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Still in pension reform denial

Thursday, May 14, 2015 - Posted by Rich Miller

* From the Tribune…

Gov. Bruce Rauner is sticking to his plan to reduce retirement benefits for government workers, even after a recent Illinois Supreme Court ruling severely limited options for cutting state pension costs, administration officials said Wednesday.

That position was relayed as the Republican governor dispatched a lawyer and policy adviser to a House committee to discuss the approach on pensions months after Rauner floated it. While no legislation has been filed, the new governor has talked broadly about moving all current workers to a less generous benefit package beginning in July. Upon retirement, those workers would collect two pensions — one from the more generous plan in place now, and a second from the less generous benefits accrued after July. […]

“We continue to believe that the governor’s proposal … is constitutional under the current constitution even after the Supreme Court’s ruling that came out Friday,” [Rauner administration attorney Kim Fowler] said.

The Rauner team’s view is that the court was unclear about whether future benefits have the same protections as those benefits already earned. “We don’t think the court clearly answered what benefits are protected,” Fowler said.

C’mon. The Supremes were abundantly clear. Do we have to go over this yet again?…

Under article XIII, section 5, members of pension plans subject to its provisions have a legally enforceable right to receive the benefits they have been promised… The protections afforded to such benefits by article XIII, section 5 attach once an individual first embarks upon employment in a position covered by a public retirement system, not when the employee ultimately retires… Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the benefits conferred by membership in the retirement system cannot be applied to that individual.

* Democrats on the committee were skeptical, to say the least…

Some Democrats on the committee said they disagreed. Rep. Scott Drury, D-Highwood, said that once an employee joins a pension system, they are locked into its benefits.

“We can increase the benefits, but once we do that, we can’t take it away,” Drury said. “The court poked a lot of holes in what we did. I think (Rauner’s plan) needs to be set aside because it’s just not realistic anymore. The holding is not nearly as ambiguous as you are making it out to be.”

Rep. Mike Zalewski, D-Riverside, expressed a similar view.

“There’s no reading of that decision that squares with your testimony here today,” he said. “Benefits are benefits under this law, and there’s nothing we can do to alter them. This false distinction between benefits earned and future benefits earned is not realistic.”

Republicans said they think the governor’s plan will work. Rep. Tom Morrison, R-Palatine, said he has had teachers in his district tell him they can accept Rauner’s plan because they know that pension costs are cutting into other state services, including education.

* More…

Rep. Carol Sente, D-Vernon Hills, said she liked Rauner’s proposal to amend the constitution to change the wording of the pension clause — although that couldn’t be voted on until November 2016 at the earliest — but that “I feel the ruling was very clear and I do feel that the items in this proposal are not constitutional and would fall to the same ends.”

“I do feel that a decision has been made and we’re going down the same path in a slightly different way,” she said.

* And…

“I think its absolutely fantastic,” state Rep. Jeanne Ives, R-Wheaton, said of the proposal.

The partisan split suggested attempts to rein in state pension problems will remain a major headache as lawmakers work toward a scheduled May 31 adjournment date.

“I feel like its groundhog day,” said state Rep. Elaine Nekritz, D-Northbrook.

* But…

The committee seemed less chilly to the governor’s desire for a constitutional amendment ballot question in time for the 2016 general election.

Fowler said the proposed amendment language would make clear that benefits already accrued under the law in effect during a period of service must be protected. With that said, the amendment also would make clear the General Assembly and governor have the right to alter pension statutes through new legislation, she said.

A three-fifths vote of each chamber of the Legislature could place a constitutional amendment question on the 2016 general election ballot. To be enacted it would also need approval by three-fifths of voting on the question or a majority of those voting in the election.

* Meanwhile, the News-Gazette editorialized about pension reform today, and added this little nugget…

[Senate President John] Cullerton’s planned legislation is not the only solution he’s put forward. Months ago, he suggested another approach.

It’s unclear if he was serious. But if he wasn’t then, he and others may be now because it could be the only way to hold the semblance of a line on pension costs.

Cullerton suggested the state refuse to agree to any future pay increases for state employees. If the state can’t take control of pension costs on the benefits end, perhaps it can through salary freezes.

Such a freeze would have to last several years to have a significant impact.

       

185 Comments

  1. - Bluefish - Thursday, May 14, 15 @ 9:55 am:

    Rep. Ives needs to learn to channel her inner Lincoln: “Better to remain silent and be thought a fool than speak and remove all doubt”


  2. - John A Logan - Thursday, May 14, 15 @ 9:55 am:

    The Governor has every right to push for a Constitutional amendment, and I think it would stand a good chance of being adopted. However the propaganda being pushed “We continue to believe that the governor’s proposal … is constitutional under the current constitution even after the Supreme Court’s ruling that came out Friday” leaves me greatly disappointed in my own party, and in this Governor. Just be honest about what you want to do, and why. That is all anyone could ask for. Just. Be. Honest. Rauner seems to think that he has to play this game to be successful. It’s pathetic.


  3. - Flavurful - Thursday, May 14, 15 @ 9:56 am:

    CEO “governance”: Provoke, Demand, Litigate. Rinse, Repeat…


  4. - Sangamo Sam - Thursday, May 14, 15 @ 9:56 am:

    It’s time to face this issue straight on. No more magical thinking, no more attempts to reinterpret the ILSC’s decision. They were as clear as they could possibly be. Now please, please get serious about resolving this.


  5. - Walter Mitty - Thursday, May 14, 15 @ 9:59 am:

    I have no doubt that a constitutional amendment will be passed in the legislature and then the voters. Which is a sad reality of our State’s mis management for MANY year’s… It is much easier to blame the victims that have given almost 10% of every check… With the promise the state would fill their obligations…Instead, create a climate and crisis that blames the victims… Stay classy Legislature current and previous…


  6. - mythoughtis - Thursday, May 14, 15 @ 9:59 am:

    Given the description above, what would be the point of the constitutional amendment? If we all currently agree that we can’t, and won’t change benefits during a employees period of service, and that we can change benefits on people we hire after the effective date of any such change, why would we need an CA? The only benefits I can see if that we could try to change benefits on people with breaks in service. Oh, wait… that would go along with the ‘fire and re-hire’ proposal.


  7. - Anon - Thursday, May 14, 15 @ 9:59 am:

    ===Republicans said they think the governor’s plan will work. Rep. Tom Morrison, R-Palatine, said he has had teachers in his district tell him they can accept Rauner’s plan because they know that pension costs are cutting into other state services, including education.===

    One teacher speaks for all? Rep. Morrison is clearly misguided.


  8. - CharlieKratos - Thursday, May 14, 15 @ 10:01 am:

    “Several year” pay freeze. That should get us some quality state workers.

    When did it become acceptable, and even commonplace, to treat the people that work for the citizens of the state as worthy only of disdain. When did state workers become second class citizens?


  9. - Six Degrees of Separation - Thursday, May 14, 15 @ 10:04 am:

    I actually think Rauner’s plan, WITH a constitutional amendment, might (and it is chancy, with the court having to weigh the will of the people vs. contract law precedent) survive the ISC. However, we have yet to see any details on what the pension savings will be. Without that, we will not know how “fantastic” it really is…I assume the actuaries that do this stuff are making their calculations. Hard to see it passing this session.


  10. - Anon - Thursday, May 14, 15 @ 10:04 am:

    I wonder if the legislature is aware that the labor market is a thing. The State does need to replace retired workers with a new generation of civil servants. Lowering pay and salary freezes is the kind of thing that makes certain that Illinois is going to have a government administrated by folks who don’t have better options.

    I get that people enjoy complaining about government, but I don’t think any of the actual problems are going to get better by the state’s work force being reduced to people who really need a job.


  11. - illlinifan - Thursday, May 14, 15 @ 10:04 am:

    Hey the middle managers have done their fair share for the past 10 years on having no pay raises. I have no problem with the union staff not getting raises since many of them now earn a lot more than the middle managers. There needs to be a complete analysis of staff salaries and get them aligned. Some people may see increases and some decreases. I am confident this is all part of the contract discussions underway now.


  12. - Ducky LaMoore - Thursday, May 14, 15 @ 10:04 am:

    @CharlieKratos

    November 4th, 2014


  13. - In the Middle - Thursday, May 14, 15 @ 10:05 am:

    Zalewski nailed it…

    “This false distinction between benefits earned and future benefits earned is not realistic.”


  14. - JS Mill - Thursday, May 14, 15 @ 10:06 am:

    =Rep. Tom Morrison, R-Palatine, said he has had teachers in his district tell him they can accept Rauner’s plan because they know that pension costs are cutting into other state services, including education.=

    I do not believe one word of Morrison’s statement.

    And again- it is the DEBT, not the annual cost, that is the issue. Adjusting COLA would also reduce the annual cost, but they made that a part of the benefit so they they are out of luck there too.

    Cost shift is one way the state could drop an expense, but it would then be added locally.

    BTW- Mr. Cullerton was one of the yes votes on some of the “special” sweetheart deals. I love how he acts like it was some other guy that created this mess.


  15. - Six Degrees of Separation - Thursday, May 14, 15 @ 10:06 am:

    The correct sequence would be…enact the amendment, then enact the law.


  16. - Johnny Pyle Driver - Thursday, May 14, 15 @ 10:08 am:

    ===Hey the middle managers have done their fair share for the past 10 years on having no pay raises. I have no problem with the union staff not getting raises since many of them now earn a lot more than the middle managers.===

    And we’ll all hold hands as we skip our way to poverty. “If I can’t get a raise, he shouldn’t either!” Rauner and his billionaire buddies appreciate your sacrifice


  17. - bloval27 - Thursday, May 14, 15 @ 10:09 am:

    Once the populace lost faith in state government is when state workers joined the front lines of hatred, they are associated with the government so in people’s minds it’s all their faults as well unfortunately.


  18. - walker - Thursday, May 14, 15 @ 10:10 am:

    When did most government workers become second class citizens? When Ayn Rand won the hearts of key Republican leaders, and they acquired a great actor/spokesman in the White House. It’s been a strong and growing popular meme since then.

    Probably always around, but a national movement now.


  19. - A. Staller - Thursday, May 14, 15 @ 10:12 am:

    I wonder whether the game plan is to delay a “solution” so that the pension hole is so deep that it can’t plausibly be filled with new revenue and benefits are slashed via bankruptcy or some other type of insolvency.


  20. - Secret Square - Thursday, May 14, 15 @ 10:12 am:

    “That should get us some quality state workers.”

