Capitol Fax.com - Your Illinois News Radar » Here we go again
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Here we go again

Thursday, Mar 27, 2014

* Tribune

Quinn sought to portray his fiscal blueprint as part of an effort to end a cycle of budget game-playing by his predecessors that left state finances in shambles. He said part of his strategy was the controversial pension overhaul law last year that he argued would dramatically cut retirement costs and let more tax revenue flow to schools, health care and other services.

Rauner contends that Quinn’s pension alterations are too timid and will save the state far less than the governor contends. That argument may have gotten a boost Wednesday when the state’s bipartisan fiscal forecasting agency revised downward by several billion dollars its long-term savings projection for the pension overhaul.

* That snippet may have been based on this Bruce Rauner campaign press release…

On the same day of Pat Quinn’s budget address in which he broke his promise to keep the 67% personal income tax temporary, the Commission on Government Forecasting and Accountability released an analysis of the so-called pension reform law that shows it will save $22.6 billion less than was promised when the legislation was passed.

* This isn’t much different than the same stupid canard I dealt with in the subscriber section back in January. Here’s what I wrote back then. Substitute $15 billion with $22.7 billion and adjust everything else and you’ll get the same sort of results…

ONE OF THE DUMBEST ARGUMENTS EVER There’s been much screaming and hollering about how new calculations show that the pension reform law is projected to save $15 billion less than originally advertised last fall when the bill passed.

The complaints are based mainly on a recent Chicago Tribune article entitled “Illinois pension law saves $15 billion less than first thought.” The ultra-conservative Illinois Policy Institute, Bruce Rauner and other pension bill opponents have used the story as ammunition to claim that the law is based on a tissue of lies.

But the premise of that article was completely off base because it looked at the wrong number. The only truly valuable number is what taxpayers will end up shoveling into the pension system. Like everything else, it’s all about the final bottom line.

OK, we’re gonna get into a little math here, but it’s really easy so stay with me a minute.

The basic thing to remember here is that calculations originally showed last fall that pension reforms meant taxpayers would owe the pension systems $220 billion over 30 years. A recalculation with updated numbers, however, showed the total taxpayer obligation is now at $205 billion. That’s really good news, but it’s being irresponsibly spun as bad news.

The original estimates were based on Fiscal Year 2012 data. Without the new pension law, the data showed that taxpayers were on the hook for $380 billion in pension payments over 30 years. The reform law reduced that obligation estimate to $220 billion, which was a 42.1 percent reduction in what the government would have to give the pension funds.

When the numbers were updated to include Fiscal Year 2013 data (which included some pretty high investment returns), the new research found that taxpayers were now on the hook for $350 billion over the next 30 years without the reforms. The reform law would result in a 41.4 percent reduction to just $205 billion.

So, what about that $15 billion difference touted by the opponents? Where does it come from?

It’s not that hard to figure out and here’s an easy little example if you’re still scratching your head.

Let’s say you’re looking for a new watch. You find one at Macy’s that’s originally priced at $109 and is on sale at 40 percent off. You’d save $43.60 for a final price of $65.40. That’s still more expensive than Rauner’s watch, but not a bad deal at all.

But then you go next door to Bergner’s and you see the exact same watch listed at $100 and it’s also on sale for 40 percent off. You’d save $40 with the 40 percent sale, but your final bottom line price would be $60, compared to $65.40 at Macy’s,

It doesn’t take Einstein to figure out the better bottom line deal here. Yeah, your 40 percent “savings” are higher with the more expensive Macy’s watch, but the bottom line price you pay is significantly lower at Bergner’s.

The Policy Institute and Rauner would have you believe that Bergner’s is somehow ripping you off because the sale’s 40 percent reduction amount is lower than Macy’s. But that’s just plainly ridiculous. Who thinks like that?

Discuss.

