Capitol Fax.com - Your Illinois News Radar » RNUG examines Rauner’s latest pension reform push
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
RNUG examines Rauner’s latest pension reform push

Tuesday, Oct 20, 2015

* From yesterday

During a town hall meeting in Decatur, Illinois’ Governor repeated his call for structural reforms and a balanced budget and also laid out a few details about how he wants to reform pensions. Governor Bruce Rauner said there must be changes to the pension system and said he has a constitutional fix. His idea includes a new deal moving forward.

“People can keep their old deal if they want but then their salary increases don’t go into the pension. Or they can have their salary increases count towards their pension if they get into a new deal.”

To encourage workers to enter a potential new tier, the Governor said there would be incentives offered. If the plan is passed by the General Assembly and implemented, Rauner said there would be big savings.

“And if we do that we can save $2 billion for you as taxpayers.”

The Governor said his administration has researched the proposal and said it is constitutional.

* Our resident pension expert RNUG (who used to post under the longer name “Retired Non-Union Guy”) was dealing with some family health issues and didn’t comment until last night. Since many of you probably missed it, here, with some minor edits for things like spelling corrections, is his initial analysis

All,

Rich tried to get me earlier but I’ve been dealing with a medical issue with an elderly mother-in-law.

I haven’t read any comments, but I did catch the story about the remarks in Decatur either yesterday or today. I just ignored it because it sounds like yet another more or less coercive choice going forward. Given the Pension Clause and the clear SB-1 ruling, unless it contains a complete “keep what you’ve got option”, it won’t pass Contract Law logic as consideration.

Yes, you could make such an offer along the lines of what Rauner suggested and bribe some people into taking cash and moving to a new tier and have it be legal, but it probably won’t be the existing “Tier 1″ people who take the deal. They will most likely say “thanks but no thanks, we’ll keep what we have” and the courts will back them up. In the past, the courts have mostly shot down any change (age, years of service) that, when applied to the formula, would have reduced a pension.

I get where Rauner is coming from. He thinks yet to be earned benefits can be modified; the courts have disagreed. Eric Madiar, when charged with finding a loophole in the Pension Clause, could only come up with the “consideration” possibility in contract law. But anyone who spends any time researching contract modification by consideration will find it has to be totally voluntary.

And, as it stands now, the threat of not having mythical future salary increases included in the pension calculation may not be much of a threat. Rauner wants to hold the unions to no raises; a lot of the Merit Comp people haven’t have a raise in 13 years. In the case of SERS retirees, the Final Average Compensation is based on the highest consecutive 48 months in the last 120 months (10 years) of service. So if you aren’t getting raises anyway, it won’t make a bit of difference.

* He then responded to some comments by others

== Layoff the public employees immediately ==

Aside from union contracts, there is the little thing called “Civil Service” that protects almost all State employees, both union and Merit Comp

== Are we really going to go through this process again? ==

Sounds like it. The Rauner crew may want to be careful what they wish for. The last time the IL SC stopped short of ordering specific pension fund payments …

== It is going to take major backbone to deal with our pension mess in a fair, responsible and constitutional manner. ==

Fair - keep your contracted promise

Responsible - pay what is owed

Constitutional - “Tier 2″ was the reform

The only things left to do with the pensions are to (a) restructure the debt (longer ramp or borrow the $110B in the markets at lower than the assumed rates of return), (b) probably shift the normal pension cost on the local school districts AND (c) come up with revenue to pay off the debt.

== by constitutional amendment, almost anything would be constitutional, just extremely difficult to enact. ==

Even by constitutional amendment it wouldn’t get rid of the existing “pension contract” or the $110B debt owed to the pension funds. If you can’t get rid of the $110B (or a major portion of it), there is no reason to amend the constitution or “reform” pensions.

== Would you lend your money to this state? ==

Sure; they’ve never missed a bond or pension payment in about 100 years or so.

== Eric Zorn: Rich is right that this is far from a new idea. Eric Madiar, a lawyer who is Cullerton’s pension expert and widely considered an honest broker in these matters has looked carefully at the case law and thinks it can pass constitutional muster — I did a column on it recently http://www.chicagotribune.com/news/opinion/zorn/ct-tough-choice-pension-reform-perspec-0909-20150908-column.html ==

I remember reading it and disagreeing with it.

== How about trying this: no overtime, unused sick days or vacation days gets to be applied toward retirement. ==

At best, maybe. See the various decisions that say (to paraphrase a bit) “enhancements granted by the legislature can’t be diminished once granted.”

== What Justice Burke was saying was that the state had options to meet the obligation. Taxes etc. she never suggested that there is an out or a way to legally diminish pensions. Read the opinion, it is quite clear in its inference. Raise revenue and pay the debt. ==

-Old and in the Way- is on it. The other thing in the decision was a veiled threat to revisit the “hands off on how it is funded” stance in the IFT decision.

As I said at 8:21pm, Rauner and company want to be very careful what they wish for. They could end up in a real world of hurt if the IL SC decides they’ve heard enough attempted end runs and orders actuarially based annual funding, but doesn’t (and they won’t) order a tax hike.

== Wordslinger: RNUG, they’re softening up the ground — again — to try and bank $2 billion in “savings” to the pension fund contribution. It’s just like the “savings” proposed in February. See, if you call it “savings,” that sounds so much better than the short-funding that was done in the past. The effect is the same — more unfunded liability — but you can spin it to the willfully gullible. ==

It’s a bit more than that. Aside from another attempt to bank fictitious savings, it’s also some cover to try to sneak smaller pension changes / diminishments through the GA while we are all distracted by the big attack.

We all need to keep a wary eye out for various “nose of the camel under the tent” provisions tacked onto needed bills; just another variation on the Rauner “poison pill” attempts on the union.

== Jessica: Madiar is obviously the guy to talk to about constitutionality of this, but there is case law that suggests this is constitutional. See Peters v. City of Spfld. (http://cgfa.ilga.gov/Upload/2008%20JANUARY%20Handbook%20of%20Illinois%20Pension%20Case%20Law.pdf). Court ruled that future salary increases are not constitutionally protected. The problem is it doesn’t save much and if you make the option for them to move to really unattractive, no one will take it. So it’s not an alternative to a tax increase to be able to amortize the debt. But if it’s enough face saving to let republicans vote for a tax increase, do this! ==

Jessica,

To split hairs (which the law does), the court ruled future increases are not protected. But my memory, without re-reading it, is that pension benefits do have to accrue for any future raises that do occur.

In other words, Rauner can not give raises, but if he does give raises, they have to be counted in the pension calculation. Rauner wants the raises to not count towards the pension unless you take a reduced pension. Not quite the same thing as Peters.

== What does Rauner do about TRS then? Since he (kind of) cannot control what a district pays teachers. ==

My assumption is he plans a “starve the beast” approach even though he is for more school spending. If the State were to transfer the “normal cost” of the pensions to the local districts at the same time the State caps property taxes, the money to pay the pensions would have to come from somewhere. At that point, the only obvious choice for the school district would be to cut out raises and lower their salary costs, either by firing some teaching staff or trying to impose salary cuts on all teaching staff. Such a move, if logically analyzed, might also drive more local school district consolidations in order to achieve an economy of scale and eliminate some duplication of management overhead … but I’m not going to hold my breath knowing the psychological investment small towns have in their schools / sports teams.

* And my favorite

Anybody else reminded of the Verizon commercial that takes the satellite providers to task for offering the same old deal in new language?

