Capitol Fax.com - Your Illinois News Radar » *** UPDATED x3 - Emanuel responds “Rauner Tax” - Rauner issues veto today *** Rauner expected to veto police and fire pension bill on Memorial Day
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*** UPDATED x3 - Emanuel responds “Rauner Tax” - Rauner issues veto today *** Rauner expected to veto police and fire pension bill on Memorial Day

Friday, May 27, 2016

* Remember this bill?

After 10 months of playing cat-and-mouse, Mayor Rahm Emanuel’s closest ally in Springfield has sent to Gov. Bruce Rauner legislation giving Chicago 15 more years to ramp up to a 90 percent funding level for police and fire pensions.

Illinois Senate President John Cullerton (D-Chicago) has been holding the bill — approved by the Illinois House and Senate last spring — amid concern that Rauner would veto the legislation to squeeze cash-strapped Chicago and strengthen his own hand in the budget stalemate over the governor’s demand for pro-business, anti-union reforms.

The delay has already been costly to Chicago taxpayers.

Two weeks ago, Emanuel used $220 million in “short-term bridge” financing to make a state-mandated payment to police and fire pension funds that’s higher than his tax-laden 2016 budget anticipated because the police and fire pension reform bill has not been signed into law.

The deadline for Gov. Rauner to sign that bill is Memorial Day.

* From a reader, with a few typos fixed…

Jason Barclay of Governor Rauner’s Office called. The Governor wants someone at the SOS’s Index Division to accommodate him in filing a vetoed bill on Monday (a state holiday). Jason said that the SOS has helped him with this before. When asked why he could not file the veto today, the Governor’s Office stated that his schedule would not accommodate it today.

The SOS reportedly agreed to accommodate the governor.

*** UPDATE 1 ***  He apparently decided to give that poor SOS employee a break and vetoed it today…

Today I veto Senate Bill 777. This bill continues the irresponsible practice of deferring funding decisions necessary to ensure pension fund solvency well into the future. The bill effectively makes Chicago taxpayers borrow from the pension funds at an additional cost of $18.6 billion. It’s a game politicians like to play with taxpayers’ dollars by delaying payments today and forcing future elected officials to deal with pension funding issues tomorrow. As all know by now, that practice led to our current pension woes across state and local pension systems. Chicago police retirees are rightfully opposed to the bill. Instead of doubling-down on our past mistakes, we must learn from them. In vetoing this bill, I stand with all Chicago taxpayers who will be saddled with higher future pension contributions if the bill were to become law.

The cost to Chicago’s taxpayers of kicking this can down the road is truly staggering. Actuaries estimate that between now and 2055, when the law would require these funds to achieve the 90% funded ratio, the total contributions to the Policemen’s Annuity and Benefit Fund of Chicago would increase by approximately $13 billion—an increase of 47.4% over contributions required under the current law. For the Firemen’s Annuity and Benefit Fund of Chicago, the total contributions would increase by approximately $5.6 billion, or 47.1% over the amounts under the current law. In other words, by deferring responsible funding decisions until 2021 and then extending the timeline for reaching responsible funding levels from 2040 to 2055, Chicago is borrowing against its taxpayers to the tune of $18.6 billion. This practice has to stop. If we continue, we’ve learned nothing from our past mistakes.

Irresponsible funding decisions have left us with state pension funds that are collectively underfunded to the tune of $111 billion. The poor fiscal health of these pension funds means we have to spend nearly 25 cents out of every dollar of the state budget on pensions, which significantly impairs our ability to provide vital services to those in need.

Irresponsible funding decisions have left teachers in Chicago with a drop in pension reserves from 100% funded as recently as 2001 to 51.8% funded today. On that trajectory, teachers can count on receiving only slightly more than 50 cents of every dollar owed to them in retirement – all because of a decade of pension holidays in which Chicago skipped the necessary contributions to the teachers’ pension fund.

Irresponsible funding decisions have left two of Chicago’s main employee pension funds near insolvency. The Municipal Employees’ Annuity and Benefit Fund of Chicago and the Laborers’ Annuity and Benefit Fund of Chicago, covering some 79,000 current and former Chicago workers, are projected to have zero balances as early as 2026 and 2029, respectively.

This is what happens when you fail to responsibly fund pension obligations.

And now, against this historic backdrop, Chicago wants to do it again, this time gambling with the pensions of its police officers and firefighters. SB 777 would permit Chicago to contribute to the two pension funds for its public safety workers far less than is actuarially required during fiscal years 2016 through 2020. Even worse, the bill would allow Chicago an additional 15 years to bring the funds to a responsible funding level of 90%, with the target year shifting from 2040 to 2055. Current and retired police officers and firefighters would have to wait until 2055 to know their pensions are secure. This is bad policy regardless of any fiscal impact, but doubly so when it comes with a price tag of $18.6 billion.

Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return Senate Bill 777, entitled “AN ACT concerning public employee benefits”, with the foregoing objections, vetoed in its entirety.