- Posted by Rich Miller        

24 Comments
  1. - PublicServant - Thursday, Mar 27, 14 @ 9:16 am:

    ===67% personal income tax===

    LOL. What’s a word here, or a word there in the grand scheme of things?…


  2. - I B Strapped - Thursday, Mar 27, 14 @ 9:22 am:

    It’s all Mox Nix anyway when the ISC Jams Madigans scheme and Rauner goes to Plan B next year.


  3. - wordslinger - Thursday, Mar 27, 14 @ 9:28 am:

    The Tribbies should stay away from “numbers” stories. Like Barbie said, “math is hard.”


  4. - Bill White - Thursday, Mar 27, 14 @ 9:32 am:

    === The Policy Institute and Rauner would have you believe that Bergner’s is somehow ripping you off because the sale’s 40 percent reduction amount is lower than Macy’s. But that’s just plainly ridiculous. ===

    In terms of intellectual honesty, this belongs in the same category as counting people who move out of state (and therefore do not receive IL funded Medicaid) as example of Medicaid fraud because the old names and addresses were never purged from the database.


  5. - Grandson of Man - Thursday, Mar 27, 14 @ 9:35 am:

    The key is the strong investment returns in 2013 that lowered the overall taxpayer liability. The entire pension debt model shifted downward in cost, which is good.

    What the IPI and their allies are doing is using reverse psychology. A 67% income tax increase sounds horrible, even though the tax was raised from 3-5%, which still makes us competitive with most tax states. It seems to be the same thing with the $22.6 billion.


  6. - langhorne - Thursday, Mar 27, 14 @ 9:36 am:

    once a campaign gets a headline and/or story they like, it lives on forever. no matter how discredited. even if it is from the bone gap gazette.


  7. - Political Neophyte - Thursday, Mar 27, 14 @ 9:57 am:

    Who thinks like that? The Policy Institute thinks like that.


  8. - train111 - Thursday, Mar 27, 14 @ 10:10 am:

    Who thinks this way? Campaign consultants writing 30 second adds for TV.

    Which is easier to sell a campaign on–Anti-tax, anti-spend, anti-everything hysteria or cold boring facts?
    Most overpaid consultants are going to run away with the first rather than trying to explain the second.


  9. - dupage dan - Thursday, Mar 27, 14 @ 10:13 am:

    Nice explanation - helps those of us (me) who don’t have the inclination to work that out.

    However, why does it matter? Does anyone really think the state gov’t is gonna keep to that schedule? We were all ramped up with Edgars program, how long did that last? The gov’t is gonna wait till this settles down a bit - hopefully, in a few years, folks memories will be a little fuzzy, and the politicians can go back to their previous behavior.


  10. - Palm Tree - Thursday, Mar 27, 14 @ 10:21 am:

    Who thinks this way?
    People who are trying to craft an argument to justify their No vote on the most comprehensive pension reform package in Illinois history. A package that credit rating agencies have praised. A package that if found constitutional reduces total taxpayer costs on pensions by almost half.

    People who initially supported the bill but were told by their financial benefactor to vote No.

    Now they are looking for cover for that No vote. People like Representative McSweeney.


  11. - Yellow Dog Democrat - Thursday, Mar 27, 14 @ 10:54 am:

    More embarrassing reporting from the Tribune…Abdon has a lot of work to do.


  12. - Timmeh - Thursday, Mar 27, 14 @ 10:58 am:

    For someone whose company ran the pension funds, it seems like Rauner doesn’t understand the numbers. Or is willingly distorting them. Either way, that’s not what you want from an “outsider businessman” running for governor.


  13. - MrJM - Thursday, Mar 27, 14 @ 11:09 am:

    Who thinks like that?

    Oh, this has nothing to do with “thinking”…

    – MrJM


  14. - 47th Ward - Thursday, Mar 27, 14 @ 12:55 pm:

    Overheard in the Tribune Tower:

    The numbers all go to eleven. Look, right across the board, eleven, eleven, eleven and…

    Oh, I see. And most amps go up to ten?

    Exactly.

    Does that mean it’s louder? Is it any louder?