    If the funding crisis is as bad as it seems, I doubt any agencies will be hiring new people anyway. A several-years-long pay freeze is something merit comp employees have endured before (one reason why so many joined unions during the Blago era). It would hurt and cause hardship, don’t get me wrong, but since I’m past 50 and not likely to find anything better elsewhere, I’d put up with a several year pay freeze if (and it is a big “if”) it helped make my future pension a bit more secure.


  21. - SAP - Thursday, May 14, 15 @ 10:12 am:

    Can’t read the Legislature on right to work. Can’t read the Supreme Court opinion. Starting to see a pattern here.


  22. - a drop in - Thursday, May 14, 15 @ 10:15 am:

    A common practice in private industry is to keep base salary down by giving no or small raises and issuing a cash bonus instead. Would this have an effect on pensions if done for state workers? Note, I am not suggesting this for a solution; just curious if possible.


  23. - Joe M - Thursday, May 14, 15 @ 10:16 am:

    Rauner is ignoring the contract protection clauses of both the Illinois and U.S. Constitutions that say post de facto laws can’t be passed that impair the obligation of contract. The Illinois Supreme Court even used a case about the U.S. Constitution’s contract protection clause in their decision last Friday. Is Rauner also going to try to amend the contract protection clauses of both the Illinois and U.S. Constitutions?


  24. - Person 8 - Thursday, May 14, 15 @ 10:16 am:

    Even if the main concept of “future” benefits and “current” benefits there are tons of benefits that relay upon one another that would cross over the tiers.. Years of Service is one of them. If you are going to freeze someone with 10 YOS then would those 10 years count for tier 2? Or would someone need to work another 35 years after that to be fully vested in tier two. Which retirement age would you get to have? Someone who is a few years away from fully vested tier 1 may not be for tier 2.

    A bill like this would have needed to have been introduced months ago, to have any chance to be debated and dissected (not that I think it would have any chance to pass anyway).


  25. - Wordslinger - Thursday, May 14, 15 @ 10:19 am:

    Might be time to reconsider the intellectual firepower of an idea when Ives is its most enthusiastic proponent and Drury can lecture to you like you were a child as to it’s futility.


  26. - efudd - Thursday, May 14, 15 @ 10:19 am:

    Charlie Kratos-while I agree with you that salary freezes will only bring the “best” to state employment, cue the “I haven’t had a raise in X years” crowd, it does go along with the message that state employees don’t do anything worth doing. Which is why I believe in 10-15 years this state will experience a shortage of qualified teachers. Those who would make good teachers are not going to enter a profession in this state where they are constantly vilified when they have other options.


  27. - walker - Thursday, May 14, 15 @ 10:21 am:

    Ives needs to expand her reading list.


  28. - Parnell - Thursday, May 14, 15 @ 10:22 am:

    First it was the Madigan plan on pensions. He was adamant that this was the way to go. It was unconstitutional. This has allowed the Cullerton plan to have it’s day before the Courts. Another flawed bill due to the refusal to understand what consideration means. Now the Republicans think they have the answer with a new tier of employees stretching out their benefits and freezing their current pension. Another misunderstanding based on a deliberate misreading of the Court’s ruling by the proponents of the Rauner Plan. The path forward is now even more unclear because of these three bills.


  29. - Wordslinger - Thursday, May 14, 15 @ 10:22 am:

    Whatever shenanigans go on, the key is to not let Rauner bank any “savings” from his “plans.”


  30. - efudd - Thursday, May 14, 15 @ 10:22 am:

    As far as Rauner’s future attempt at pension reform, this is simply a manifestation of an incredibly wealthy person who cannot imagine a universe where he is wrong.


  31. - Demoralized - Thursday, May 14, 15 @ 10:24 am:

    Their talking points aren’t any different than what they’ve been saying forever. They always said they thought the plan that the Supreme Court struck down was unconstitutional and they’ve always said that their plan was. It doesn’t surprise me that they continue to believe that (or at least pretend to believe it).


  32. - AnonymousOne - Thursday, May 14, 15 @ 10:24 am:

    The citizens of Illinois will get the kind of public employee they are willing to pay for. Is that not what business says? I can’t imagine they’re lining up to work for public work now and if future employees are capable of hearing, seeing and paying attention, they will steer clear of this cesspool. Who needs this abuse?


  33. - Demoralized - Thursday, May 14, 15 @ 10:25 am:

    ==tell him they can accept Rauner’s plan==

    Who cares what they will accept. Pension benefits are an individual guarantee.


  34. - Arthur Andersen - Thursday, May 14, 15 @ 10:25 am:

    In addition to killing State employee morale and taking years to move the needle, the pay freeze idea solves but a fraction of the overall problem. Teachers and University employees are more than five times the covered headcount of State employees and I find it highly unlikely that Uni Boards of Trustees, let alone hundreds of school boards, will go and freeze pay (break contracts) to fix a problem not of their making.


  35. - Flavurful - Thursday, May 14, 15 @ 10:26 am:

    I know Gov. Rauner has begun to be compared to Blago, but I still think he’s more like Pat Quinn. Q’s “I will not pay the legislators” gimmick is just like Rauner on pension reform. We all know it’s pointless, yet he foolishly persists.

    Will he ever champion a “good public policy” idea with broad-based support that moves us forward? I know, that’s not Shaking Up Springfield.


  36. - Tommydanger - Thursday, May 14, 15 @ 10:31 am:

    Good luck in negotiating 0% pay increases for bargaining unit employees. Employers arguing ability to pay before an arbitrator have rarely, if ever, been successful.


  37. - Soccertease - Thursday, May 14, 15 @ 10:33 am:

    Got to believe Gov Rauner understands his proposal has no chance. He’s posturing for future negotiations. Hard to negotiate with unconstitutional language though.


  38. - Anonymous - Thursday, May 14, 15 @ 10:34 am:

    Rich,
    Maybe it’s premature, but can we have a QOD on which governor Rauner most resembles? I’d nominate Blago, Quinn, and Walker (and I’d vote for Walker).


  39. - Langhorne - Thursday, May 14, 15 @ 10:35 am:

    Rauner pension CA: the pension clause is null and void, in fact it never existed. Pensions are whatever we say they are at any time we like, regardless of the supreme court. So there.


  40. - Downstate Illinois - Thursday, May 14, 15 @ 10:37 am:

    There are ways around the Supreme Court ruling.

    First, we could fire everyone and hire them back as new employees under the new system. Two, fire everyone and hire a whole new slate of employees under the new system. Three, privatize everything and shift public sector employees into the private sector.

    If anybody doubts these can’t happen, try to figure out where we will be in a few years if we don’t.

    Rich has pointed out some possible mini solutions lawmakers could do to minimize the impact to the budget over the next few years, such as readjusting the ramp up in payments, but that still leaves us with the problem of ridiculously generous pensions that pay retirees far more then they ever paid into the systems. I say that even as someone who has credits in the existing (old) system.


  41. - Anonymous - Thursday, May 14, 15 @ 10:37 am:

    I just heard that Revenue is going to require workers to wear suits and ties.

    They are trying to chase people away.

    I better get back, I have 3 minutes left on my break and don’t want to get written up.


  42. - forwhatitsworth - Thursday, May 14, 15 @ 10:38 am:

    === Some Democrats on the committee said they disagreed. Rep. Scott Drury, D-Highwood, said that once an employee joins a pension system, they are locked into its benefits.

    “We can increase the benefits, but once we do that, we can’t take it away,” Drury said. “The court poked a lot of holes in what we did. I think (Rauner’s plan) needs to be set aside because it’s just not realistic anymore. The holding is not nearly as ambiguous as you are making it out to be.”

    Rep. Mike Zalewski, D-Riverside, expressed a similar view.

    “There’s no reading of that decision that squares with your testimony here today,” he said. “Benefits are benefits under this law, and there’s nothing we can do to alter them. This false distinction between benefits earned and future benefits earned is not realistic.” ===

    I’m glad there are some adults that can read and comprehend.


  43. - northshore cynic - Thursday, May 14, 15 @ 10:39 am:

    Maybe Ms. Fowler has not had time to read the Supreme Court opinion.

    Why just freeze salaries? Reduce them.


  44. - thunderspirit - Thursday, May 14, 15 @ 10:39 am:

    === Can’t read the Legislature on right to work. Can’t read the Supreme Court opinion. Starting to see a pattern here. ===

    There’s a difference between “can’t” and “won’t”, though. I believe *that’s* the pattern.


  45. - Obamas Puppy - Thursday, May 14, 15 @ 10:39 am:

    Rep. Ives just “fantastic” not marvelous, ingenious, stupendous, or supercalifragilistic expealidocious?


  46. - Norseman - Thursday, May 14, 15 @ 10:40 am:

    Except for the delusional Rauner plan, I’ve not seen any reference to a proposal that will help with FY 16. Every (banned word) proposal would result in years of delay due to time requirements - vote on CA - and litigation.

    All this because they want to bleed current employees and possibly retirees. So sad and maddeningly frustrating.


  47. - Flavurful - Thursday, May 14, 15 @ 10:43 am:

    Downstate: Do your homework. Google “RNUG” and “pensions” on site:capitolfax.com and then rejoin the conversation. Your ideas are not new; it has been thoroughly demonstrated they won’t work.


  48. - illlinifan - Thursday, May 14, 15 @ 10:43 am:

    There were a couple of contracts for SERS employees where raises were not offered for the first couple of years of the contract. That was when the state also agreed to pay the employee and employer share of the pension so those employees saw an artificial raise in their pay.


  49. - Sage - Thursday, May 14, 15 @ 10:44 am:

    The ILSC’s opinion is in fact unclear as to whether a “benefit” is a right that has already accrued or any right that may accrue under a pension system. The language about protections “attaching” at the start of employment is a red herring for lay readers.

    Now, to advance the discussion. The fact that the language is ambiguous is reflective of the small legal minds we have at the ILSC. A SCOTUS decision would have tackled the narrow question regarding whether diminishing past-accrued benefits is constitutional and would have *specifically* left the question of future-accrued benefits ambiguous. This ILSC decision is irresponsibly unambiguous about what it actually applies to.

    Notwithstanding the foregoing, it would be irresponsible for the Rauner administration to advance another statutory solution without contemporaneously advancing a constitutional amendment clarifying that the definition of “benefit” includes only accrued benefits. We cannot let our state’s fiscal health turn on guessing what the ILSC meant. Again, this all comes back to the ILSC’s poorly conceived and poorly drafted opinion.


  50. - Norseman - Thursday, May 14, 15 @ 10:45 am:

    AA, I agree with everything you said. What angers me is that most legislators don’t care.


  51. - Wordslinger - Thursday, May 14, 15 @ 10:46 am:

    DI, I think you forgot a couple of in your list of simple, legal and realistic solutions:

    – Move Illinois to the Congo River valley. They’ll never find us there.