- Posted by Rich Miller        

98 Comments
  1. - Mama - Tuesday, Oct 20, 15 @ 9:54 am:

    Thanks RNUG.


  2. - Sangamo Sam - Tuesday, Oct 20, 15 @ 10:04 am:

    Another great analysis. Thanks.


  3. - ChiTownSeven - Tuesday, Oct 20, 15 @ 10:05 am:

    With all due respect to RNUG. . . . His analysis is based on the pretty big assumption that a bundle of pension benefits simply may not be revised going forward. The courts might someday opine on this question, but at this point it is still very much an open issue. Theoretically, the GA could modify the Pension Code to say, for instance, “Current Tier 1s keep everything they’ve earned by way of pension benefits, but going forward, any salary increase will not count toward their pension unless they FILL IN THE BLANK.” The point of the matter is this: except as provided in a CBA, no employee has a right to a raise. So to get a raise, a current Tier I might be asked to concede something in return. Now, how this works out for union workers is another matter altogether. . . . if Rauner wants to make this stick with respect to union employees, he’s going to have to modify collective bargaining laws, and good luck with that.


  4. - JS Mill - Tuesday, Oct 20, 15 @ 10:09 am:

    I think RNUG’s A,B, and C options are exactly what will ultimately happen. I think that and his “starve the beast” concept. There is already a bill filed for cost shift (HB 4272) which calls for 100% cost shift versus the gradual shift talked about in the past. This along with a tax freeze would impact even the wealthy suburban districts. The majority of downstate districts have been cutting staff and limiting pay increase for the better part of 5 years now.

    Spot on analysis by RNUG as usual.


  5. - WhoKnew - Tuesday, Oct 20, 15 @ 10:10 am:

    RNUG - Thanks for elevating the conversation!


  6. - Pelonski - Tuesday, Oct 20, 15 @ 10:10 am:

    ChiTownSeven, the courts have opined on that issue. some people just don’t want to acknowledge it.


  7. - ihpsdm - Tuesday, Oct 20, 15 @ 10:10 am:

    Great summary RNUG.

    The negotiations between the State and AFSCME have more to do with potential layoffs than insurance premiums. The State is fighting to remove language related to layoffs and bumping rights in order to get rid of everyone making over 60,000/year.

    This cuts the payroll AND gets rid of a lot of Tier 1 employees. New employees would be rolled in to Tier 2 and have a lower salary to boot.

    If they won’t budge from this stance, what is the point of agreeing to a contract, regardless of a wage freeze and an increase in insurance premiums?


  8. - RNUG - Tuesday, Oct 20, 15 @ 10:13 am:

    == His analysis is based on the pretty big assumption that a bundle of pension benefits simply may not be revised going forward. ==

    It’s actually based on the courts so far maintaining the pension contract at time of hiring plus enhancements granted by the legislature may not be diminished. The pension formula says years of service times Final Average Compensation. It doesn’t say FAC except for the years we say raises don’t count.

    Until the courts say otherwise, we have to take them at their word about the no diminishment.


  9. - Reality Check - Tuesday, Oct 20, 15 @ 10:13 am:

    To the headline: Here of all places, where we deal in facts not spin, can we avoid using the phony, euphemistic word “reform” when the meaning is plainly “cut”?


  10. - Stones - Tuesday, Oct 20, 15 @ 10:17 am:

    Seems to me that it would take a constitutional amendment to change pension benefits going forward. The Supreme Court was pretty clear in ruling on the matter.


  11. - Lincoln Lad - Tuesday, Oct 20, 15 @ 10:20 am:

    Can we get on with some sort of reform based on ‘consideration’? Completely voluntary, not nearly as impactful as the Speaker and Gov both want, but at least delivering some element of savings? Save what you can and forget that we wasted years pursuing something that was never going to be deemed constitutional.


  12. - jeffinginchicago - Tuesday, Oct 20, 15 @ 10:21 am:

    There is no way out but significant tax increases. This is because mathematically challenged politicians did not understand how compounding interest works for them and against them. Not making the pension payments was always a horrible idea and not understanding how pensions would be affected by pay increases was even worse. It was like there was never and actuarial accountant working for the people of Illinois. If this were a private corporation there would be bankruptcy and pensions would be limited to $65k a year maximum. It is the State of Illinois bankruptcy is not an option so you need an additional $3-4k per resident in taxes. Good luck everyone


  13. - @MisterJayEm - Tuesday, Oct 20, 15 @ 10:24 am:

    Pension reform schemes repeat themselves — first as tragedy, then as farce.

    – MrJM


  14. - Cassandra - Tuesday, Oct 20, 15 @ 10:26 am:

    If it saves a lot of money, the proposed “reform” will be unconstitutional, because the govt will have to cut benefits. If it’s constitutional, it won’t save enough to bother. Seems pretty clear.
    The rest is theater. Bipartisan theater. Pat Quinn put on his pension reform play and now it’s time for Rauner to put on his show. The results will be the same, but there can be months if not years of politically advantageous pretending.


  15. - relocated - Tuesday, Oct 20, 15 @ 10:27 am:

    Is Rauner so desperate for a symbolic win that he would try to try to enact a package thats DOA when it hits the courts? He buys maybe a year but ultimately no change.


  16. - VanillaMan - Tuesday, Oct 20, 15 @ 10:27 am:

    Thank you!


  17. - Frenchie Mendoza - Tuesday, Oct 20, 15 @ 10:28 am:

    There has to be a value attached to these failed pension reform attempts. At some point — and maybe we’ve already passed it — the expense of failed reform will eclipse the savings of actual reform.

    Actually, this might be a calculation that’s increasingly appropriate for Rauner’s entire tenure thus far.


  18. - chi - Tuesday, Oct 20, 15 @ 10:30 am:

    One way to lessen the burden would be to offer lump-sum payments that are less than the present value of a pension.

    E.g., if a fund can expect to pay $500,000 over 20 years in lifetime pension benefits to someone, and that $500,000 has a present value of $100,000, then the fund can offer the employee $90,000 (for example) in a lump sum payment. This reduces the fund’s liability, and would be something people may want if they a) are in immediate financial need or b) are of the “I’d do better on my own/the state’s going to hell in a handbasket” mindset. And since it’s purely voluntary, it would meet constitutional muster. To be seen whether enough would take the option/it would save enough.


  19. - Skeptic - Tuesday, Oct 20, 15 @ 10:31 am:

    Stones: As RNUG already pointed out, even a Constitutional amendment would not affect those who are already in the system.


  20. - Robert the Bruce - Tuesday, Oct 20, 15 @ 10:32 am:

    RNUG, amazing analysis as always.

    One question for you: would it be legal for the state offer retirees the option of taking a lump sum check today at 80% of the value of their pension?


  21. - Six Degrees of Separation - Tuesday, Oct 20, 15 @ 10:32 am:

    There are several “buckets” that are constantly being filled and emptied.

    The first bucket is the retirees who pass away, thus ending the state’s pension obligation or at least cutting it in half to their surviving spouse. Every day that passes, this bucket continues to be filled with Tier 1 employees, helping the state’s liability position.

    The second bucket is the employees who retire, changing from a contributor to a receiver of benefits. Although this bucket is bad for the state’s liability as it fills up with Tier 1 employees, there are a finite number of future Tier 1 retirees upstream, and someday this bucket will start to decline as the number coming into bucket 2 is exceeded by those leaving for bucket 1.

