection clause.
- RNUG - Wednesday, Nov 13, 13 @ 1:09 pm:
Jeff Trigg @ 12:58 pm:
I think that’s partially an unfair shot. You’re overlooking the purpose of the union. It’s the union’s job to get and protect jobs and benefits for their members. That’s what the union members are paying their dues for.
It is NOT any union’s job to ensure open and free public elections. That’s up to whatever civic group decides it is an issue for them.
- Grandson of Man - Wednesday, Nov 13, 13 @ 1:11 pm:
“Democrats will probably be feeling besieged, because of continuing problems with the healthcare rollout.”
If they did, it woud be foolish, considering that the political party trying to spin the narrative has a record-low approval rating and is mostly responsible for record-low congressional approval. Democrats in Illinois have a few things for which they may puff their chests out a bit, SSM and MMJ legalization, two issues that have attracted national attention.
- RNUG - Wednesday, Nov 13, 13 @ 1:12 pm:
Former Merit Comp Slave @ 12:17 pm:
On the statement’s I’ve heard from Rutherford, he’s acknowledged the need for revenue and hedged on letting the income tax expire … which is being a bit more honest than the other three GOP wannabes.
- Name/Nickname/Anon - Wednesday, Nov 13, 13 @ 1:17 pm:
I don’t understand how Quinn could take the stance that it is unconstitutional. Aren’t the Park changes essentially the same changes Quinn asked for from the State systems?
- Old and In The Way - Wednesday, Nov 13, 13 @ 1:18 pm:
Jeff Trigg
Talk about generalizations! First you can blame the Dems alone for the exclusion of Independents on the ballot. The GOP is without a doubt just as guilty and responsible. You forget the stuff that Thompson and Ryan pulled in this regard. Edgar less so but come on both parties see this as in their best interest so get off the blame Madigan alone stuff.
As for equating union donations with support for ballot exclusion you are making a pretty big leap here. It’s just not how things work in party politics. If it did then you would have to blame not only Rublicans but Libertarians and anyone else who contributed time and or money to either party. Then there is the whole Green Party issue. No I think that in the end you are just on a blame the unions for anything you can rant and to that I suggest you get a life……and another blog with fewer informed readers.
- mythoughtis - Wednesday, Nov 13, 13 @ 1:25 pm:
==Please show us even one instance since 1980 when any union in IL has said one word about our unequal ballot access laws. ==
Unions exist to get the best working conditions, pay and benefits for their members. Although they have a political fund to be used to support candidates that support union positions, they are not governmental bodies. They do not control access or anything else about the election itself.
It’s also a matter of personal opinion as to whether or not IL has unequal ballot access. There are rules, and candidates must work within them. If they send out underlings who don’t understand the rules, then it is their own fault if they don’t get on the ballot.
- Mr. B.A. - Wednesday, Nov 13, 13 @ 1:57 pm:
Again, I may ask, why wouldn’t most union members pick up a Republican primary ballot and vote for Rutherford? He is far more palatable than the other Republicans, and with union support, he may just the nomination. Then watch Quinn backpedal on pension reform…
- AFSCME Steward - Wednesday, Nov 13, 13 @ 2:24 pm:
Giving money to politicans is a protected constitutional right. Because you don’t like the politicans they contribute to does not make it unconstitutional.
If you think the Democrats have passed unconstitutional laws, file a lawsuit challenging the laws. If you think ballot access laws are unconstitutional, challenge them in court.
Just because you don’t agree with a law does not make it unconstitutional.
Do your whining somewhere else, dope.
“Every time they gave a penny to politicians and parties (like Madigan and his state Democrats) who wrote the anti-democratic laws that violated basic Constitutional rights concerning democratic elections, and every time they gave money to politicians who refuse to reform the obviously unconstitutional ballot access laws still on the books.”
- Tom Joad - Wednesday, Nov 13, 13 @ 2:36 pm:
Mr. BA: Rutherford can’t run the few programs he has in his office now. That’s why “most union members” won’t pull a Republican ballot.
- RNUG - Wednesday, Nov 13, 13 @ 2:44 pm:
Unions could always pull a GOP primary ballot, vote for Rutherford to scare Quinn, and if they get enough backtracking, “come home” for the general election.
- A guy... - Wednesday, Nov 13, 13 @ 3:08 pm:
This is difficult. The math is real. Quinn gets it. Madigan gets it. These solutions are only going to get more drastic as time goes on. I’ve seen similar formulas for 4 years get recalculated based on delay. It’s tough, but it’s real if defined benefits are going to remain. I’m not gleeful about this, but very realistic about how you solve a complicated math problem. There will be more of this.
- Former Merit Comp Slave - Wednesday, Nov 13, 13 @ 3:34 pm:
Thanks RNUG that makes all the difference
- tsavo - Wednesday, Nov 13, 13 @ 4:00 pm:
http://voices.suntimes.com/early-and-often/politics/quinn-mum-on-chicago-park-district-pension-legislation-i-havent-seen-the-bill-yet/
Gov. Quinn mum
- Norseman - Wednesday, Nov 13, 13 @ 4:03 pm:
California got it and their bond ratings were increased. By the way, their pension reform only affected new employees. Something the State of Illinois did years ago. California’s course of action which evidently placated the rating agencies included tax increases and budget cuts.
Constitutional solutions can be found if the leadership is there to search for them. The problem is that leadership in Illinois has chosen the easy path too many times in the past and left us with this math problem. Even if they enact unconstitutional pension reduction, Illinois’ fiscal problems will continue because this leadership pattern is not likely to change.
- dupage dan - Wednesday, Nov 13, 13 @ 4:26 pm:
Cassandra,
I appreciate your situation. I grew up in a progressive home. My parents were practicing liberals. I was a leftist. I married into a family that had ties to the Communist Party.
Over a period of many years I shifted right. We agreed to disagree. I, too, would point out the failings and she would agree but, then, say she would vote democratic anyway. Interestingly, it was the war that changed her mind, not me. She still has left leanings but vehemently disagreed with knee jerk anti-war folks when many abandoned Israel.
You are right, there are many union folks out there who will vote democrat. Not all of them but most.
- AFSCME Steward - Wednesday, Nov 13, 13 @ 4:34 pm:
There are actually quite a few union people seriously looking at Rutherford. I do not know if the unions will offically endorse Rutherford, but he is a viable option.
“You are right, there are many union folks out there who will vote democrat. Not all of them but most.”
- pensioner - Wednesday, Nov 13, 13 @ 6:28 pm:
@ Jeff Trigg What greedy interests fed your family?
- DuPage - Wednesday, Nov 13, 13 @ 7:09 pm:
@Norseman,=California got it and their bond ratings were increased.= California also ended the practice of state tax kickbacks to municipalities. Illinois should do the same. State tax revenue should be used to pay state obligations.
- fastcat - Wednesday, Nov 13, 13 @ 8:33 pm:
I found this video on California secret plan to gut public pensions. It this what is going on in Illinois?
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=10817
- Former Newfie - Thursday, Nov 14, 13 @ 5:19 am:
“It’s the union’s job to get and protect jobs and benefits for their members. That’s what the union members are paying their dues for.” And yet the AFL-CIO fireS their own for no given reason, as they did to my son-in-law, a father of five.
- RNUG - Thursday, Nov 14, 13 @ 7:18 am:
SJ-R this morning is reporting the GA may be back in town Dec 3 on pension reform.