Sincerely,

Bruce Rauner

GOVERNOR

*** UPDATE 2 *** The mayor’s response…

Statement from Mayor Rahm Emanuel on the Rauner Tax

“With a stroke of his pen, Bruce Rauner just told every Chicago taxpayer to take a hike. Bruce Rauner ran for office promising to shake up Springfield, but all he’s doing is shaking down Chicago residents, forcing an unnecessary $300 million property tax increase on them and using them as pawns in his failed political agenda. And it is an unspeakable act of disrespect toward our men and women in uniform — and toward Chicago taxpayers — that the governor would veto a bill to protect taxpayers and police and fire pensions as we head into Memorial Day weekend. Decades from now, the Rauner Tax will be this governor’s legacy in Chicago. His veto is harmful to taxpayers, and like everything he does, it is contradictory to his own supposed policy positions. It’s no wonder no one can trust him.”

*** UPDATE 3 *** Supplemental Rauner response…

“This legislation forces Chicago to borrow against police and fire fighters’ pensions to the tune of $18.6 billion. Absent reforms, this will simply balloon liabilities and ultimately crush taxpayers, which even the Retired Chicago Police Association opposes. This is the same reckless policy that led the city of Chicago and the state of Illinois to financial crisis. Chicago needs wholesale structural reform to solve its problems — borrowing billions against taxpayers is not the solution.”

- Posted by Rich Miller        

32 Comments
  1. - Precinct Captain - Friday, May 27, 16 @ 10:57 am:

    The Governor is too busy today to sign a sheet of paper? What a crock


  2. - Anonymous - Friday, May 27, 16 @ 10:58 am:

    Don’t do it Jesse! Tell the Gov to play by the rules.


  3. - Annonin' - Friday, May 27, 16 @ 11:01 am:

    OK who looks sillier….BigBrain for bein’ too busy — not or the $uper$tar for tellin’ someone about asking SOS to open up?
    We vote superstar ’cause BigBrain already looks silly


  4. - RNUG - Friday, May 27, 16 @ 11:03 am:

    This bill, while just a bandage, was at least a step in the problem.

    Rauner vetoing it will be one more act of deliberate destruction .


  5. - RNUG - Friday, May 27, 16 @ 11:04 am:

    == The Governor is too busy today to sign a sheet of paper? ==

    Too busy spinning the non-budget …


  6. - Norseman - Friday, May 27, 16 @ 11:05 am:

    Let’s honor our service men by vetoing a bill. Classless act by Rauner.

    Too bad Sec. White didn’t tell Indiana to take a hike.


  7. - illinois manufacturer - Friday, May 27, 16 @ 11:06 am:

    Deliberate desruction. How much before it is in some way stopped?


  8. - Anonymous - Friday, May 27, 16 @ 11:07 am:

    That’s kinda what happens when our Governor’s taxpayer-paid lawyer operates out of Washington, D.C. “Those hillbillies in Springfield will just have to comply with my schedule.” –[Fake] Attorney Jason Barclay


  9. - Captain Illini - Friday, May 27, 16 @ 11:10 am:

    Okay, I think I’ve finally got it…Rauner is really a shadow agent of Mike Madigan and his assignment is bolstering the Dem party leading up to November…how else can you explain this strategy???


  10. - siriusly - Friday, May 27, 16 @ 11:14 am:

    because the manufactured crisis isn’t bad enough?


  11. - Name/Nickname/Anon - Friday, May 27, 16 @ 11:16 am:

    It makes political sense for Rauner, he will honor the commitment to the Police and Fire pension funds by vetoing a bill that would have shorted their contribution.

    Now how the City comes up with the money is another question. Gov will just push more blame to Chicago.


  12. - Homer J. Quinn - Friday, May 27, 16 @ 11:16 am:

    makin’ friends and influencin’ people.


  13. - Anon221 - Friday, May 27, 16 @ 11:27 am:

    If the GA decides to do an override vote, it will be interesting to see how the colors work out.


  14. - Anonymous - Friday, May 27, 16 @ 11:27 am:

    “When asked why he could not file the veto today, the Governor’s Office stated that his schedule would not accommodate it today.”

    So when 1.4% is going around the State saying that we are broke, 1.4% is going to force a State worker to go into the office on a holiday.

    So the State worker essentially gets minimum time and a half plus holiday pay because 1.4% is too busy to sign a piece of paper today.


  15. - Huh? - Friday, May 27, 16 @ 11:37 am:

    11:27 was me.

    I can just imagine how enthusiastic the police and fire departments will be when responding to calls from one of the 9 houses 1.4% owns.


  16. - Anonymous - Friday, May 27, 16 @ 11:39 am:

    So the state worker could drive to work Monday at 8:30 and be home by 10.

    Sounds like hell doesn’t it? Toughen up


  17. - Anon221 - Friday, May 27, 16 @ 11:47 am:

    And, seriously, HOW much time would it take TODAY for Rauner to pick up a pen and veto a bill he’s had since March? You think he’s not going to get questions on this TODAY now that the story’s out there? I know… I know…. “No questions!” ck.