    The third bucket is the Tier 2 employees who are still working and are a net plus for the state, contributing more than they will draw out even when they go to bucket 2.

    So 2 out of 3 positive trends for the state’s pension even with the huge unfunded liability, and every year that goes by, the less any “reform”, even if it could be enacted, would affect the balance of obligations.


  22. - Ducky LaMoore - Tuesday, Oct 20, 15 @ 10:33 am:

    ===might also drive more local school district consolidations===

    If you remember, Rauner’s school plan actually called for the forced consolidation of rural districts. Maybe pension reform will be the vehicle to drive that ill-conceived plan.


  23. - Wordslinger - Tuesday, Oct 20, 15 @ 10:34 am:

    Geez, now the Monte Hall strategy.

    “Would you trade your constitutionally protected pension for what’s in the box Jay has on his table? Or, if I could direct you to Caroll Merrill, what’s behind Door Number 3?”


  24. - Rich Miller - Tuesday, Oct 20, 15 @ 10:34 am:

    ===a) are in immediate financial need or b)===

    Or c) They are not married and have no dependents.


  25. - Team Sleep - Tuesday, Oct 20, 15 @ 10:35 am:

    RNUG - first and foremost, I hope your mother-in-law is feeling better. I wish you and your family the best.

    Second - in my humble, lowly opinion, Stones is right. It seems to me that the current State Supreme Court will not budge, and the conceptual “consideration” bill from 2013 is likely dead. It will take a full-fledged amendment to the IL Constitution for any real changes to happen. And, for those who would pooh-pooh the idea, I would guess that a passive of the remap referendum would be a key into whether Rauner and his pals could get it done.

    I will add a caveat. I do think that any such movement would have to EXCLUDE teachers, police and fire/EMT personnel if it were to pass. Otherwise it would go down in flames.


  26. - 3rd Party Needed - Tuesday, Oct 20, 15 @ 10:36 am:

    Thanks RNUG! Great insight!

    The one part that I can’t figure out is why Eric Madiar thinks this plan may be constitutional. I have read all of his pension papers and they seem to frame future benefits as locked in on the date of hire.

    I have viewed him as a reliable source of information on pension rights, and his stance on this does worry me.

    I have almost given hope of a movement to refinance the debt pay what is owed (ala Martire)and wonder if the ILSC mandating payments will be the ONLY way forward.


  27. - ihpsdm - Tuesday, Oct 20, 15 @ 10:36 am:

    The lump sum option was l done by Blago back in 2003. Some people did take it in lieu of defined benefits and the agreement that they could never work for the State again.

    I know one woman who took a lump sum of 15,000 after working for the State for 15 years. The next time I saw her she was a waitress and told me that she very much regretted that decision.


  28. - Joe M - Tuesday, Oct 20, 15 @ 10:36 am:

    I imagine if “starve the beast” were to be applied to teachers and TRS - it would also maybe be applied to state university employees and SURS. The state universities are already starving. So starving them any more could put them in the ER, if not the funeral home.


  29. - nixit71 - Tuesday, Oct 20, 15 @ 10:39 am:

    By shorting pension payments over the decades, the Legislature effectively masked the true cost of the benefits being offered, which are not cheap to begin with. Then those pricey benefits that weren’t paid for become even more expensive, exasperating the problem.

    So the only way to manage pension costs going forward is via employment status. But labor laws don’t really give the state much leeway in that regard. You would think Tier 1 employees at all ages would be quite vulnerable (through no fault of their own), and that would be the first logical place any manager would target. But it’s not that simple. So the state can’t do what it needs to do to manage costs and, even if they could, dedicated employees feel the pain.

    The big question is, can the state convince a generation or two that did not consume these past services to not only pay for them but also receive diminished services in return? Because regardless of the path moving forward, you’re going to need more buyers, not just higher prices. And the state hasn’t been attracting more buyers lately.


  30. - ihpsdm - Tuesday, Oct 20, 15 @ 10:43 am:

    ===a) are in immediate financial need or b)===

    Or c) They are not married and have no dependents

    I never got married and have 0 dependents but would not accept a lump sum. Say they offered 250,000 to someone who potentially would get 30,000/year in a defined benefit plan? It wouldn’t take long to eclipse that 250,000, even when taking in to account the present value/future value of either option.

    The only ones who would take are those with terminal cancer or those who do not expect to live very long after retirement. That, or shortsighted baby boomers.


  31. - Six Degrees of Separation - Tuesday, Oct 20, 15 @ 10:45 am:

    The lump sum option was l done by Blago back in 2003. Some people did take it in lieu of defined benefits and the agreement that they could never work for the State again.

    From what I understand, they received more than what they had put in to that point, something like 2x what they had in, without interest. But it was a net savings for the state. It was limited to 400 or 500 people and only certain job classifications, which quota I don’t think was filled when the program closed. One person I knew took it, got lucrative job in the private sector, rolled it into his 401k somehow and was a good financial decision.


  32. - 3rd Party Needed - Tuesday, Oct 20, 15 @ 10:47 am:

    “The only ones who would take are those with terminal cancer or those who do not expect to live very long after retirement. That, or shortsighted baby boomers.”

    I suspect there would be a lot more in the last category than you might think. Financial literacy is not a strong suit for many people, and instant gratification is powerful!


  33. - Joe M - Tuesday, Oct 20, 15 @ 10:47 am:

    Team Sleep

    Its already been pointed out at least a couple of times in this tread: “As RNUG already pointed out, even a Constitutional amendment would not affect those who are already in the system.”


  34. - fool - Tuesday, Oct 20, 15 @ 10:48 am:

    I work for the state as a non union worker and haven’t had a salary increase in 11 years, so I could care less about his plan. So could a few hundred other state employees who don’t belong to a union.


  35. - Team Sleep - Tuesday, Oct 20, 15 @ 10:49 am:

    Someone retorted earlier that it was almost as if the state didn’t have anyone doing the actuarial work when these issues were arising. I’m starting to wonder that as well.

    Actuarial data is pretty strong and often irrefutable. If someone had screamed “TAP THE BREAKS” years ago, perhaps these ramps, COLAs and buyouts would’ve never happened.

    Then again, knowing how this business is also means that it’s entirely plausible that the players knew the consequences, did the deeds anyway and look back with a “meh” attitude.


  36. - ChiTownSeven - Tuesday, Oct 20, 15 @ 10:53 am:

    Pelonski and others: If my memory serves, while there has been some dicta from the courts that some might construe as meaning that “benefits” NEVER may be revised going forward, no Illinois court has ruled on that question outright. in other words, no court has been asked whether, on a purely prospective basis, the “pension contract” may be revised in return for consideration. Please correct me if I am wrong — and please cite the case.


  37. - Team Sleep - Tuesday, Oct 20, 15 @ 10:53 am:

    RNUG - do you think a constitutional amendment could be drafted to be retroactive?!

    I know that comment will cause a lot of consternation, but that is something that has always rumbled around my noggin.


  38. - Team Sleep - Tuesday, Oct 20, 15 @ 10:54 am:

    ChiTown - I see that you partially beat me to my next question.


  39. - 3rd Party Needed - Tuesday, Oct 20, 15 @ 10:56 am:

    I think the actuarial work is often ignored. For example TRS hires Buck Consultants out of Chicago to perform an actuarial valuation to determine what the actuarialy required contribution from the state would be. The state then ignores that calculation and funds at a lower level. My understanding is that this short funding is about as old as TRS itself.