    Well, it’s one louder, isn’t it? It’s not ten. You see, most blokes, you know, will be playing at ten. You’re on ten here, all the way up, all the way up, all the way up, you’re on ten on your guitar. Where can you go from there? Where?

    I don’t know.

    Nowhere. Exactly. What we do is, if we need that extra push over the cliff, you know what we do?

    Put it up to eleven?

    Eleven. Exactly. One louder.

    Why don’t you just make ten louder and make ten be the top number and make that a little louder?

    These go to eleven.


  15. - sue - Thursday, Mar 27, 14 @ 1:02 pm:

    Many(including myself) would have no problem leaving the personal tax rate at 5 percent if it had solved the State’s fiscal issues-BUT IT DOESN’T seem to have worked-employment remains stagnant, credit ratings have been slashed; bills remain unpaid and pensions are still grossly underfunded- The problem doesn’t seem to be revenues but spending- Quinn had the benefit of increased tax revenues for 4 years and rather then reduce the State’s deficit- he found a number of programs to expand- Assuming the rate remains at 5- it would be nice to see the legislature bring the spending down to the level where revenues equal outlays


  16. - Rich Miller - Thursday, Mar 27, 14 @ 1:03 pm:

    ===Quinn had the benefit of increased tax revenues for 4 years and rather then reduce the State’s deficit- he found a number of programs to expand===

    Which were?


  17. - titan - Thursday, Mar 27, 14 @ 1:22 pm:

    Who thinks like that?

    A very large portion of the general population are functionally innumerate. They can be made to think like that.


  18. - Demoralized - Thursday, Mar 27, 14 @ 1:44 pm:

    @sue:

    Look forward to your list of cuts that would need to happen if the tax increase expired. The revenue didn’t go to a bunch of new spending. It went to basically maintain and hopefully help keep the ship from completely sinking. Discretionary spending has been cut and cut and cut. They’ve passed legislation to deal with the pension (whether it’s constitutional or not is another question), which is a huge cost driver. I’d be interested to see what additional brilliant ideas you would have to make up for the shortfall if the tax is allowed to expire.


  19. - DuPage - Thursday, Mar 27, 14 @ 1:45 pm:

    If it saves so little then it won’t be missed when the ILSC throws it out!


  20. - jerry 101 - Thursday, Mar 27, 14 @ 1:56 pm:

    Holy stinkbombs Batman! I’m paying a 67% income tax rate in Illinois?!?! Dad gum it!!

    Bruce Rauner. Businessman. Bad at math.


  21. - wordslinger - Thursday, Mar 27, 14 @ 2:19 pm:

    –Bruce Rauner. Businessman. Bad at math–

    Give him a break. He’s just conflicted.

    “…and, frankly, sometimes I disagree with myself.”

    Best. Quote. Ever.

    http://chicago.cbslocal.com/2014/03/21/rauner-enlists-bipartisan-support-in-seeking-new-solutions-for-illinois/


  22. - Driveby - Thursday, Mar 27, 14 @ 3:39 pm:

    I always though that the unfunded liability was the thing to look at. I’ll have to read here more often for a more enlightened viewpoint like this.


  23. - Donkey Dem - Thursday, Mar 27, 14 @ 3:54 pm:

    Cut the Nursing Home’s Mental Health, and the Poor. That’s the why to balance the budget. And Oh, give the unions whatever they want.


  24. - RNUG - Thursday, Mar 27, 14 @ 6:27 pm:

    - wordslinger - Thursday, Mar 27, 14 @ 2:19 pm:

    I pointed that quote out to my wife when I read it in the paper the other day. Probably the most honest thing the man has said …


Sorry, comments for this post are now closed.