  18. - RNUG - Friday, May 27, 16 @ 11:49 am:

    == So the state worker could drive to work Monday at 8:30 and be home by 10.

    Sounds like hell doesn’t it? Toughen up ==

    You missed the point. It wasn’t about the time. It was about yet another, albeit minor, waste of money that doesn’t need to happen.


  19. - One of Three Puppets - Friday, May 27, 16 @ 12:01 pm:

    It is also a matter of simple common courtesy. Just do your job during the normal work week and save taxpayer money while also sparing someone the unnecessary waste of time on a holiday weekend. Toughen up? How about not being a jerk.


  20. - Anonymous - Friday, May 27, 16 @ 12:13 pm:

    RNUG, what about all the lost money and time when state workers are posting online throughout the day.

    And I didn’t miss the point at all, it’s just not a big deal at all for someone to go in on Monday. Like I said, toughen up.


  21. - Nick Name - Friday, May 27, 16 @ 12:16 pm:

    “So the state worker could drive to work Monday at 8:30 and be home by 10.

    Sounds like hell doesn’t it? Toughen up”

    Well, it’s Memorial Day. And maybe the state worker in question had plans to visit relatives — in cemeteries. Maybe a wife or husband, or a father, or brother, or child, or a mother or grandparent. You know: place flowers, plant a flag, say a prayer or two and try to hold back tears as the worker in question recalls how much he or she misses the person lying under the sod.

    The utter indifference of Rauner and Raunerites to the lives and concerns of ordinary people is probably one of the most appalling things about you people. You are all sickening.


  22. - One of Three Puppets - Friday, May 27, 16 @ 12:18 pm:

    Anon-Funny but RNUG stands for Retired Non Union Guy…….

    When people waste money and they are not in your political sphere, horrible. But when your guy does it, A-OKAY.


  23. - Anon221 - Friday, May 27, 16 @ 12:19 pm:

    Let’s take the time factor out. By doing the veto on Memorial Day, Rauner hoped to bury the lede. Hopefully with the “sunlight” of the story break, that will not happen now. This bill is not a total solution, but it is a start. By vetoing it, Rauner does nothing but continue to add to the problem . He’s has almost 60 days to voice any concerns. Has he??? Or, is thus just another “change is hard” snipe.


  24. - Harry - Friday, May 27, 16 @ 12:30 pm:

    Or, just maybe, Rauner was waiting to see if a budget deal could come together before the 60-days had passed. As of yesterday he can see that ain’t gonna happen, so he decided to veto, and for whatever reason there’s a hitch and the action can’t take place today.

    BFD.

    Bigger problem is why he held this uncontroversial bill hostage. Did he think after everything that has gone down the past 1.5 years, MJM would cave in over this nothing-burger?


  25. - A guy - Friday, May 27, 16 @ 12:57 pm:

    Memorial Day is almost always a busy day in Springfield. You can blame that on a whacked Legislative schedule that has been in effect for quite some time. Legislators have lamented for years about graduations, confirmations, communions and weddings being missed. That’s even putting aside the true solemnity of Memorial Day itself. On this topic…it just is.


  26. - Rich Miller - Friday, May 27, 16 @ 1:08 pm:

    ===You can blame that on a whacked Legislative schedule ===

    Constitutional amendment approved by voters.


  27. - Anonymous - Friday, May 27, 16 @ 1:14 pm:

    @ 11:37 a.m. “I can just imagine how enthusiastic the police and fire departments will be when responding to calls from one of the 9 houses 1.4% owns.”

    Notice how the comment implies a threat. A not so rare insight into how cops think right here.


  28. - A guy - Friday, May 27, 16 @ 1:45 pm:

    ==Constitutional amendment approved by voters.===

    True enough, but the voters never required them to disagree up to the final bell. lol


  29. - Name/Nickname/Anon - Friday, May 27, 16 @ 1:47 pm:

    I don’t see any threat in that comment and it should be stated:

    This veto means the police and fire funds will get more money. I assume the police and fire funds were against the bill and possibly even lobbied for the veto.


  30. - Anonymous - Friday, May 27, 16 @ 2:04 pm:

    By vetoing the bill police and fire pensions get more money this year. But some ignorant poster will attempt to spin it other ways. Showing a real bias.


  31. - Freezeup - Friday, May 27, 16 @ 2:14 pm:

    @anon 1:14

    A not so rare insight… ???

    More of an insight to what you think police think. (Your Honor, I Object, the question calls for speculation, counsel can’t possibly know what is going on in the officers mind.)

    Ano I can assure you that it was neither, any cop or fireman would prefer the pension be funded asap.


  32. - Reaper - Monday, May 30, 16 @ 12:20 pm:

    There ultimately will be no defined benefit pensions in Illinois
    Or any state for that matter. They will be converted into 401ks.
    It only takes simple math and the 2016 GASB rules to realize
    that the rubicon has been crossed. All this whining about
    fairness and promises is useless. The numbers are the numbers and will get worse every year from now on.


Sorry, comments for this post are now closed.


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