    – Send out pension checks, but don’t sign them, then just refuse to answer the phone or door for the next 40 years.


  52. - Streator Curmudgeon - Thursday, May 14, 15 @ 10:47 am:

    I’ve never read anywhere whether the GA fully funded its own pension plan over the past several decades. True, it would be only a fraction of the amount for other public employee pensions, but we never hear much about whether underfunding pensions was a violation of the State Constitution.


  53. - Anon - Thursday, May 14, 15 @ 10:49 am:

    “Under article XIII, section 5, members of pension plans subject to its provisions have a legally enforceable right to receive the benefits they have been promised… ”

    Doesn’t the word ‘promised’ indicate future? As in there is no distinction between benefits already earned and those not yet earned?


  54. - Federalist - Thursday, May 14, 15 @ 10:49 am:

    Rauner looks sill on this. But he is so used to being a CEO and having everything and everybody do what he says that he is in total and perpetual denial. It is not his football and he can not just take it home because he wants the rules changed so he can always score a TD.


  55. - Apocalypse Now - Thursday, May 14, 15 @ 10:50 am:

    Pay freeze or even a pay reduction sounds like a good solution. Most teachers and government employees continued to receive pay increase during the last 5 or 6 years. Freeze pay and let the money saved from reduced salaries go to pay the pensions. Simple, but effective policy.


  56. - MrJM - Thursday, May 14, 15 @ 10:53 am:

    Gov. Bruce Rauner is sticking to his plan to reduce retirement benefits for government workers, even after a recent Illinois Supreme Court ruling severely limited options for cutting state pension costs, administration officials said Wednesday.

    Winston Churchill: “A fanatic is one who can’t change his mind and won’t change the subject.”

    – MrJM


  57. - Federalist - Thursday, May 14, 15 @ 10:53 am:

    SECTION 16. EX POST FACTO LAWS AND IMPAIRING CONTRACTS
    No ex post facto law, or law impairing the obligation of
    contracts or making an irrevocable grant of special
    privileges or immunities, shall be passed.
    (Source: Illinois Constitution.)

    Much has been made of a CA to change present language regarding pensions now that the ISC has ruled (yea, I know Rauner still does not get it).

    But would the above also have to be changed. I t certainly talks about a contract and often the word ‘contract’ can be interpreted very broadly.

    Even if interpreted as only a union contract, a number of state employees are not union members and have no contract to be changed.

    Thoughts anyone?


  58. - The Dude Abides - Thursday, May 14, 15 @ 10:54 am:

    Downstate Illinois Said- Thursday, May 14, 15 @ 10:37 am:

    There are ways around the Supreme Court ruling.

    Rich has pointed out some possible mini solutions lawmakers could do to minimize the impact to the budget over the next few years, such as readjusting the ramp up in payments, but that still leaves us with the problem of ridiculously generous pensions that pay retirees far more then they ever paid into the systems. I say that even as someone who has credits in the existing (old) system.

    Some still don’t understand the power of compound interest and return on investment. The way any decent retirement investment plan works is that you should end up with much more than you have invested.


  59. - RNUG - Thursday, May 14, 15 @ 10:54 am:

    I’m sitting here shaking my head in disbelief.

    This has to be the only explanation for what is going on (repeated from Cullerton post last night):

    http://www.newyorker.com/humor/borowitz-report/scientists-earth-endangered-by-new-strain-of-fact-resistant-humans


  60. - Sage - Thursday, May 14, 15 @ 10:54 am:

    Anon — The word “promised” does not necessarily indicate a future-accrued benefit. It could refer to promised payment of a past-accrued benefit. Essentially, it’s the definition of “benefit” that is ambiguous.


  61. - Federalist - Thursday, May 14, 15 @ 10:56 am:

    @Apocalypse,

    Perhaps this good be done with state employees (after union contracts expired).

    But K-12 teachers would be more problematic. All districts would have to get on board with such a proposal- does not seem likely to me.


  62. - jeffinginchicago - Thursday, May 14, 15 @ 10:57 am:

    The problem with no raises is it demoralizes an already unhappy workforce. But what else is there that is constitutional that reduces the liablity going forward?


  63. - Cassandra - Thursday, May 14, 15 @ 10:57 am:

    I wouldn’t be so sure that millenials and younger folks applying for state jobs in the future would notice the lack of a defined benefit retirement plan, especially if the defined comp match were decent. Sad perhaps, but true. Defined benefit plans are dinosaurs out in the world. All the applicants’ friends in the private sector will have defined comp.

    So, what about these dinosaurs in Illinois state government. Could Rauner be planning another can-kicking episode in our state soap opera. Put through his latest plan, let it wend its way to the Supreme Court, the more slowly the better, apply the “savings” to another Quinn-like fairytale budget, with support from both parties, of course..


  64. - Arsenal - Thursday, May 14, 15 @ 10:58 am:

    ==First, we could fire everyone and hire them back as new employees under the new system. Two, fire everyone and hire a whole new slate of employees under the new system.==

    If any Governor tries that, he might as well add himself to the ranks of the newly unemployed.


  65. - RNUG - Thursday, May 14, 15 @ 10:59 am:

    For “fantastic” substitute “fantasy” …


  66. - Flavurful - Thursday, May 14, 15 @ 10:59 am:

    Hey RNUG…are you out there? How does the recent opinion square with your prognostications? Seems to me you came pretty close with your #2 forecast, but ISC went possibly even further in decisively denying the existence of a fiscal emergency): https://capitolfax.com/2015/02/11/rnugs-latest-pension-thoughts/


  67. - archimedes - Thursday, May 14, 15 @ 11:01 am:

    All of the credit ratings downgrades are not inevitable. They are a direct result of the unwillingness to address the pension debt and the budget imbalance.

    Now that we finally have the ISC ruling, we continue to refuse reality. At the very least, the State should be paying what is needed under the current law. Increase revenue to fund it.

    Plus - the budget is $6 billion out of whack for Pete’s sake. The pension ruling was only $1.2 billion of that - SB1 would have reduced the pension cost by $1.2 billion. It’s not like a ruling upholding SB1 would have resolved our budget crisis - we’d still be almost $5 billion out of balance.


  68. - West Side the Best Side - Thursday, May 14, 15 @ 11:02 am:

    All those banned words of several days ago make it very hard to comment on Rauner, Ives and Co.’s statements after the ISC ruling. Can they really believe what they are saying? Even for politicians who you expect to spin everything, this is just incredible.


  69. - Six Degrees of Separation - Thursday, May 14, 15 @ 11:02 am:

    Apocalypse Now…if such an idea were to be considered, the unilateral freeze/reduction would need to be agreed to by a thousand individual employers, most of whom are not the “state”, to be effective. See AA 10:25 am post. I do think that it’s gonna be tough to justify a raise for most state employees in the near term.


  70. - RNUG - Thursday, May 14, 15 @ 11:05 am:

    == I’ve never read anywhere whether the GA fully funded its own pension plan over the past several decades. ==

    They didn’t. It’s the worst of all the systems. According to the FY14 reports, GARS is funded at only 14.3%


  71. - RNUG - Thursday, May 14, 15 @ 11:07 am:

    == we never hear much about whether underfunding pensions was a violation of the State Constitution. ==

    It wasn’t.

    See IFT v Linberg 1975

    See Eric Madiar Welching (on the IL D website among others)


  72. - Rich Miller - Thursday, May 14, 15 @ 11:07 am:

    ===First, we could fire everyone and hire them back as new employees under the new system. Two, fire everyone and hire a whole new slate of employees under the new system. ===

    And who’s gonna guard the prisoners in the meantime?

    Also, ever heard of civil service protections? Heard of union contracts? Heard of the Illinois Supreme Court’s rock-solid pension ruling?

    Also, the biggest state pension burden by far is not state employees, it’s teachers.

    I’m struggling to find a word that isn’t newly banned to describe your post, but I can’t, so I won’t.

    But it’s time for you to either leave or up your game here, dude.


  73. - D.P.Gumby - Thursday, May 14, 15 @ 11:08 am:

    These silly ideas and efforts to dodge the Supreme Court’s opinion are a waste of time. Address the real issue with tax increase to make up for the years when the State avoided taxes by living off what should have been contributed to the pension funds. You broke it, you bought it.


  74. - AnonymousOne - Thursday, May 14, 15 @ 11:11 am:

    The other night on Chicago Night, Ives was asked why legislators wouldn’t give up their pensions given that it is truly part time work and many come from lucrative professions, such as law. They are not people completely dependent on their legislative salaries. I don’t believe she ever addressed that question.


  75. - RNUG - Thursday, May 14, 15 @ 11:11 am:

    == Hey RNUG…are you out there? ==

    Yeah, slept in today. Just shaking my head over this.

    The decision landed somewhere between #1 and #2. They crept closer to #1 with their notes about the contract clause.


  76. - cover - Thursday, May 14, 15 @ 11:12 am:

    = I’ve never read anywhere whether the GA fully funded its own pension plan over the past several decades. =

    The General Assembly Retirement System, by far the smallest of the 5 state pension funds, is also by far the worst funded. As of 6/30/2014, it was only 16.0% funded, vs. 39.3% for the 5 systems overall. But in dollar terms, GARS comprises only $0.3 billion of the overall $111.2 billion underfunding.


  77. - Arthur Andersen - Thursday, May 14, 15 @ 11:13 am:

    Downstate, any defined benefit pension system is going to “pay retirees far more than they ever put in.” Good Lord, dude, it’s not a passbook savings account.

    A proper DB plan collects an actuarially sound amount from the employee with a dollar for dollar match by the employer. Those contributions, invested over time at the plan’s assumed rate of investment return, should provide an amount of money that if “annuitized” will fund the earned pension benefits.

    I wrote here not long ago of an actual career State employee for whose contributions, etc. I performed the above calculations. The numbers proved out just fine, including an AAI. The problem we have is the insufficient “State Match” for so many years and the foregone investment earnings on those amounts, not a lack of member participation in funding his/her pension.

    Gosh, I hope I didn’t type all that for a drive by comment.


  78. - Honeybear - Thursday, May 14, 15 @ 11:15 am:

    Downstate Illinois…lay off the Coolaid man


  79. - No Longer A Lurker - Thursday, May 14, 15 @ 11:16 am:

    @Rung

    Thanks for posting the link to the borowitz-report. Very timely. Unfortunately, sad and true.


  80. - Sage - Thursday, May 14, 15 @ 11:16 am:

    Rich, the ILSC opinion doesn’t define what a “benefit” — i.e., whether it is only an accrued right or privilege or whether it included potential future-accrued rights and privileges. It’s not rock solid. It’s irresponsibly ambiguous.


  81. - Poster - Thursday, May 14, 15 @ 11:17 am:

    Everyone says publicly that their plan is constitutional, right up to when the ISC says it isn’t.

    I don’t expect this will change.


  82. - JS Mill - Thursday, May 14, 15 @ 11:19 am:

    =Which is why I believe in 10-15 years this state will experience a shortage of qualified teachers.=

    It will not be 10-15 years. Check out enrollments at Illinois universities in the education programs. Historic lows I am told.

    =Pay freeze or even a pay reduction sounds like a good solution. Most teachers and government employees continued to receive pay increase during the last 5 or 6 years. Freeze pay and let the money saved from reduced salaries go to pay the pensions. Simple, but effective policy.=

    Please run for your local school board and make this happen. Just a question since you are such a visionary- are you OK with a statewide teacher strike? I doubt this would go under the radar, the teachers across the state have these things called the IEA and the IFT. They have email and social media. They might catch on. If you are OK with that I need to get your contact info so that I can direct all media and insane parents etc. to you for explanation/comment/abuse.

    BTW-Our huge pay increases were in the ball park of 1,8-2.2%. Over the last 4 years. Big savings there.

    Disclaimer- The above comments are intentionally full of snark and sarcasm.


  83. - Wensicia - Thursday, May 14, 15 @ 11:21 am:

    ==Gov. Bruce Rauner is sticking to his plan to reduce retirement benefits for government workers==

    Perhaps this could be brought to a vote by the House next Thursday.

    Seriously, when will Rauner accept plain language in the IL Constitution and the judgement of the courts?


  84. - Calhoun Native - Thursday, May 14, 15 @ 11:21 am:

    ===Just shaking my head over this.===

    Yup. I’m with you RNUG. It feels like Goundhog Day here today.


  85. - dupage dan - Thursday, May 14, 15 @ 11:22 am:

    So, what’s the line on an amendment being put forth and passed? What odds of this coming to pass? Thankfully, I will be gone (one way or another) by 11/16 so it won’t impact me but it will do so on co-workers.


  86. - Name Withheld - Thursday, May 14, 15 @ 11:24 am:

    RNUG - do you think you could put together a pamphlet or booklet? Maybe with some pictures and illustrations? Kind of like that animated DNA from Jurassic Park that explained genetic recombination and splicing.

    Just to help people who seem to think that firing all state employees and then rehiring some is a good idea. Or maybe for those who think the Supreme Court decision is, you know, just a suggestion and not really binding or clear.

    I’m really starting to believe that people are being intentionally and willfully obtuse when it comes to the reality we live in.


  87. - Juvenal - Thursday, May 14, 15 @ 11:25 am:

    === Such a freeze would have to last several years to have a significant impact. ===

    I would suggest not a freeze, but a cap, or some variation thereof.

    The Governor’s office could make the first move by announcing he is reducing the salaries of his own staff to below $99K effective June 1st.

    That would put a lot of pressure on the unions at the bargaining table, while also giving the governor’s office some skin in the game, and also encouraging staff at the top end of the pay scale to hand up their hats.

    Starting salaries for low wage workers should not be frozen in place though.


  88. - Flavurful - Thursday, May 14, 15 @ 11:27 am:

    RNUG: Thanks for your past and present comments. Lotta head shaking going on.


  89. - Anonymous - Thursday, May 14, 15 @ 11:28 am:

    I am so greatful to RNUG.

    I always search the comments for your post even in blogs that don’t appeal to me.

    Every time that I see your post, I feel better about what we are going through.

    You are truly an asset to Capitol Fax, State Employees, and families, and the good citizens of Illinois of which State Employees are a part of.

    Thank you RUNG for being here and for all that you do.


  90. - RNUG - Thursday, May 14, 15 @ 11:31 am:

    == do you think you could put together a pamphlet or booklet? ==

    I do four 28 - 32 page semi-professional newsletters a year for one of the classic cars clubs I belong to. That (and commenting here) is enough unpaid writing for a year.


  91. - Name Withheld - Thursday, May 14, 15 @ 11:32 am:

    RNUG is a godsend to these forums. Reading his posts is like attending a master class on pensions and the law. And regardless of his own leanings, I never get the feeling that he’s partisan. It calls it fairly and unbiasedly (if that’s a word).

    Thanks RNUG.


  92. - Name Withheld - Thursday, May 14, 15 @ 11:34 am:

    ==I do four 28 - 32 page semi-professional newsletters a year for one of the classic cars clubs I belong to. That (and commenting here) is enough unpaid writing for a year.==

    I was thinking some on the level of a first-grade primer. Using short words. But that’s okay - and I wasn’t really serious. Regardless, thanks for all that you’ve done to help us understand this issue.


  93. - Poster - Thursday, May 14, 15 @ 11:35 am:

    I like Sage’s idea. Let’s spend 2 years and pass a constitutional amendment. Then let’s pass a new pension reform law. Then let’s spend 2 more years for it to get to the ISC where there will be held unconstitutional.

    Then let’s continue this discussion, 4 years from now.


  94. - Demoralized - Thursday, May 14, 15 @ 11:37 am:

    ==First, we could fire everyone and hire them back as new employees under the new system. Two, fire everyone and hire a whole new slate of employees under the new system. Three, privatize everything and shift public sector employees into the private sector.==

    You’re joking right? You work for the IPI don’t you.


  95. - Plain Dumb(founded) - Thursday, May 14, 15 @ 11:41 am:

    I get that we have a “true believer” as our Governor but seriously, the “I disagree” response to the ILSC opinion is beyond belief. All these comments attempting to get around the recent decision goes past critical thinking and ventures into overtly hostile bloviating.

    This was not only a clear decision, it was freaking unanimous. Not one darn dissenting vote. There is no “I disagree” to it.

    “I disagree that there are 12 months in a year.”

    “I disagree that 2 + 2 = 4.”

    That’s the level of debate that we are at and to have that coming from the Governor’s office and certain leadership is not only depressing, it’s downright scary.


  96. - Flavurful - Thursday, May 14, 15 @ 11:47 am:

    === I like Sage’s idea…Then let’s continue this discussion, 4 years from now. ===

    Ya know, conventional wisdom was that a clear ISC decision would empower the GA to *finally* raise the needed revenue to pay off the unfunded pension debt. They could just blame it on the court. An effective political script is already written.
    Seize the day folks! Blame it ALL on the Court and get on with it. We’ll play along…it’s the only way forward.


  97. - dupage dan - Thursday, May 14, 15 @ 11:49 am:

    === - Sage - Thursday, May 14, 15 @ 11:16 am:

    Rich, the ILSC opinion doesn’t define what a “benefit” — i.e., whether it is only an accrued right or privilege or whether it included potential future-accrued rights and privileges. It’s not rock solid. It’s irresponsibly ambiguous ===

    ===Under article XIII, section 5, members of pension plans subject to its provisions have a legally enforceable right to receive the benefits they have been promised… The protections afforded to such benefits by article XIII, section 5 attach once an individual first embarks upon employment in a position covered by a public retirement system, not when the employee ultimately retires ===

    Sage, what part of the above paragraph do you NOT understand. How much more plain can the language be made?


  98. - Old and In The Way - Thursday, May 14, 15 @ 12:03 pm:

    - Sage - Thursday, May 14, 15 @ 11:16 am:

    Rich, the ILSC opinion doesn’t define what a “benefit” — i.e., whether it is only an accrued right or privilege or whether it included potential future-accrued rights and privileges. It’s not rock solid. It’s irresponsibly ambiguous.

    Sage-You simply don’t know what you are talking about.

    First- your comment on the ISC ruling. The court rules on the issues before it and rarely expands beyond that narrow range. It relies heavily on established law and prior opinions. As such they do not generally repeat themselves. The definition of the word or term benefit in this case has been defined many times and consistently. The ruling on subsidized healthcare in July 2014 is just the latest, you might want to read it.

    Second-Your notion that future benefits are not covered is simply and demonstrably wrong. I suggest you actually read the Felt and Peters opinions referenced in the opinion as well as others where it is clearly defined.

    Finally, your comment as to the quality of the courts writing, language and opinion confirms to me that you really have no real knowledge of the court or its proceedings. How many decisions have you written in your vast experience as a judge? How many cases have you argued in front of the ISC? It’s easy to sit in the cheap seats with no knowledge, experience or education and make believe you are an expert or “sage”.

    The reality is quite different. I would suggest it is you who is irresponsible.

    Have a nice day.


  99. - Sage - Thursday, May 14, 15 @ 12:05 pm:

    dupage dan — The language that you quote is absolutely not clear on whether a “benefit” includes a future accrued right or privilege. I recognize that the language regarding protections attaching once an individual first embarks upon employment may be distracting to a lay reader. It still doesn’t answer the question of what a “benefit” is. Is a benefit a potential future accrued right or privilege, or is it the rights or privileges that have accrued to date?


  100. - AnonymousOne - Thursday, May 14, 15 @ 12:08 pm:

    The state deserves to have a teachers shortage and I hope it happens sooner rather than later. How many times have you heard that ANYONE could do that job? Let ANYONE do it then. When it comes to your children or grandchildren, quality is so important but after you are finished with the process, mostly there are whiners who say Education costs too much. It goes without saying that you get what you pay for. Any young person who aspires to teach is hopefully paying attention to what everyone thinks of the value of a teacher. And hopefully they take a huge pass on the profession. It just is not worth this.


  101. - Andy S. - Thursday, May 14, 15 @ 12:10 pm:

    I forgot to mention collective bargaining issues in my post above, but in a way this actually enhances what I wanted to say. Even if every union in the State of Illinois were to disappear immediately, supply and demand dynamics in labor markets very likely would make a long-lasting salary freeze unworkable.


  102. - foster brooks - Thursday, May 14, 15 @ 12:11 pm:

    Please put more money in education we have a reading comprehension problem in this state


  103. - jdcolombo - Thursday, May 14, 15 @ 12:21 pm:

    Sage -
    You may be technically correct that the court did not specifically define “benefit” in its opinion. However, in the general law of contracts, it is well-accepted that executory actions are “benefits” that are enforceable. In fact, most contracts are nothing but agreements about future actions. If I agree to buy your car for $10,000 and you accept that agreement, we have a legally-enforceable contract, even though the “benefits” (the car for me, the money for you) will only happen in the future. If you refuse to deliver the car upon my tender of payment, you have breached the contract.

    If an employee’s pension is a “contract,” the terms of which are set in stone at the date of employment, then under standard contract principles, executory actions (e.g., things that will happen in the future) are protected. That’s what contract law is all about - protecting expectations of future action.

    John Colombo


  104. - archimedes - Thursday, May 14, 15 @ 12:21 pm:

    In the argument of whether the ISC intended the constitution to protect future benefits, it should be noted that they found the new law diminished benefits in at least five ways. One of those ways was a new cap on future salary - capping future salary earnings at the limit in the Tier 2 formula or the present salary (if greater than that).

    The State cannot change the pension code to disallow future salary levels to count in the pension formula.


  105. - CharlieKratos - Thursday, May 14, 15 @ 12:26 pm:

    It’s all fine and good to fiddle with numbers and play politics with pensions, but please, people, realize what you are doing. These are people’s lives, we’re talking about here. People who are the least able to defend themselves. No, I’m not talking about the teachers and the state workers, though it would apply to them as well. I’m talking about the people that are supported by the teachers and state workers. Families who’s lives are disrupted or potentially ruined because they can’t get the help they need in a timely and professional fashion. Children who will be denied quality teaching because nobody wants to be in a job where they’re constantly attacked and declared unworthy. How much further into the future is that going to affect those children, and their children. I just wish these (many words banned) would pull their head out of their political (banned word) and realize the affect they’re having on the future of this state by playing these games.


  106. - nixit71 - Thursday, May 14, 15 @ 12:27 pm:

    According to the “Teacher Shortage Areas
    Nationwide Listing” report from USDOE, Illinois currently has the following teacher shortages:

    Bilingual Education
    Learning Behavior Specialist
    Standard Elementary Instructor (Chicago only)

    Seems as thought the rumors of a teacher shortage in our state has been exaggerated a bit. Teacher shortage and retention has been debated back and forth for decades. You might have heard “one-half of all new teachers leave within five years”, but recent studies have shown that number is less than 20%, and it gives no context as to how that related to other professions or the state of the economy at the time. There are only so many employment options for non-technical/medical degrees. Not everyone can be a talking head on ESPN.

    All professions are cyclical. When I started college, everyone said there was a shortage of engineers. When I graduated, employers said “we have too many engineers.”

    http://www2.ed.gov/about/offices/list/ope/pol/tsa.html#list


  107. - Sage - Thursday, May 14, 15 @ 12:27 pm:

    John Colombo — The expectation of future action here is the future payment of a pension benefit — not necessarily accrual of a future benefit under the same regime.

    To underscore the point, let’s take a look at the July 2014 ILSC opinion Old and In The Way references. That opinion is based on a loose definition of benefit in the general employee benefits context. It also cites a similar Hawaii case in the pension protection context, derived on a provision of the Hawaii constitution that protects “accrued benefits”. The Illinois Constitution only says “benefits”, and the ILSC has not defined whether that means “accrued benefits” (like Hawaii) or any potential future accrued benefit as well:

    [From the July 2014 ILSC opinion:] Our conclusion that health insurance subsidies are constitutionally protected by the pension protection clause is supported by the recent decision in Everson v. State of Hawai’i, 228 P.3d 282 (Haw. 2010), which addressed the reach of a provision in the Hawaii state constitution that is similar to article XIII, section 5, and shares the same origin. That provision states that “[m]embership in any employees’ retirement system of the State or any political subdivision thereof shall be a contractual relationship, the accrued benefits of which shall not be diminished or impaired.” Haw. Const., art. XVI, § 2.


  108. - Logic not emotion - Thursday, May 14, 15 @ 12:32 pm:

    I think another commentor’s quote summarizes it pretty well…

    ““Several year” pay freeze. That should get us some quality state workers.”

    This whole discussion will drive top notch individuals away from even considering state employment.

    When did it become acceptable, and even commonplace, to treat the people that work for the citizens of the state as worthy only of disdain. When did state workers become second class citizens?


  109. - Logic not emotion - Thursday, May 14, 15 @ 12:34 pm:

    Apologies to CharlieKratos. Didn’t mean to restate all of his post and certainly not without credit. The first and third lines in my post were mine.


  110. - Skeptic - Thursday, May 14, 15 @ 12:35 pm:

    Rich: Maybe along with your list of banned words you (or someone) could come up with a sort of Glossary, or FAQ. “We can just fire everyone.” No, See FAQ #24. “Can we recall?” Maybe, unlikely, See FAQ #75. “Waste, fraud and abuse.” See FAQ #1, “What about…?” See FAQ #RNUG.


  111. - skeptical - Thursday, May 14, 15 @ 12:39 pm:

    Given the recent Sup. Ct. decisions (pension and health care), how did the State get away with changing benefits for employees on Medicare - they now either must choose to be on Medicare Advantage or receive no state health benefit. State used to be secondary for those on Medicare.


  112. - RNUG - Thursday, May 14, 15 @ 12:40 pm:

    One unintended consequence to this whole pension uncertainty the past few years is some level of reduced economic activity. Speaking just for myself, I have cut back on discretionary spending and delayed a number of major expenditures. My newest car (Mrs. RNUG’s) is 19 years old (mine is 26). The roof on my house is about 22 years old. In the normal course of things, I would have replaced some of those items.

    Faced with the uncertainty, I suspect other government workers and retirees have also delayed things. (And yes, I also recognize the temporary income tax increase could be said to have had the same effect on all workers.)

    Still, I wonder how much the uncertainty has that depressed state revenues?


  113. - NotYetRetired - Thursday, May 14, 15 @ 12:42 pm:

    ==- skeptical - Thursday, May 14, 15 @ 12:39 pm:

    Given the recent Sup. Ct. decisions (pension and health care), how did the State get away with changing benefits for employees on Medicare - they now either must choose to be on Medicare Advantage or receive no state health benefit. State used to be secondary for those on Medicare.==

    Health care benefits are negotiated with the union. The legislature does not vote on it. It is not in statute.


  114. - RNUG - Thursday, May 14, 15 @ 12:46 pm:

    == how did the State get away with changing benefits for employees on Medicare ==

    No one has challenged that in court yet. The State is still providing premium free health insurance, just not necessarily the program you want. As the State lowers / attacks the health insurance level provided, sooner or later we will see a court case questioning at what point said changes constitute diminishment. I think that was even brought up in questions during the oral arguments in the Kanerva decision but (without rereading) I don’t remember it being specifically addressed in the decision.


  115. - thunderspirit - Thursday, May 14, 15 @ 12:47 pm:

    === When did it become acceptable, and even commonplace, to treat the people that work for the citizens of the state as worthy only of disdain. When did state workers become second class citizens? ===

    I’m 46, and I’ve heard “government worker” as a pejorative term for most of my life, FWIW. Your mileage may vary.


  116. - Name/Nickname/Anon - Thursday, May 14, 15 @ 12:50 pm:

    ==One unintended consequence to this whole pension uncertainty==

    Not to mention all those that retired early than they would have to avoid the mess, that was a whole bunch of extra benefit payments that were made.


  117. - A Jack - Thursday, May 14, 15 @ 1:00 pm:

    I think that the idea to fire all state employees really underscores the need for AFSCME to better inform the public as to what state employees do and their level of training to accomplish those tasks. Certainly they could take some of that money earmarked for campaign contributions and use it on a public awareness campaign.

    This campaign would certainly be helpful if a constitutional amendment ever reaches the ballot. Certainly the ‘We Are One’ campaign did reach a few ears.

    I would venture that these ‘fire them all’ advocates think the vast majority of state workers are simply unskilled labor and could be easily replaced by another unskilled laborer off the street. That idea certainly trivializes the vast institutional knowledge that most state workers have on the rules, regulations and procedures that allow the government do the work of the people.


  118. - nixit71 - Thursday, May 14, 15 @ 1:02 pm:

    ==Still, I wonder how much the uncertainty has that depressed state revenues?==

    I’m sure it has. But it has far more reaching impacts to financial stability for most families.

    People throw out “just go back to 5%” like it’s chump change and no big deal. But for a family making $80K/yr, the bump from 3 to 5% cost them $1,600 per year. Even now, it would be an extra $1,000. That’s not chump change, considering all the other expenses that go along with raising a family. That’s your child’s minimized college fund that evolves into your child’s increased college debt burden that further evolves into your child’s reduced retirement savings. You’d be surprised how long that follows you.


  119. - Arizona Bob - Thursday, May 14, 15 @ 1:07 pm:

    Your right about the three teachers’ retirement funds, Rich. That’s where the real liabilities are. the “good news” here is that teachers aren’t covered by civil service protections.

    What can be done to address the problems there? First you have to put in legislation that creates downward pressure on senior faculty pension basis salary growth, which is in the hands of the local schools and colleges. One way of doing this is to have cost shifting to the locals for final salaries and pension inclusive benefits, “end of career” spiking, and early retirement benefit packages.

    In the first case, the school aid formula could change to penalize districts with high average and retirement level step salaries. there could also be bifurcation of pension contributions based on pension basis salary. the state could make the matching “employer” contributions up to, say $40K and the district or university would be responsible for all contributions above that amount. Regarding early retirements and “spiking”, the locals could be made responsible for paying the FULL actuarial lifetime costs of early retirement (perhaps amortized over time or in lump sum)as well as the FULL un funded portion from the up to 16% per year lifetime pension bump from spiking.

    Of course, public strikes need to be prohibited in order for any change to work. Loss of certification as a penalty for striking, as is the case in Texas, is the minimum that needs to be passed. Otherwise the unions will kill any responsible restraint on salary, benefit and pension growth.

    I really hope that privatization of instruction isn’t necessary to get this under control. It would hurt a lot of innocent faculty and the students through the animosity and chaos, but that’s about the only option if the GA and Guv keep Illinois amongst the backward nine states that still allow teacher strikes.


  120. - AnonymousOne - Thursday, May 14, 15 @ 1:14 pm:

    Three?

    TRS, SURS…..what have I missed?


  121. - Enviro - Thursday, May 14, 15 @ 1:14 pm:

    - A. Staller - @ 10:12 am:
    == I wonder whether the game plan is to delay a “solution” so that the pension hole is so deep that it can’t plausibly be filled with new revenue and benefits are slashed via bankruptcy or some other type of insolvency.==

    Yes, this could be the possible game plan, or perhaps it is just a stalling or delaying negotiating tactic almost like gaslighting.

    Just ignore this nonsense.


  122. - RNUG - Thursday, May 14, 15 @ 1:14 pm:

    == think the vast majority of state workers are simply unskilled labor ==

    I know of at least one position that requires a year and a half of intensive state training in order to properly understand and administer a specific government program. And even then, you still end up learning nuances after that.


  123. - skeptical - Thursday, May 14, 15 @ 1:15 pm:

    RNUG - I don’t see how the state is providing anything premium free. Retirees pay their full Medicare premium and also pay a premium to the Medicare Advantage company. Before the change, the state was secondary to Medicare and retirees only paid the Medicare premium.


  124. - Arizona Bob - Thursday, May 14, 15 @ 1:18 pm:

    @annonymousone

    The Chicago Teachers pension fund


  125. - RNUG - Thursday, May 14, 15 @ 1:27 pm:

    == Retirees pay their full Medicare premium and also pay a premium to the Medicare Advantage company. ==

    Age 65+ retirees (SERS, some SURS) with 20 years of service pay no premium for Medicare Advantage. They do pay their normal Medicare premium just like they previously did.

    See page 18 of this document (and note the exceptions at the bottom):

    http://www.illinois.gov/cms/Employees/benefits/trail/state/Documents/TRAIL2014.pdf

    There is a premium for dependents that is about the same as previously; see page 19.

    You do have to pay for dental just like you always did.

    I will agree the Medicare Advantage program is not as good a deal as the previous Medicare / state insurance. You end up with co-pays and deductibles you didn’t have before.


  126. - Demoralized - Thursday, May 14, 15 @ 1:33 pm:

    ==Illinois amongst the backward nine states that still allow teacher strike==

    I’m so sick and tired of these comparisons that I want to scream. Just because somebody else does it doesn’t mean we should.

    And Bob, ending public employee strikes isn’t the panacea that you think it is. If you think that solves any budget problems you are living in fantasyland.


  127. - RNUG - Thursday, May 14, 15 @ 1:39 pm:

    == Retirees pay their full Medicare premium and also pay a premium to the Medicare Advantage company. ==

    Adding, basically the state is covering the cost of the prescription drug, vision and wellness programs


  128. - Six Degrees of Separation - Thursday, May 14, 15 @ 1:44 pm:

    One way of doing this is to have cost shifting to the locals for final salaries and pension inclusive benefits, “end of career” spiking, and early retirement benefit packages.

    I was having a conversation with the spouse of a public teacher in an adjacent district. Apparently she was mulling over her retirement date and chose to pull the trigger. The way I understand it (at least in this district) you need to tell them 4 years ahead of time, and the district will give the employee an automatic 6% salary spike for each of the last 4 years. It’s the kind of deal most people aren’t privy to…I understand the arguments for an against teacher pay, but if the locals were paying the entire freight for the spikes, I’m not sure the deal would be so sweet.


  129. - Retired and fed up - Thursday, May 14, 15 @ 1:46 pm:

    The payment of a dental insurance premium is relatively new. It probably would have been stricken if challenged in court like the health insurance premium was but I think some kind of grievance was filed instead. Too late now - Statute of Limitations.


  130. - Filmmaker Professor - Thursday, May 14, 15 @ 1:49 pm:

    The unmistakable message sent to new state employees from modifying the constitution to get rid of the pension guarantee is: you are never going to get the pension we are promising you. That is the one, and only reason, to get rid of guarantee: so as to NOT pay pensions. What a great recruiting tool.


  131. - Just a lawyer - Thursday, May 14, 15 @ 1:50 pm:

    Even if an amendment to the Illinois Constitution, the Illinois supreme court has essentially stated that benifits of membership are enforcible as a contract. So…that won’t work and even if it would, there is still that pesky thing called the United States Constitution, which states:

    “No state shall… pass any law… impairing the obligation of contracts”. (Art. 1 Sec. 10 Clause 1)

    Even an Illinois constitutional amendment can’t get passed the US Constitution.

    Welcome to reality


  132. - Sage - Thursday, May 14, 15 @ 2:04 pm:

    Just a lawyer — The Illinois constitutional amendment could clarify that the definition of “benefit” means “accrued benefits” (or direct the judiciary to construe it that way), like it specifically does in a similar provision of the Hawaii constitution. That would be harder to invalidate in federal court under a contracts theory.


  133. - Just a lawyer - Thursday, May 14, 15 @ 2:12 pm:

    Sage - Unlikely.
    The Illinois Supreme court has already determined the legislative intent and purpouse. Done. And…reguardless…the US Constitution would prohibit the currently contemplated actions.

    Welcome to reality.


  134. - Just a lawyer - Thursday, May 14, 15 @ 2:14 pm:

    As painful as this sounds….it’s time for…..gassppppp!

    Cuts and revenue increases.

    Welcome to reality.


  135. - CapnCrunch - Thursday, May 14, 15 @ 2:15 pm:

    “I will agree the Medicare Advantage program is not as good a deal as the previous Medicare / state insurance. You end up with co-pays and deductibles you didn’t have before.”

    Which means that you are now paying a portion of the health care services you receive that was previously paid by someone else which means it costs the state less to pay an insurance company to insure you. You still receive premium free health insurance(20 year retiree) but the policy is not as comprehensive.


  136. - Anonymous - Thursday, May 14, 15 @ 2:18 pm:

    Sage: Thanks for the effort and all, but you’re just grasping/gasping…for air. Your “small legal minds” comment clinches the deal.


  137. - Anonymous - Thursday, May 14, 15 @ 2:21 pm:

    New word to ban

    Sage

    There done


  138. - Skeptic - Thursday, May 14, 15 @ 2:25 pm:

    sage: Three words: Ex post facto. Think about it a second. You sign a $100,000 contract to build a house. You get half-way done, and the other guy says, “I’m redefining ‘House’ to mean any structure up to and including 100 stories.’ Now build the rest of it for that $100,000″


  139. - RNUG - Thursday, May 14, 15 @ 2:26 pm:

    == Which means that you are now paying a portion of the health care services you receive that was previously paid by someone else ==

    But is it enough of a disparity to sue over?

    Given the health insurance changes everywhere, it probably has not reached that level. It would be a different issue if the State had backed down from a (slightly reduced) gold plan to a bronze or tin plan.


  140. - Just a lawyer - Thursday, May 14, 15 @ 2:44 pm:

    Enviro:

    Interesting thought. But States are not permitted to file bankruptcyunder the Bankruptcy code -yet. But under Obama, as we all know, the president has “a pen and a phone” so an “Executive Order” can now trump not just Federal law, but the US CONSTUTION itself. So….who knows…you might be right!


  141. - skeptical - Thursday, May 14, 15 @ 2:51 pm:

    RNUG - there was mention of a statute of limitations. Is it too late to challenge the change? I don’t like now being prevented from having a Medicare Supp. plan if I go with the Medicare Advantage.


  142. - Sage - Thursday, May 14, 15 @ 2:55 pm:

    Skeptic — I actually agree that the pension reform legislation invalidated by the ILSC is unconstitutional (because it diminished benefits accrued under the existing regime). My point is that the ILSC was not clear regarding whether “benefits” includes future accrued benefits. This was an irresponsible ambiguity. If the ambiguity was actually intended, SCOTUS, for example, would have said something to the effect of, “This opinion relates to accrued benefits and we do not consider the issue of future accrued benefits.” The word “accrued” or any derivative thereof does not even appear in the ILSC opinion (except in the context of “accrued liabilities”). How do you give proper treatment to a discussion of pension reform when you don’t even mention or consider the accrued vs. not-yet-accrued distinction?


  143. - RNUG - Thursday, May 14, 15 @ 2:59 pm:

    == RNUG - there was mention of a statute of limitations. Is it too late to challenge the change? ==

    The mention of limitation was over then dental; that’s been in place a lot of years.

    I’m not a lawyer; just someone who has read about pension law off and on since the mid-1980’s and worked some with contracts from the procurement side. I don’t know for an issue like the Medicare Advantage switch.


  144. - Just a lawyer - Thursday, May 14, 15 @ 3:06 pm:

    So……
    What part of the phrase “benifits of membership shall not be diminished” is unclear? Is not a future benifit a “benifit of membership? Because, if not, what is?

    Welcome to reality.


  145. - Sage - Thursday, May 14, 15 @ 3:19 pm:

    Just a lawyer — It is the definition of “benefits” itself that is ambiguous. Do you agree that the following two phrases have different meanings?

    1. “the accrued benefits of membership shall not be diminished”

    2. “the accrued and unaccrued benefits of membership shall not be diminished”

    Both of those statements are unambiguous and mean different things. The Illinois Constitution is ambiguous, and the recent ILSC opinion didn’t clarify this particular point.

    We can disagree on preferred policy outcomes and how the language “should” be interpreted. My point is that the ILSC did not entirely resolve this ambiguity, and most arguments from the political right to change the regime for future accrued benefits will be rooted to some extent in this argument.


  146. - Skeptic - Thursday, May 14, 15 @ 3:19 pm:

    Sage: You’re in denial just like the rest of them. “The protections afforded to such benefits by article XIII, section 5 attach once an individual first embarks upon employment in a position covered by a public retirement system, not when the employee ultimately retires.” That means what I got on Day 1 ***** IS ****** what I get. Doesn’t matter what you decide tomorrow, my benefit is at least what was given to me on Day 1. END. OF. STORY.

    You’re right, it doesn’t mention “accrued” or “future” because it doesn’t have to. It’s not the least bit vague.


  147. - Huh? - Thursday, May 14, 15 @ 3:20 pm:

    When I read the ILSC opinion and all of the recent commentary, I was struck by the statement that the pension is a contractually enforceable relationship upon hiring.

    The question that comes to mind is for those employees who are not yet vested in the pension, how can it be a contractual enforceable benefit? Until an employee is vested, they are not entitled to a pension.

    At the risk of being banned forever, I am going to ask the question - Why can’t the pension be changed for those employees who have been hired but not yet vested?


  148. - Anon III - Thursday, May 14, 15 @ 3:22 pm:

    Lawyer, Sage, Anon, et al: It would be well to remember that these writings are only “comments” not briefs or case notes. Cut a little slack.


  149. - RNUG - Thursday, May 14, 15 @ 3:28 pm:

    == Why can’t the pension be changed for those employees who have been hired but not yet vested? ==

    I believe they no longer make a distinction between “hired” and “vested”. About the only distinction is between “probationary” and “certified”. While I know of exceptions, under SERS, generally you finish your probationary period after 6 months and are then certified.

    At one time, maybe the late 60’s or early 70’s, I remember the retirement system did make a distinction and did not start deducting for the pension system until you were certified. I don’t believe that is the case today.

    Maybe someone who works in Personnel today can clarify it and correct me if needed.


  150. - Sage - Thursday, May 14, 15 @ 3:29 pm:

    Skeptic — You and I (and others including Jones Day and any number of other commentators) have reasonable and differing interpretations of the language of the opinion. That is by definition vague. The ILSC could have easily written the opinion in a way that was not ambiguous, or could have specifically stated that it was intending to be ambiguous and would rule on future reforms if/when challenged. My original post on this matter was that the ILSC fell down on the job — from an analytical and drafting perspective, although not necessarily on the outcome of the challenge.


  151. - Just a lawyer - Thursday, May 14, 15 @ 3:31 pm:

    Because employees have begun performance of their part of the bargain. If you contracted for a house, could you change the deal any time for any reason before the last swipe of paint? Of course not. Once the deal is signed (employee begins work) you can’t change the deal.


  152. - Arizona Bob - Thursday, May 14, 15 @ 3:32 pm:

    @Demoralized
    =I’m so sick and tired of these comparisons that I want to scream. Just because somebody else does it doesn’t mean we should.=

    No, you do it because its in the best interests of the people of your state. Prohibiting the extortion of the people through unlimited strike powers is clearly in the people’s best interests. If you choose to disagree, please tell why having a family have to take off work when the kids are home from a strike, having kids learn at home because their teachers walked out on them, and having schools give raises and benefits they can’t afford is in the public interest.

    =And Bob, ending public employee strikes isn’t the panacea that you think it is. If you think that solves any budget problems you are living in fantasyland.=

    It won’t solve all the problems by itself, but to ignore the strike extortion power’s contributions to Illinois having disproportionately high teacher salaries (15th nationally according to NEA) and spending 18% above the national average per pupil, while having 26th best performance academically according to the NAEP tests, is flat out embracing ignorance. It’s a NECESSARY part of any real cost and pension reform in Illinois education.

    Take a look at most of the 41 states that protect the children and taxpayers through prohibiting teacher strikes and you’ll typically see higher student outcomes for far less cost than in Illinois.

    What arguments do you have that allowing teacher strikes are in the public interest? It’s true that the number of strikes went down after allegedly Republican Guv Thomson passed ELRA in the 80’s, but I believe that was because schools were then helpless to defend themselves against the unions. No point fighting the battle and hurting the kids when the war was already decided in Springfield…


  153. - zonz - Thursday, May 14, 15 @ 3:36 pm:

    Am I correct?
    I believe the correct formulation would be
    “for a family with an adjusted gross income of $80K/yr, the bump from 3 to 5% cost them $1,600″

    …a signif. difference from “for a family making $80K/yr, the bump from 3 to 5% cost them $1,600″
    ——————————————
    - nixit71 - Thursday, May 14, 15 @ 1:02 pm:

    ==Still, I wonder how much the uncertainty has that depressed state revenues?==

    I’m sure it has. But it has far more reaching impacts to financial stability for most families.

    People throw out “just go back to 5%” like it’s chump change and no big deal. But for a family making $80K/yr, the bump from 3 to 5% cost them $1,600 per year. Even now, it would be an extra $1,000. That’s not chump change, considering all the other expenses that go along with raising a family. That’s your child’s minimized college fund that evolves into your child’s increased college debt burden that further evolves into your child’s reduced retirement savings. You’d be surprised how long that follows you.


  154. - RNUG - Thursday, May 14, 15 @ 3:39 pm:

    I don’t see it as vague. As -Old and In the Way- and others have commented, the IL SC has previously defined “benefits” (including as recent as Kanerva) and when said protections apply (date of hire or subsequent grant), and references some of those cases.

    Could they have been clearer in the SB-1 decision? Probably, but they didn’t necessarily need to be.

    Maybe this time IL SC should have just said: “Pay the pension funds!”

    If a similar case makes it back to the same court within a year, I suspect next time they will come close to saying: “What didn’t you understand? You are hereby ordered to make actuarially based payments to the five pension funds.”


  155. - Old and In The Way - Thursday, May 14, 15 @ 3:40 pm:

    Vesting as you refer to it means financially vested. Meaning that you can collect an annuity. However, in this case an employee is contractually vested on day one when they accept the job. While they have not yet earned the annuity they have the contractual right to earn the annuity as it is specified on day one. It’s a contract remember.


  156. - NotYetRetired - Thursday, May 14, 15 @ 3:42 pm:

    @RNUG - you are correct. The state no longer waits 6 months to begin retirement contributions. They begin immediately.


  157. - Flavufful - Thursday, May 14, 15 @ 3:48 pm:

    === Sage: You and I (and others including Jones Day and any number of other commentators) have reasonable and differing interpretations of the language of the opinion. That is by definition vague. ===

    There’s the rub. Your (and Jones’) “interpretation” is unreasonable. If you weren’t bending over [banned word] to strain semantic credulity, you wouldn’t see ambiguity…only clarity.


  158. - MyTwoCents - Thursday, May 14, 15 @ 3:48 pm:

    @AB, you continually throw out your 2 statistics about teacher pay and per pupil spending without context. In terms of cost of living as a whole where does IL rank? Where does the Chicago region rank? Since IL has a higher standard of living than most states wouldn’t it make sense that teachers would have a higher average salary? How much of the salary is union negotiated raises and how much is the broader economy? Secondly, the per pupil spending, how much of that is driven by the districts in the northern suburbs? How many IL districts have a per pupil spending significantly below the average? It’s easy to toss out statistics without any broader context but that doesn’t make what you said accurate for this discussion. I don’t have the ability to answer those questions right now but it’s just something to think about.


  159. - kimocat - Thursday, May 14, 15 @ 3:52 pm:

    Gee whiz, Arizona Bob, a big, relatively wealthy state like Illinois ranks only 15th nationally in teachers’ salaries? And that is “disproportionately high?” Just what rank do you think would be appropriate? And what kind of salary and benefit package should be offered to attract good, smart people into the profession? Or is this just more of the race to the bottom for college educated teachers and other government professional? Who needs a middle class, anyway?


  160. - RNUG - Thursday, May 14, 15 @ 4:03 pm:

    - Old -

    Thank you for clearly and succinctly explaining he difference.


  161. - Skeptic - Thursday, May 14, 15 @ 4:04 pm:

    +1 for Flavufful.


  162. - Demoralized - Thursday, May 14, 15 @ 4:11 pm:

    ==Illinois having disproportionately high teacher salaries (15th nationally according to NEA)==

    You say that like it’s a bad thing. What should the salary be Bob? Should we strive to be lowest?

    Also, given what the average salary is (from my research about $60,000) it’s pretty outrageous that you consider that “disproportionately higher.”

    ==spending 18% above the national average per pupil==

    Again, you say that like it’s a bad thing. What should we spend? What is the “magic” expenditure number for you that makes things all better? I have a hard time believing that spending less somehow makes it all better.

    ==is flat out embracing ignorance==

    So it’s ignorance to disagree with you. Got it.

    ==while having 26th best performance academically according to the NAEP tests==

    That’s right in the middle. Would it be nice to be #1? Sure. But I don’t think that statistic proves any point you are trying to make without some other context of who’s higher or lower than we are.


  163. - MJG Citizen 4 - Thursday, May 14, 15 @ 4:13 pm:

    “Membership in any pension or retirement system of the State, any unit
    of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be
    diminished or impaired.”
    Sage: Please answer my questions in my 2:45 post.

    And I will answer your false criticism of the ISC ruling. Just as in Kunerva (the state health insurance ISC ruling), the ISC is not going to let the state argue to include qualifiers or words that weren’t included in the protection clause. They ruled that retiree health insurance and the states promises to retirees and existing employees who will retire in the future are a protected benefit of membership in an IL retirement system. The ISC did not assume that protected benefits were limited to a retiree’s monthly pension payment. Similarly, do you see any mention of current accrued benefits versus future benefits in the above clause? The answer is no. Why would you think that the ISC is going to imply or limit the protection clause to only those benefits accrued to a certain point in your employment instead of the employee’s termination/retirement? The ISC is not going to split hairs like you and Rauner are trying to spin in an effort to cheat current Tier 1 members during the middle of the ballgame. Remember any savings in all these pension proprosals considered by the Gov and the GA leaders have all been direct reductions in pensioner’s benefits. Is that ethical, let alone constitutional? NO


  164. - skeptical - Thursday, May 14, 15 @ 4:14 pm:

    Just wanted to thank RNUG for the input.


  165. - West Side the Best Side - Thursday, May 14, 15 @ 4:23 pm:

    Sage - This is not a vague opinion. It is written in plain English and says exactly what it means. The first few paragraphs clearly set out what benefits are and uses SERS as an example. Read it again from a non-partisan position.


  166. - Mama - Thursday, May 14, 15 @ 4:29 pm:

    “That should get us some quality state workers.” He does not care about “quality” state workers. From what I have read, he plans to fire state workers and contract out their work like the RTW states have done.


  167. - zonz - Thursday, May 14, 15 @ 4:38 pm:

    Musing on some history:
    My dad was a con-con delegate and a very conservative guy - - though a strong advocate for civil rights.
    I was in college then and my friend from another state was visiting us in Chicago; he was into political philosophy.

    He recently recalled a discussion in which my dad emphatically contended that the state constitution was no place to put specific “legislative” mandates. My friend says I was arguing contra, also very emphatically.

    It was decades ago and I don’t recall the specifics, but my friend says he thinks “no diminution of pension benefits” might have been cited in the discussion - - as a legislative mandate.

    Today’s pension-constitutional crisis makes me ponder my dad’s view, i.e., whether this language should have been placed in the constitution.

    My current opinion is that the biggest problem with language like “no diminution of pension benefits” is not the substance of the policy but the fact that getting all the way to a final court interpretation - - to give meaning to the words in a specific context - - is such a daunting and uncertain process.

    Also a big problem is - - before it ever gets to court - - that the GA must address a specific situation with their bill, AND be faithful to the constitutional language, in the midst of an economic/fiscal/governance crisis, entailing political wrangling that is many times more difficult and protracted these days than when a greater number of *statesmen* (of both genders) sat in the chambers of Springfield.

    Bottom line for me: I go back to my recent comments about what I believe motivated the Sup. Ct. to reject the 2013 law with a unanimous vote and a rather strongly worded opinion. The “no diminution of pension benefits” language was written as it was and placed there because of a particular context, a particular history. The history cannot be ignored.

    As long as the BRU-CREW approaches their work without being cognizant of, and respectful to, that history, they will be taking great risk in crafting a bill. (Laughing to myself as I type that.)

    We must hope the statesmen are strong and, ultimately, prevail.


  168. - Old and In The Way - Thursday, May 14, 15 @ 4:41 pm:

    RNUG
    It’s been a while since I have had an opportunity to follow Capitol Fax regularly. I was out of state for much of the pension antics and ruling, but tried to check in from time to time. You did well my friend. Perhaps you should have followed a legal career!

    Maybe I’m just showing my age but I have little patience for the willfully ignorant and biased comments from the Peanut Gallery! (My nephew today wanted to know where the term Peanut Gallery even came from. He had never heard of Howdy Doody!)