* Suburbs raking in red-light cam bucks
* Gov. Word Salad
* It's just a bill
* Question of the day
* Our sorry state
* Unsolicited advice
* "What we are being asked to do is cut off vital organs"
* GOP gearing up for 2018
* *** UPDATED x1 *** Kennedy can't or won't explain misleading property tax claim
* 69 percent say Illinois on wrong track, 69 percent say budget is most important issue
* New Poll Shows 76% of Illinois Voters Oppose Increased Data Collection Legislation
* Another hostage warns of imminent demise
* HDems say they want to work in "good faith" with Rauner
* Senate Dems try to go it alone with their own budget plan
* Broken promises, broken state cause bond downgrade in Quincy
* *** LIVE *** Session coverage
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............
<


Loading


* The Latest: House Democrats propose college gra.....
* The Illinois Budget Disaster, Explained - Chica.....
* The Latest: Senate Dems float less-severe budge.....
* The Latest: Senate Dems float less-severe budge.....
* Unsolicited advice - The Capitol Fax Blog (blog)..
* The Latest: Senate Dems float less-severe budge.....
* The Latest: Senate Dems float less-severe budge.....


* The Latest: Senate Dems trim list of services to be taxed
* Gov. Raimondo travels to Chicago for fundraiser
* Judge lets lawsuit by Muslim mistaken for terrorist proceed
* Chicago-area teen expelled in grade scheme returns to class
* Illinois to receive $1.2M of Target data breach settlement
* Illinois to receive $1.2M of Target data breach settlement
* Excerpts from recent editorials in newspapers in Illinois
* Expiring law could leave Route 66 towns without key funding
* Chicago area school to send new diplomas after finding error
* Springfield developer, lobbyist pitch downtown casino

* House Democrats propose college grant program
* Illinois Senate plans to vote on budget today
* Museums team up for reflection on former Gov. James Thompson
* Workers' comp changes could face Illinois Senate vote
* Sangamon among counties in jury diversity pilot project
* Developer Chris Stone pushing for casino in downtown Springfield
* Developer Stone pushing for casino in downtown Springfield
* Push to rename road after late Macon County sheriff
* Tricky, unpopular budget at crux of Senate 'grand bargain'
* Blagojevich attorneys ask for another appeals court hearing

* Sears gets breathing room with loan, pension deals
* Ex-McDonald's CEO Thompson buys control of a pizza chain
* Public finance campaign bill picks up momentum
* Booth alum donates $20 million to school's Social Enterprise Initiative
* Delay on Obamacare subsidy decision leaves insurers in limbo


* Always bet on the taxpayer to gamble
* CPS looks to require high-schoolers to take chemistry, physics
* Hall of Famer Cortez Kennedy has died at age 48
* Trump visit with the pope raises a question: Thin Mints or thin faith?
* Sears gets more time to pay creditors
* Man shot to death in Gary
* Man charged with Vernon Hills home invasion, battery
* NFL owners approve rule changes to overtime, roster cuts
* NFL to allow some flair in celebrations
* NYC hotels with great views: 15 choices from luxe to budget


* All aboard: Joliet Rocket steamin' into town
* Cubs to pay $1 million for security cameras for Wrigley Field
* 'Baywatch' review: This beach is littered with raunch
* Des Plaines teen accidentally shot by 11-year-old sibling has died, officials say
* Black caucus: White Mississippi rep should resign over lynching comment
* Manchester police name bomber who killed 22, hunt for accomplices
* LINDA C. BLACK HOROSCOPES for 5/23/17
* Bears' OTA practice at Halas Hall
* Trump's $4 trillion budget: More for the military, less for the poor
* Audra McDonald spends an up-close-and-personal evening at Steppenwolf


» Springfield Developer, Lobbyist Pitch Downtown Casino
» Cook County Board President To Seek Third Term Next Year
» 2 More Leaks Found Along Dakota Access Pipeline
» Springfield Casino? A Businessman Likes The Odds
» Bevy Of Bobcats: Thriving Animals Poised As Next Urban Pest
» New York Parade Organizers Support Honoring Puerto Rican Nationalist
» Durbin: Too Early For Talk Of Impeachment
» Finding Closure: Cook County Families Get a Chance to Find Missing Loved Ones
» Mayor: More HIV Positive Chicaogoans Than Ever Receive Treatment
» Illinois’ Medicaid Problems Could Jeopardize Money For Schools, State Workers, Attorneys say