  40. - nixit71 - Tuesday, Oct 20, 15 @ 10:57 am:

    @Team Sleep - The actuaries are coming under a lot of scrutiny lately as well.

    Check out this presentation from Jeremy Gold, one of the industry’s prominent actuaries in the pension field. Pretty damining remarks: http://techtv.mit.edu/collections/cfp2015/videos/32739-speaker-jeremy-gold-jeremy-gold-pensions


  41. - GA Watcher - Tuesday, Oct 20, 15 @ 10:57 am:

    Those who question why he thinks a “consideration reform” may be constitutional, let’s not forget that Eric Madiar wrote his pension reform memo well before the Supreme Court ruled this past spring. AS RNUG points out, that decision leaves the State and local governments with three things that can be done on pensions: 1) restructure the debt; 2) shift the normal costs onto local school districts; and 3) raise revenues to pay off the debt.


  42. - Stones - Tuesday, Oct 20, 15 @ 11:01 am:

    @Team Sleep 10:53

    I don’t believe so. That would seem to fit the definition of an Ex post facto law.


  43. - Tone - Tuesday, Oct 20, 15 @ 11:06 am:

    1) restructure the debt; 2) shift the normal costs onto local school districts;

    These two must be done before we even consider

    3) raise revenues to pay off the deb


  44. - Skeptic - Tuesday, Oct 20, 15 @ 11:06 am:

    ChiTownSeven: In fact the ILSC unambiguously answered that question.

    “We held in that case that the clause means precisely what it says: “if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired.”


  45. - titan - Tuesday, Oct 20, 15 @ 11:13 am:

    @Stones 11:01

    Technically, Ex Post Facto only relates to criminal laws. The same basic concept is frequently applied to other areas of law under the Due Process category


  46. - Norseman - Tuesday, Oct 20, 15 @ 11:15 am:

    RNUG, my best wishes for your mother-in-law and your family. Stressful time.


  47. - anonlurker - Tuesday, Oct 20, 15 @ 11:16 am:

    Team Sleep - this is a post from yesterday, with which RNUG agreed ( briefly ref above acknowledge to Old)

    - Old and In the Way - Monday, Oct 19, 15 @ 5:28 pm:

    - Langhorne - Monday, Oct 19, 15 @ 5:02 pm:

    rauner has a “constitutional fix”. do this by statute, it sure seems like impairment or diminishment. by constitutional amendment, almost anything would be constitutional, just extremely difficult to enact.

    The Constitutional Route does nothing to those already in the system. Only those going forward. The US Constitution bars states from enacting retroactive laws as well as diminishing contracts. Good luck changing the US Constitution!


  48. - Skeptic - Tuesday, Oct 20, 15 @ 11:16 am:

    As I recall on the retroactive/ex post facto front, the issue was the US Constitution and contract law that made that impossible.


  49. - Skeptic - Tuesday, Oct 20, 15 @ 11:18 am:

    But seriously, I think the May 8 ILSC decision can be summarized in two words without loss of any detail. They are “Pay up.”


  50. - RNUG - Tuesday, Oct 20, 15 @ 11:19 am:

    ==One question for you: would it be legal for the state offer retirees the option of taking a lump sum check today at 80% of the value of their pension?==

    Other than the specific level, that kind of option is already available in some systems but you have to quit your job. You can always do that and take your own contributions as a lump sum, which IMO would be the height of financial stupidity … but you can do it. And don’t forget the possible tax implications if you do the transfer improperly.

    What we’re talking about in your question is a voluntary alternative that gives more than contributions but less than the projected present value of the pension. Still probably not a good move for most people but some will take it … and the financial planners / insurance companies / investment houses will love it for the commissions they will reap selling products like annuities to the limp sum takers. The only question I see about that kind of offer is where does the State come up with the hard cash to pay the lump sum.


  51. - Anonymous - Tuesday, Oct 20, 15 @ 11:23 am:

    ==no court has been asked whether, on a purely prospective basis, the “pension contract” may be revised in return for consideration. Please correct me if I am wrong — and please cite the case. ==

    ChiTown, as RNUG stated, “But anyone who spends any time researching contract modification by consideration will find it has to be totally voluntary.” - with voluntary being the key word. What Rauner is talking about in his consideration approach is coercion and extortion.


  52. - RNUG - Tuesday, Oct 20, 15 @ 11:23 am:

    ==do you think a constitutional amendment could be drafted to be retroactive?!==

    I don’t think it could be. But even if you did manage it on the pensions, you would run straight into US Contract Law that would also seem to prevent modification of an existing contract.


  53. - some doofus - Tuesday, Oct 20, 15 @ 11:25 am:

    There’s also the old fashioned way to hold the line on pensions - hold the line on salary increases, particularly for the highest grade employees with most time in system.

    The state could easily change the incentives provided to districts to do the opposite.

    It’s interesting that Cook County just gave a big raise to virtually all high level employees, who almost by definition are nearing retirement. Whether that’s a good idea or bad, I find it interesting that it received almost no media attention. Ultimately, the biggest determinant of the pension debt is the last 4 years of salary. Keep those numbers lower than predicted over the next 10 years and you’ve completely changed the picture.

    Who is keeping track of that number - average pension basis at time of retirment, by year?


  54. - A Jack - Tuesday, Oct 20, 15 @ 11:28 am:

    Restructuring the debt seems like a reasonable course in today’s low interest environment. Unfortunately, the politicians have been concentrating on the constitutionally invalid actions of eliminating the debt, rather than restructuring the debt.

    The state’s contribution rate is currently 45.598% due to its previous missed payments being ramped up. Much of that is interest on not paying the debt in a lump sum at once. Any state employee who has bought military time can see the difference between purchasing the service credit in a lump sum or over installments. The state went the installment approach and it’s expensive.

    Surely a financial wizard like Rauner should be able to legally get that debt restructured, borrow it at a lower rate than the current 6.5% the state is paying for installments, and lump sum the payment to the pension funds unless he isn’t as smart as he claims.


  55. - RNUG - Tuesday, Oct 20, 15 @ 11:32 am:

    == on a purely prospective basis, the “pension contract” may be revised in return for consideration. ==

    Sure, as long as it is voluntary.

    The way contracts get involuntarily modified on a regular basis are on findings of fraud or bankruptcy.

    Bankruptcy is not allowed for States and, In Illinois, not for municipalities without permission of the State.

    As far as fraud, it would be nigh impossible to make that argument since the Pension Clause itself was approved by the voters, and yes, I know it was part of a bunch of a “take it or leave” bundle but it was a public process. Same for the subsequent enhancements granted; all done by elected representatives.


  56. - nona - Tuesday, Oct 20, 15 @ 11:36 am:

    Rauner has repeatedly asserted that state employees (not counting his hires) are overpaid. Consequently, the notion that he will ever give supposedly overpaid workers raises is not very credible.


  57. - RNUG - Tuesday, Oct 20, 15 @ 11:36 am:

    One point a lot of people seem to be skipping past when talking about the possibility of changing benefits. Go back and read the Kanerva decision. Then the court piled on top of Kanerva with their subsequent decision on SB-1. They were crystal clear, or at least they thought they were.

    It’s the same court today. They won’t view another challenge to their clear rulings in a favorable light.


  58. - ChiTownSeven - Tuesday, Oct 20, 15 @ 11:38 am:

    Skeptic — The passage you quote from the ISCT doesn’t answer the question as to whether the “pension contract” can be revised going forward. The quote is: “if something is a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired.” But that quote, while nice, doesn’t provide a contractual analysis. In other words, it doesn’t clarify whether or not an item is indeed a “benefit” of a “contractual relationship.” For instances, in an employment setting, all the terms of future employment are subject to revision. In other words, my current wages/benefits are in no way permanently writ in stone. The 3 questions that have not been asked of and answered by the courts is this:

    (1) Are Tier 1 employees absolutely entitled to the terms of the pension code that were in place on the date of hire for as long as they work in the public sector, whether they’ve worked for 1 year, 5 years, 10 years, and 20 years?

    (2) If prospective positive revisions to the Pension Code apply to employees, without regard to the date of hire, why don’t prospective negative revisions also apply?

    (3) If you want the rule to be that that positive revisions may apply prospectively but not negative revisions, how do you square that rule with the contractual principles imbeded in the term “contractual relationship,” including the fundamental principle that contracts must entail reciprocity.


  59. - Six Degrees of Separation - Tuesday, Oct 20, 15 @ 11:39 am:

    RNUG and others,

    This is a description of the pension buyout that was offered under the Blago administration in 2006.

    Illinois Public Act 94-0839 allows state employees to receive an Alternative Retirement Cancellation Payment (ARCP)
    consisting of a lump sum payment of their contributions with regular interest, times two. Five hundred Group 1 employees,
    those in executive branch agencies under the governor, are eligible (the first 500 to apply before August 31, 2006). Group 2
    – all employees of legislative and constitutional officers, including the courts, and all legislative agency employees — are all
    eligible, and must apply before September 30, 2006. All applicants must have been hired before January 1, 2006, be on
    payroll on June 1, 2006, and must terminate employment within one month of application or by the terminal date for their
    group to apply. Anyone who returns to covered employment for more than 75 days a year must repay the amount by which
    the ARCP exceeded the employee’s original contributions, within 60 days of re-employment.


  60. - RNUG - Tuesday, Oct 20, 15 @ 11:40 am:

    == So starving them any more could put them in the ER, if not the funeral home. ==

    Maybe that’s the goal … so they can be bought up and privatized.


  61. - RNUG - Tuesday, Oct 20, 15 @ 11:43 am:

    == Someone retorted earlier that it was almost as if the state didn’t have anyone doing the actuarial work when these issues were arising. I’m starting to wonder that as well. ==

    I’m sure any actuarial work (invalidly) assumed the State would make the actuarially determined payments every year so the earnings estimates would hold. Don’t make the proper payments, you don’t get the expected earnings. so things aren’t funded as expected.


  62. - Robert the Bruce - Tuesday, Oct 20, 15 @ 11:45 am:

    ==Sure, as long as it is voluntary.==

    Does it need to be something retirees voluntarily agree to? Or could current state employees “volunteer” retirees for a pension cut, by voting themselves a larger pay raise, while agreeing that everyone takes a pension cut?

    This certainly doesn’t seem to me to be fair…but was wondering if it would be considered legal?


  63. - RNUG - Tuesday, Oct 20, 15 @ 11:47 am:

    - Six Degrees of Separation -

    And that kind of offer is a good deal if you are just going to be in State government for a few years. Perfect golden (well, maybe silver) parachute for political hacks and resume padders on their way out the revolving door.


  64. - RNUG - Tuesday, Oct 20, 15 @ 11:50 am:

    == Does it need to be something retirees voluntarily agree to? Or could current state employees “volunteer” retirees for a pension cut, by voting themselves a larger pay raise, while agreeing that everyone takes a pension cut? ==

    The courts have made it clear retirees are locked in, period, end of discussion.

    About the only thing the unions can, maybe, do to the retirees is mess up some of the health care stuff, like dependent premiums, co-pays, etc. but even there the Kanerva ruling left open the door for the retirees to sue over excessive changes.


  65. - RNUG - Tuesday, Oct 20, 15 @ 11:53 am:

    Have to run; probably won’t be back until during the game tonight


  66. - ihpsdm - Tuesday, Oct 20, 15 @ 12:06 pm:

    Thanks RNUG. Great information as always.


  67. - Team Sleep - Tuesday, Oct 20, 15 @ 12:11 pm:

    Thanks for all the back-and-forth, RNUG. Good luck today with your family.

    I did note the phrase “excessive changes” in the 11:50 post. Here is where I think the argument that making retirees pay some healthcare premiums isn’t “excessive”. In the context of Medicare premiums, it’s worth noting that Medicare premiums for Parts B & D total anywhere from $125 a month to well over $200 month for seniors who take plenty of medications and need higher-level Part D coverage. Medicare A & B - and Advantage - plans all have deductibles. Nearly every Part D plan has a deductible. So the cost for people on Medicare can be substantial depending on the level of need. Oh - and unless you have an Advantage plan you have NO eye or dental coverage if you have standard Medicare coverage.

    https://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html


  68. - Arizona Bob - Tuesday, Oct 20, 15 @ 12:19 pm:

    RNUG, thanks so much for your analysis. Your posts are the only ones I trust on this blog.

    One structural problem that exacerbated this pension mess was separating the employer and employee from considering this as part of the overall compensation package and not providing disincentives for “spiking” pensions with things like accrued sick and vacation days and end of career salary spiking. Have a third party (the State) having pension obligations without salary, benefit and “spiking” authority was a terribly dysfunctional system from the get-go. It truly was having the employees in TRS and SURS “having their cake and eating it too”. This obviously has to stop as any form of pension reform. The only question is how is this most painlessly accomplished for the students and taxpayers.

    When pension costs, benefits and salaries are all taken “from the same bucket”, it will necessarily result in some pay freezes (hopefully everything over $75K for the rank and file in new contracts), higher employee contributions to benefits like healthcare, and changes in “spiking” for unfair pension enhancement. I don’t know if employee contributions can be increased, but if so, they need to be.

    Things in Illinois public education compensation will need to change. Schools will no longer be able to afford to pay $120K for 176 work days to teachers at age 43 as they do in Orland HS district 230. They won’t be able to shoulder the burden of paying 83-95% of the family health insurance premiums as they have been either, or giving high ranking administrators 45 days of vacation every year when their jobs demand they can take no more than 15.

    Of course, to avoid complete chaos, Springfield will need to prohibit teacher strikes using the same penalties as there are in Texas, loss of individual certification. This is perhaps the most important “labor reform” Rauner can push,a nd I’m sure he could get the public support to do it. Madigan will have a tough sell telling the taxpayers why its in the public interest that the teacher unions can hold their kids hostage and drive up their taxes with strikes.

    The money is clearly there in K-12 education in Illinois from state, Federal and local sources to accomplish this shift, seeing that Illinois already spends 17.8% per pupil above the national average with very “average” student outcomes. Illinois will still be overspending that much after cost shifting, it’s just that less will wind up in employees pockets and more will stay in taxpayers pockets due to less pressure on state revenue tax increases.

    I always thought that a property tax freeze was a bad idea, but PTELL should be modified to adjust for enrollment changes. For example, what used to be my high school district has seen their enrollment plummet from about 9,000 to under 7500 over the last few years, yet their rates increased by the rate of inflation plus new construction coming on the tax rolls. This should have been indexed to reduce overall tax revenues roughly in proportion to the enrollment drop. Conversely, districts with rapidly growing enrollment should be able to increase revenues proportionately higher than PTELL limits.


  69. - walker - Tuesday, Oct 20, 15 @ 12:28 pm:

    The governmental risk with Rauner’s statement is that it might become the PR basis for another fake “balanced” budget. They could well know it is unattainable and illegal, and not care. Would they get away with it two years in a row?


  70. - Anotherretiree - Tuesday, Oct 20, 15 @ 12:30 pm:

    - ChiTownSeven -
    1 - RUNG believes they have said that you are locked in at hire

    2 - The Constitution says no diminishment. You can enhance all you want. I paid off my mortgage early. The State changed my 2016 retirement date to 2011 (I’m sorry the people you hired(elected) made bad decisions on your behalf). They could’ve changed it back to 2016 I believe.


  71. - Oswego Willy - Tuesday, Oct 20, 15 @ 12:33 pm:

    ===RNUG, thanks so much for your analysis. Your posts are the only ones I trust on this blog.===

    Noted - Arizona Bob -, duly noted, sir.

    To the Post,

    Once again - RNUG - brings clarity wher other may want things clouded or confused.

    Thanks to Rich for putting up Post(s) like this, allowing many like myself learn only once what is true and what is possible in many areas of politics and governing. It’s what makes this place shine brighter than any other place covering Illinois.


  72. - CrazyHorse - Tuesday, Oct 20, 15 @ 12:39 pm:

    A few options:

    1) In regards to OT. It obviously has to be included but, just like raises, it’s not guaranteed. From a purely financial standpoint the state would be smart to hire a bunch of new people (Tier 2)at the agencies where OT is abnormally high) to eliminate the need for said OT. Of course you’d be replacing experience with youth (but much more affordable youth).

    A lot of questions : Can they afford to hire? What are the training costs? etc. I wish I had the answers to these but it would seem like a reasonable way to cut the OT, and thus the pensions legally.

    2) Rule of 75: If they proposed allowing people to retire early if they were willing to forfeit some of their COLAs, I would think this would pass constitutional muster. For example if you could currently retire at 55 under rule of 85, you would be able to retire at 50 under a rule of 75 but you wouldn’t receive a COLA until you turned 55, 60, or some arbitrary number. Obviously the math would dictate whether it makes sense but I’d have to think retiring early would be considered a benefit. They gave you something of real value. I personally wouldn’t do it but I think a bunch of people would jump at the opportunity. That would essentially give Rauner his Raises don’t count scheme and cut down on the future value of some Tier 1 pensions.

    Life expectancy guys and number crunchers would obviously have to do the math to see if it makes sense but I’m pretty sure that would be constitutional as long as standing pat is also an option for the employee.

    Just a thought.


  73. - Liberty - Tuesday, Oct 20, 15 @ 12:46 pm:

    Kanerva V Weems ruling on insurance implies the court would rule the state would have to include any future raises under the pension rules when the employee was hired. So the state would be left without the swap and denying raises forever as the only option.


  74. - Formerly Known As... - Tuesday, Oct 20, 15 @ 12:46 pm:

    The Supremes sent a clear message in their last ruling. As RNUG suggests, they may clarify if necessary the next time around.

    Pay your pension obligations.


  75. - Juvenal - Tuesday, Oct 20, 15 @ 12:50 pm:

    RNUG -

    You left out a very simple solution to the pension problem.

    Start reversing three decades of privatization of state services.

    Place all of those nonprofit providers within the state system, have their employees enter as Tier II employees, and those folks will begin to pay down the pension deficit much more quickly.

    Other than that, I think the only thing you left out was lowering the targeted funding level from 100%. I think if we had an actual workable plan to get to 80%, lenders would be thrilled.

    Great analysis, rapier responses, hope your family is alright.


  76. - Name/Nickname/Anon - Tuesday, Oct 20, 15 @ 1:13 pm:

    I still believe that if the constitution is amended to remove the pension clause, that future pension accruals could be reduced (retirees can’t be touched and can’t change what someone has earned). I realize RNUG doesn’t agree and I think it would be challenged via contract law, but I’m not certain the challenge would prevail.


  77. - Archimedes - Tuesday, Oct 20, 15 @ 1:20 pm:

    Those that advocate for changing the pension benefits on a prospective basis; other than the legal (contract law) and constitutional issues, the other problem is that it does nothing to reduce the unfunded liability.

    The unfunded liability is the present value of the unfunded already earned benefits. If you change benefits going forward, you only impact the annual cost (the normal cost) of pensions. Of the $7 billion annual pension bill, the normal cost is about $1.6 billion - or about 22% of the cost.


  78. - Skeptic - Tuesday, Oct 20, 15 @ 1:39 pm:

    Name/Nick/Anon: ILSC addressed that. What counts is what the employee got when they walked in one the first day Plus any any enhancments since then. “Future accruals” are irrelevant.


  79. - Tone - Tuesday, Oct 20, 15 @ 2:08 pm:

    Most of Illinois is a rather dull and ugly place. Higher and higher taxes will only push people out of state faster.


  80. - Wordslinger - Tuesday, Oct 20, 15 @ 2:11 pm:

    Tone, perhaps you shouldn’t look in the mirror so long.


  81. - Demoralized - Tuesday, Oct 20, 15 @ 2:31 pm:

    Tone:

    Do you even live in Illinois? If not then take your troll self and go away.


  82. - Sangamo Sam - Tuesday, Oct 20, 15 @ 2:34 pm:

    Better informed minds have looked at this issue for years. The Supremes have spoken. Like so many other issues, I think this speaks to the stubbornness of this Governor.


  83. - blue dog dem - Tuesday, Oct 20, 15 @ 2:36 pm:

    RnUG’s commentary(editorial) solidifies my opinion that the only short term solution is to raise income taxes back to 5%. This is certainly stopgap. There is not one actuarial analysis that will factor in stagnet or declining populylation basis or increases in life expectancy.herein lies the problem,are we going to keep raising taxes every five years or so?


  84. - Tone - Tuesday, Oct 20, 15 @ 2:50 pm:

    I live in Chicago.


  85. - Joe M - Tuesday, Oct 20, 15 @ 2:51 pm:

    ==Most of Illinois is a rather dull and ugly place. Higher and higher taxes will only push people out of state faster.==

    Minnesota raised taxes - 9.85% for incomes over $154,950, and that state did not see a big exodus, and quite the opposite, seems to be doing quite well. And what about Iowa’s 8.98$ for incomes over $69,255? And Wisconsin’s 7.65% for incomes over $244,270? According to your theory, nobody would still be living in those states because of their tax rates. But those states are doing much better than Illinois.


  86. - Arizona Bob - Tuesday, Oct 20, 15 @ 3:18 pm:

    Joe M, there’s one HUGE difference between Minnesota, Iowa, Wisconsin and Illinois. In those states, taxpayers generally get more bang for their taxpayer buck, and they don’t have NEAR the corruption and government waste issues you see in Illinois. For example, although those in Wisconsin pay more for schools, the number of teachers making over $100K is far less than in Illinois. In Minnesota, when you pay more for taxes, you have far more confidence than you can in Illinois that money will be well spent in the public interest. Please also note that those states have a far lower rate of those in the poverty “entitlement” culture. They also have faith that their government will spend the money prudently, a faith few Illinoisans would share.

    You’re right, Joe. It isn’t JUST about tax rates.

    It’s about the way the Illinois government rips off taxpayers for their personal and political gain that causes people like me to become Illinois ex-pats.


  87. - RNUG - Tuesday, Oct 20, 15 @ 3:31 pm:

    == 2) Rule of 75 ==

    -Crazy Horse-, good suggestion for coordinated SERS members and one that appears to pass constitutional muster. Will probably need a bit of tweaking for both non-coordinated members and the other systems with different rules.

    Only thing I’m not sure of is how much cost savings, if any, it would result for the State. The retirees would be drawing 10 years longer, just not with an AAI the first x years. And they would mostly start out at a lower level due to less years and a lower FAC. However, you would lose the 10 years of additional employee contributions; it’s a small amount but not insignificant when invested over the life of the pension.

    The best parts of the proposal are it pretty much stops the accrual of additional pension obligation / debt for that person and it moves some of the presumably higher paid “Tier 1″ people out the door about a decade early.

    Given the current levels of abuse being heaped on state employees, I could see a bunch of SERS employees taking a hard look at it. Be interesting to see how many would bite.


  88. - Demoralized - Tuesday, Oct 20, 15 @ 3:33 pm:

    ==I live in Chicago.==

    Don’t extrapolate your Chicago experience with the rest of the state.

    Also, if you hate the state that bad then leave. I encourage everyone to do what makes them happy. Some of you seem to be constantly unhappy. It isn’t worth it.


  89. - Facts are Stubborn Things - Tuesday, Oct 20, 15 @ 3:40 pm:

    The proposals have changed in that those already retired are no longer being targeted. Tier 1 does not get near enough press….huge huge legal change in pension benefits. Make the payments and let tier 2 work its magic.


  90. - Facts are Stubborn Things - Tuesday, Oct 20, 15 @ 3:41 pm:

    should have typed tier 2 does not get near enough credit.


  91. - RNUG - Tuesday, Oct 20, 15 @ 3:43 pm:

    == I did note the phrase “excessive changes” in the 11:50 post. ==

    -Team Sleep-, not sure what the IL SC would consider excessive but I’m sure they already have an unexpressed opinion about it. Given the limited time of oral arguments, there was a fair amount of back and forth on that subject in Kanerva. If you haven’t, find the video and watch it. The justices did seem to be concerned about an attempted end run to make the retiree pay the equivalent of the “free” premium.

    FWIW, the State has already pulled an end run of sorts on retirees with their forced Medicare Advantage enrollment. Just ask any 65+ state retiree. Higher co-pays and deductibles compared to original Medicare with a normal State health insurance program as secondary. Given that most Medicare members are in that same boat, it would be hard to argue about the state retirees being reduced from close to platinum to somewhere in the gold range. But if Rayner gets his supposed wish to push all state employees / retirees down to brass or tin plans, I can see a valid case for the retirees to ask the court to revisit Kanerva.


  92. - RNUG - Tuesday, Oct 20, 15 @ 3:46 pm:

    == Start reversing three decades of privatization of state services. ==

    - Juvenal -, yes, more people paying in to “Tier 2″ will improve things.

    But then where would “campaign contributions” come from? … (only partially /s)


  93. - RNUG - Tuesday, Oct 20, 15 @ 4:03 pm:

    This really is a red letter day. First Rich highlights my posts from yesterday, then I get a compliment from - Arizona Bob - and now I’m going to agree some with him.

    Maybe I’ve been around politics too long and have become too cynical, but this is how I see it.

    I do agree about the level of corruption FOR THE SERVICE RECEIVED. That is key. I think most Illinois citizens, and especially Chicago ones, expect a certain level of political corruption. A little bit of it can be the grease that makes the system work. As long as it is fairly low AND as long as the EXPECTED SERVICES ARE RECEIVED, the citizens are willing to tolerate it. There have been Chicago mayoral races lost because they failed to understand that services MUST be delivered.

    As far as the level of welfare support, it’s nothing new. Illinois is a state that believes in helping the less fortunate. Illinois has always provided better welfare benefits than the surrounding states. I remember sitting in one meeting many, many years ago at Public Aid and joking about installing self-service kiosk’s on the various bridges so people could sign up as they entered the state. Made perfect sense to me.

    The problem is Illinois doesn’t always want to pay for those programs.

    PS: Thanks to everyone for their well wishes and prayers. Mother-in-law seems to be doing a bit better today but we’ll find out for sure at the Drs appointment tomorrow.


  94. - JS Mill - Tuesday, Oct 20, 15 @ 4:07 pm:

    @RNUG- Of course there are those pesky concerns about Tier 2 meeting the IRS requirements and the potential problems that could come from that. A discussion for another day though.


  95. - Beaner - Tuesday, Oct 20, 15 @ 4:09 pm:

    Reality Check - Tuesday, Oct 20, 15 @ 10:13 am:

    Words matter. We need to stop parroting Rauner’s twisted words which are meant to mislead and replace ‘Reform’ with “Unconstitutional Dimishment or Financial Fraud” so we are clear about what we are speaking.


  96. - Fund the Pensions - Tuesday, Oct 20, 15 @ 4:37 pm:

    Chitownsteven: “Theoretically, the GA could modify the Pension Code to say, for instance, “Current Tier 1s keep everything they’ve earned by way of pension benefits, but going forward, any salary increase will not count toward their pension unless they FILL IN THE BLANK.”

    The ISC addressed this very issue in paragraph 46 in their May decision.

    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. See
    Di Falco v. Board of Trustees of the Firemen’s Pension Fund of the
    Wood Dale Fire Protection District No. One
    ,
    122 Ill. 2d 22, 26 (1988). 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.

    It doesn’t get much more clear. Contractual rights begin on their first day of employment.


  97. - RNUG - Tuesday, Oct 20, 15 @ 4:53 pm:

    - Fund the Pensions -

    I agree it should be crystal clear. But Rauner comes out of the corporate raider branch of the private sector where they pay lawyers to find ways around the law, regardless of the morality or legality. He’s still buying into the widely discredited Sidley Austin opinion that benefits not yet earned can be changed.

    Rauner just doesn’t seem to get that the court has spoken consistently on this topic; there is no way around the Pension Clause.


  98. - nixit71 - Tuesday, Oct 20, 15 @ 9:46 pm:

    ==Minnesota raised taxes - 9.85% for incomes over $154,950, and that state did not see a big exodus, and quite the opposite, seems to be doing quite well. And what about Iowa’s 8.98$ for incomes over $69,255? And Wisconsin’s 7.65% for incomes over $244,270?==

    All those state tax retirement income. Illinois does not.


Sorry, comments for this post are now closed.


* Reader comments closed for Thanksgiving
* Campaign miscellaneous
* Question of the day
* Rauner's appointees kept Illinois in Crosscheck
* Illinois Policy Institute's lobbying arm got $2.5 million last year from group that bankrolled Merrick Garland fight
* There's more to Springfield than horseshoes
* Pritzker unveils opioid plan
* *** UPDATED x1 - Mendoza responds *** Rauner admin: "There can be no assurance that a budget will be enacted in future fiscal years"
* New Proft TV ad claims Durkin and Madigan "like Illinois state government just as it is"
* Rauner: "Illinois is at the edge of disaster"
* Shimkus won't endorse in gubernatorial primary
* Pritzker is taking a page from Rauner's 2014 campaign (in a good way)
* Biss wants more tax return details
* *** UPDATED x5 - Pritzker, ILGOP, Pritzker, Rauner, ILGOP respond *** Pritzker clarifies tax stance after Crain's interview
* Sen. Murphy endorses Silverstein challenger
* State GOP again demands that Durbin and Duckworth give away their Franken money
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

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

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

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


Loading


* WILL: In Illinois, a looming battle over the ba.....
* JB Pritzker: Experience solving problems and th.....
* Illinois GOP continues wait for Pritzker's tax .....


* Judge orders woman back to prison for daughter's death
* Illinois fire marshal offers safety tips for Thanksgiving
* Man charged in theft of guns from Chicago train yard
* Man wrongfully convicted seeks certificate of innocence
* Chicago airports expect nearly 2 million holiday travelers
* 4 children, 2 adults killed in rural northern Illinois fire
* The Latest: Victims of rural Illinois fire identified
* French company wins world rights to Purdue-affiliated apple
* Chicago renews legal fund for immigrants facing deportation
* Family of man slain in traffic stop sues Rockford

* House task force to review sexual harassment
* Electric cars, better fuel efficiency spell doom for Illinois gas tax
* Springfield wants out of legislation limiting payments for 5G antennas
* Fact check: Are Gov. Rauner's grandparents immigrants?
* Londrigan accused of attacking Davis for 'opposite' of remarks
* Gov. Rauner signs sex harassment legislation
* Under the Dome Podcast: Governor's race, sexual harassment, Rodney Davis
* Macoupin Co. highway renamed in honor of soldier who died in Vietnam
* Schoenburg: Rep. Davis leads new caucus, pleased with White House access
* Fact check: Speaker Madigan says ethics commission was functioning

* Uber concealed cyberattack that exposed 57 million people's data
* How Cook County finally got a new budget
* Would you pay $20 for a nap?
* The best events to kick off the holidays
* House tax bill is littered with loopholes for Wall Street's wealthiest


* Police warn of violent robberies near Grant Park
* More acceptance/use of social media afield: Illinois deer hunting
* ‘The Man Who Invented Christmas’ brings welcome holiday cheer
* Police: Woman found shot to death in West Pullman
* Police search for elderly woman with dementia missing from Blue Island
* Columbia College Chicago students robbed at skate park in South Loop
* Former Gage Park charter school teacher charged with sexual abuse
* Woman carjacked, robbed at gunpoint in Bucktown
* Man shot in East Side
* Boy, 16, charged after stolen gun found in SUV in Aurora


* U.S. Navy plane with 11 people aboard crashes into Pacific Ocean; 8 found alive
* Columbia College students robbed in fifth Grant Park incident in two weeks
* 1 killed, 3 wounded in city shootings
* UN court convicts Gen. Ratko Mladic of genocide over Bosnia's horrors
* Stay-at-home mom resents babysitting requests
* Chicago cop faces discipline for insensitive, threatening posts on Facebook
* Morning Spin: Emanuel calls New York vs. Chicago transit 'a tale of two cities'
* Row house on Chicago’s north side: $850,000
* LINDA C. BLACK HOROSCOPES for 11/22/17
* Juveniles arrested in connection with 20-day carjacking spree


» Third-Party Candidates Want Rules Eased To Get On Ballot
» Third Party Candidates Want Rules Eased To Get On Ballot
» How Chicago’s New Budget Could Affect You In 2018 — And Beyond
» How A Chicago Cop Sentenced To Prison Could Affect The Jason Van Dyke Trial
» Illinois Lawmaker's Plan To Combat Opioid Abuse With Cannabis
» Black Lives Matter Takes On Hunger With New Food Box
» State Week: Are Voters Thinking About 2018?
» WATCH-LISTEN: State Budget Forum - Edwardsville
» Legislative Checklist: Veto Session
» How 3 Women Want To Make Illinois’ Political Future Female


* Byron York: Six scenarios for GOP disaster in Roy Moore Senate race
* E.J. Dionne: A fight more pressing than Democratic squabbling
* Our View: Don’t forget to ‘shop small’ this holiday season
* Catherine Rampell: The GOP readies itself to welcome Roy Moore
* Thanksgiving Beef: Your guide to a safe carving of political conversation in 2017
* Marc A. Thiessen: Trump should make sure Roy Moore drops out
* House task force to review sexual harassment
* Rex Huppke: Moment of reckoning for swinish behavior is here
* George Will: In Illinois, a looming battle over the bankrupting 'blue model'
* Bernard Schoenburg: Ives says Rauner joined 'ruling class' he was to fight


* Deere reports 4Q earnings of $510 million
* Childress named U.S. attorney
* Stuff the Bus drive set for next week
* Area Calendar 11/22/17
* Setting it right 11/22/17
* Rick's Six: Chilly start, crash closes I-80, stolen vehicles, and road work
* I-80 closed at Annawan, Illinois
* When exercise benefits go beyond fitness
* Holiday travel season off to fast start
* Who's in the news? Peter Wemhoff


* Dawn Patrol: Outcry over McDonald's plans to tear down Des Plaines replica
* Man who attacked estranged wife on street gets jail, probation
* Even 2 decades later, the 1997 Apple Cup still resonates
* How Schaumburg, developer hope to keep Motorola redevelopment from affecting schools
* China's CEFC denies links to alleged Africa bribery plot

* Panel encourages women to consider careers...
* DOJ to ban US lawmakers should Duterte ord...
* Geneva Chamber honors Gaines for 40 years ...
* US lawmakers to Duterte: 'Sovereignty does...
* Local Congressmen React to the Passage of ...
* Hultgren and Ruppersberger: Protect infras...
* Hultgren whishes McHenry County College a ...
* This RSS feed URL is deprecated
* Rep. Randy Hultgren congratulates McHenry ...
* 3 suburban GOP reps provide crucial votes ...

* This RSS feed URL is deprecated...

* This RSS feed URL is deprecated...

* Cook County Board passes 2018 budget that will lay off 321 employees, and other Chicago news
* The Beachwood Radio Sports Hour #176: Broken Bears; Cubs' Seven-Year Itch
* Trump FCC Opens Corporate Media Merger Floodgates
* FCC Wraps New Gift For Sinclair
* Safely Stuffing Family Starts With Safely Stuffing Birds
* ‘Give it back! as ridiculous a command from GOPers as ‘Lock her up!’
* The unbearable lightness of Justice League
* Tony at the Red Line Tap. The divine right of guys.
* Illinois’ teacher shortage and pension theft.
* The [Friday] Papers


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

  
* Google Allows YouTube to Return to Amazon's Echo Show Smart Speaker
* Sony Xperia XA2 may have been benchmarked with Android 8.0 and Snapdragon 630 SoC
* BlackBerry KEYone sequel inches closer to release with benchmark ‘confirming’ 6GB RAM
* This may (or may not) be our first ‘spot-on’ look at the back of the Galaxy S9
* OnePlus 5T band support does not equal Sprint or Verizon compatibility
* Swappa expands into Home Tech with Echos, Sonos, Nest products
* Motorola Black Friday runs from Moto Z2 Play through to Moto E4 Plus

* Climb machine: Eloy working way up to MLB
* First year of White Sox rebuild closing with 40-man maneuvering
* White Sox add five to 40-man roster, remove two
* Sox add top prospect Jimenez to 40-man
* Thome joins Hall hopefuls in 1st time on ballot
* Podcast: The calm before the storm
* New Prolight 59Fifty Spring Training caps are in


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

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

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

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




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