    Thanks to you and Rich (as well as OW, Wordslinger, and the others) for providing this forum and contributing to the discussion. When all else fails just flog ‘em with the truth!


  169. - foster brooks - Thursday, May 14, 15 @ 4:49 pm:

    Rnug your insight and analysis on pension issues is brilliant but absolutely devastating to team rauner, I hope they don’t try to destroy or bury you.


  170. - Old and In The Way - Thursday, May 14, 15 @ 4:52 pm:

    Zonz
    I was a law student during the ConCon and worked as gopher and clerk for much of it. Of late I find myself recalling a number of debates and some of the colorful characters that were part of it. Unfortunately, I have no recollection of the pension debate.

    What I do recall was seeing a young Michael Madigan at the convention and E.B. Groen, from Pekin I think, saying that Madigan might have a future in Springfield. I have recalled that comment many times over the years. BTW I got the distinct impression that he didn’t really like Madigan.


  171. - Arizona Bob - Thursday, May 14, 15 @ 4:55 pm:

    @Demoralized

    I have no problem with higher spending when it results in commensurate student outcomes. The problem is that in Illinois that simply isn’t the case. In my old Illinois HS district, they paid teachers with only 20 years experience who were 30 semester hours past a masters $120,000 for 174 work days.

    in the education committee, I asked some questions about this, “What data do you have that shows that students with teachers at the top of the salary scale have outcomes better than those with only 5 years experience? What data do you have that shows that teachers with 30 hours past a masters in education have student outcomes any better than a teacher with minimal graduate work?”

    the simple fact is that they could produce no evidence that the “value” for the $120K teachers in the district was any better than that from journeyman teachers there.

    The starting salary in the district was about $50K for 174 days, effectively a higher rate than most engineering and business majors.

    Even in suburban districts resources are limited. Would the money have been better spent having more or longer school days, offering summer enrichment classes at no charge, or better developing online course capability than paying senior faculty $120K rather than a more appropriate $80K? Almost certainly.

    How did the salary schedule get so skewed in a way detrimental to the students and taxpayers? Senior faculty ran the unions, and the unions demanded the disproportionately higher salaries for….senior faculty.

    Why would the district go along with it? If they didn’t the teachers would go on strike, the schools would be shut down, the board would get voted out and the teachers would lose nothing because the state would require the strike days be made up.

    Don’t forget, of course, that the excessive senior faculty salaries drive some truly ridiculous pension payouts, as the ones that currently are devastating the state.

    This is how strikes strangle the ability of elected school boards to allocate resources fairly and effectively, hurt the children and taxpayers, and drive costs to unsustainable levels.

    If the power to strike is prohibited, boards can them set up fair salary schedules that allocate resources where it helps the students most and most efficiently makes use of tax dollars.

    The positives in local real estate tax burdens, pension bloating and state budget deeficits are simply too strong to be ignored, except for that narrow group who believe Illinois education is not about public value and the students, but about overfeeding a recalcitrant and immovable bureaucracy.


  172. - CapnCrunch - Thursday, May 14, 15 @ 5:01 pm:

    “But is it enough of a disparity to sue over?”

    No


  173. - MJG Citizen 4 - Thursday, May 14, 15 @ 5:03 pm:

    For those who seem to have pension envy or wish public employees to retire in a fashion similar to you as a race to the bottom, remember that if you qualify for and will receive a Social Security benefit you do indeed have a defined benefit pension plan as a result of your employment. Granted public pensions are generally better than Social Security benefits. The reason for that is that IL public retirement systems are funded by member and employer (state) contributions/appropriations plus a key funding component, investment earnings on the employee and employer contributions. Whereas Social Security only has employee and employer contributions and has no investment earnings. Investment earnings are generally @ 60% of the overall funding of IL public pensions so Social Security is missing out on the main funding component to pay its defined benefit to SS recipients. For TRS the current employer (state) normal cost on yearly service is in the range of 7 to 8% of the member’s salary. That is cheaper to the employer than paying 6.2% for employer SS contributions plus a typical employer 401-k match of 3% of salary.

    However, due to the state’s decades of underfunding and the lost investment income not received on these unpaid employer contributions, the state’s actual annual appropriate (employer cost) is 33 to 35% of the teacher’s current salary. Think about that. 80% of the appropriation amounts (7.6 billion total for all 5 state systems for 15-16) is basically interest on a mortgage created by all past Gov/GAs. Only 20% of the annual contribution is needed to cover the current year’s earnings benefit.
    Also remember to those in private industry who have SS benefits but didn’t put at least 10 to 15 percent of their income in a 401-k or other deferred comp plan for 20 or more years, if you run out of money in your retirement it is likely that taxpayers will be footing the bill to pay for your remaining life living expenses/nursing home costs, etc.
    It would be better if everyone had an employer defined benefit pension plan (other than SS) that only needs employer total funding of 7 to 8% of your salary each year and provided you with a livable retirement benefit. That type of arrangement can be spread out over 30 years of employment for funding and investment and then drawn down over the remainder of your life in retirement. Whereas relying upon individual discipline to fund their retirement account properly and then having to be bailed out near the end of a retiree’s life is a variable, sudden and unbudgeted debt that often becomes a debt of taxpayers. Why don’t we all hope for a race to the middle if not the top rather than wishing equality in a. race to the bottom? Just sayin’


  174. - PublicServant - Thursday, May 14, 15 @ 5:58 pm:

    I’m wondering what the percentage of tier 2 members in the system is today? What will it be 5-7 years from now? My point. Even if everything goes Rauner’s way regarding pensions (I try not to laugh as I type that), the ruling would take, as someone opined yesterday, 5 to 7 years. How many tier 1 employees would be left in the system then, and, on average, how many years of their future earnings would be left for Rauner’s proposed solution to affect?

    I think enough time has been wasted. Tier 2 was legal. Any further attempts to diminish tier 1 will quite likely be unsuccessful, and even if ultimately successful will produce little savings. Cut the bloviating (that was for the Fox crowd tyvm), face reality, do the just thing, and fashion a method of paying your debts and pay for your current programs at the same time. When that happens, you’d be surprised at how quickly the ratings agencies will upgrade Illinois debt. As someone mentioned earlier, we’ll need statesmen to accomplish this, however. Who’s going to step up to the plate to get it done?


  175. - sweet p - Thursday, May 14, 15 @ 6:27 pm:

    I was told your retirement is only concrete if you retire. So maybe the money an employee puts in would be but it has been said while your still working the retirement system can make changes as long as you haven’t retired. After you retire then you have a binding contract for life. But you don’t have a binding contract when you are working and you haven’t retired yet.


  176. - PublicServant - Thursday, May 14, 15 @ 6:34 pm:

    Not sure where you heard that sweet p, but the Illinois Supreme Court has ruled exactly opposite that. Given your source’s opinion, vs the quite clear findings of the ISC, I sure know who I’d believe. But then again, that’s up to you.


  177. - PublicServant - Thursday, May 14, 15 @ 6:36 pm:

    But you’re source is correct. Changes can, of course be made while you’re working, so long as those changes don’t diminish or impair the benefits of membership in the pension.


  178. - Illinois law - Thursday, May 14, 15 @ 6:51 pm:

    Sage,
    Not sure you are aware that Professor John Columbo is the U of College of Law’s Interm Dean. From the College of Law website: John D. Colombo
    Interim Dean
    Albert E. Jenner, Jr. Professor of Law

    John D. Colombo, the Albert E. Jenner Jr. Professor of Law, serves as the interim dean of the University of Illinois College of Law. He was associate dean of the college from 1995-98, 1999-2000 and 2010-12, acting dean during 1998 and 2001, and interim dean in 2002. He also was the Thomas M. Mengler Faculty Scholar from 2004-06.

    You can read the entire bio here:
    https://www.law.illinois.edu/faculty/profile/JohnColombo


  179. - Old and In The Way - Thursday, May 14, 15 @ 8:55 pm:

    Illinois Supreme Court? What do they know? They aren’t specific enough, etc., etc.

    Dean of University of Illinois Law School? What does he know? He won’t answer my silly questions or legitimize my ill conceived legal opinions.

    Sage, what they both have in common is the education and experience to understand the ruling and the legal basis for it. Oh, and one more thing, they both know that you don’t know what you’re talking about!


  180. - Enviro - Thursday, May 14, 15 @ 9:38 pm:

    - sweet p - @ 6:27 pm: == I was told your retirement is only concrete if you retire.==

    You were told??? Didn’t you read the ISC ruling?
    It sounds like you are listening to the wrong people.


  181. - Enviro - Thursday, May 14, 15 @ 9:43 pm:

    But it is also true, as PublicServant said, changes can be made while you’re working, so long as those changes don’t diminish or impair the benefits of membership in the pension.


  182. - RNUG - Thursday, May 14, 15 @ 10:28 pm:

    - foster brooks - @ 4:49pm … and others,

    First, you are embarrassing me. A simple ‘thank you’ is enough.

    Second, I’m a state retiree and whatever happens will affect me the same as a lot of people. I have my preferences which I sometimes state, but I try to identify that as separate from the straight reporting and analysis. I’m not unbiased but I do try to be objective except when I give in to writing snark.

    Third, if something does get me, it will probably be stress … most likely from my kids since the job no longer contributes to it. But with age and experience (and lots, lots less caffeine!) you learn to shrug it off because it’s not going to make a difference in the long run. Doesn’t mean I don’t get mad or occasionally feel like pounding my head against the wall.


  183. - Arthur Andersen - Thursday, May 14, 15 @ 10:35 pm:

    ILLaw, thanks for pointing that out. I forgot to do so yesterday when he schooled a couple lesser legal minds and regretted my omission.

    zonz and Old, Judge Henry Green from Urbana was a good friend and political ally of my late father. Some years after the Convention, I think after I had moved to Springfield to work in the Thompson administration, the Judge had the same observation about Speaker Madigan.

    MJG Citizen 4, very well stated. You must have worked with a smart guy along the way.


  184. - RNUG - Thursday, May 14, 15 @ 10:38 pm:

    -Old-

    Missed you also. Thanks for the kind words. Not sure I would have enjoyed a legal career; I would probably have been better suited to doing research and writing briefs than appearing on court.

    Re patience … in general, I’ve developed more of it with age but less tolerance for deliberate ignorance. As our parents would have said, we’re more inclined to call a spade a spade.

    Hope you’re doing well.


  185. - Late to the Party - Friday, May 15, 15 @ 7:58 am:

    Sage - Thursday, May 14, 15 @ 11:16 am:
    “Rich, the ILSC opinion doesn’t define what a ‘benefit’ [is]”

    Bill Clinton - Sept 1998:
    “It depends on what the meaning of the word ‘is’ is.”


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