* House Democrats propose college grant program
* Illinois Senate plans to vote on budget today
* Museums team up for reflection on former Gov. James Thompson
* Workers' comp changes could face Illinois Senate vote
* Sangamon among counties in jury diversity pilot project
* Developer Chris Stone pushing for casino in downtown Springfield
* Sounding the Alarm: Entrenched politics require real reforms in Illinois
* Marc Thiessen: Leakers who revealed Israel as intelligence source did far more damage than Trump
* Developer Stone pushing for casino in downtown Springfield
* Push to rename road after late Macon County sheriff


* More than 50,000 expected to visit Southern Illinois for solar eclipse
* SIUE graduate student achieves national summer fellowship
* Trial date set for man charged with murder of Chester police officer
* I-74 closed after police incident
* Candidate sought for open seat on Madison County Board
* Four Alton restaurants participating in June, ‘Dine Out for Pride Inc.’
* 7th Avenue lane closure in Moline
* Street closures listing
* 05-23-17 Penny for Your Thoughts
* OTHS sprinters race to two state titles


* Arrest made in Vernon Hills home invasion
* Antioch man killed in crash with school bus in Wisconsin
* Sears gets breathing room in deals with MetLife, Cascade
* Manchester police name bomber, hunt for accomplices
* Police: Husband, wife dead in Woodridge apartment shooting

* Protesters continue die-in at US Rep. Rand...
* US Rep. Randy Hultgren's office the scene ...
* Second Democrat announces bid to unseat Hu...
* Local Republicans, Democrats praise appoin...
* Batavia resident, teacher hopes to challen...
* Batavia resident announces candidacy for 1...
* House GOP takes first steps to undo financ...
* Teacher raised in Yorkville running agains...
* Jim Walz Will Challenge Randy Hultgren for...
* PHOTOS: Protesters stage die-in at Randy H...

* Durbin compares Trump to former governor R......

* Duckworth votes against Branstad as ambass......
* Democrat Senator Asks NSA for Security Det......

* Illinois Democrats Cullerton, Harmon, Hunter, Koehler, Landek, Link, Martinez, McGuire, Morrison, Muñoz, Raoul, Sandoval, Silverstein, Steans and Trotter voted today for pension theft.
* In Chicago, fighting for fair housing has a history.
* June 8 fundraiser set for judge Joanne Roasado
* At long last the African music from Ali and Foreman’s ‘Rumble in the Jungle’ sees release
* 20 for 20: Illinois REALTORS® hit every member of state’s congressional delegation
* Look for Illinois REALTORS® April housing report Wednesday
* Campaign website launched, June 28 fundraiser set for Scott McKenna
* Durbin compares Trump to former governor Rod Blagojevich, and other Chicago news
* Campaign website, June 6 fundraiser set for Judge Myron Mackoff
* McMaster.


* Illinois Awarded Funds to Offer Advanced Training on Detecting Impaired Driving
* Illinois EPA Announces Upcoming Household Hazardous Waste Collection Events
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May - Ready Illinois website offers preparedness tips for people, caregivers
* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* Can’t get an Honor 6X? Honor 6A gets you the bare essentials
* Russia added to list of countries where Android Pay is available
* Warby Parker’s Prescription Check app lets you skip the eye doctor
* Xfinity Mobile offering unlimited data for $45 per month to Comcast customers
* Embrace.io raises $2.5M to track mobile app performance
* Microsoft bills ‘new’ Surface Pro as ‘the most versatile laptop’, Intel Kaby Lake inside
* Baffling Moto G5S gets rendered in trio of paint jobs with all-metal construction

* Covey seeks first win vs. Corbin, D-backs
* White Sox can't solve Greinke in opening loss
* White Sox can't solve Greinke in opening loss
* Covey seeks first win vs. Corbin, D-backs
* Gonzalez sees positives despite 5th straight L
* Diamondbacks 5, White Sox 1: Too much Zack Greinke
* White Sox can't solve Greinke in opening loss


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller