Capitol Fax.com - Your Illinois News Radar » Today’s number: $6.88 billion
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Today’s number: $6.88 billion

Monday, Oct 31, 2016

* Shaw Media

The Teachers’ Retirement System of the State of Illinois announced Friday it had given preliminary approval to a contribution request for $4.56 billion to its pension fund.

The changes in state law made last year for determining actuaries’ estimates for adequately funding pensions have greatly increased the amount of contributions statewide.

The Teacher’s Retirement System said of the projected $4.56 billion contribution, just $974 million is needed to pay the cost of pensions for that year. The remaining $3.5 billion is to go toward the amount owed from previous years.

“Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

While next year’s contribution to the teachers’ pensions is an eye-popping figure, it is far short of the actuaries’ ceiling. Using the new accounting standards, the state’s annual contribution should be $6.88 billion to catch up with its unfunded liability.

- Posted by Rich Miller        

30 Comments
  1. - Bothanspied - Monday, Oct 31, 16 @ 10:19 am:

    where is that 4.56B contribution going to come from?


  2. - RNUG - Monday, Oct 31, 16 @ 10:31 am:

    == where is that 4.56B contribution going to come from? ==

    Primarily GRF …


  3. - allknowingmasterofracoondom - Monday, Oct 31, 16 @ 10:51 am:

    And we keep electing the same people to office who oversee our spending.

    WE deserve this.


  4. - Last Bull Moose - Monday, Oct 31, 16 @ 10:52 am:

    In the pension discussion, the focus is on State workers, but I think that teachers are the bulk of the pension costs.Better to take money from a faceless bureaucrat than your first grade teacher.


  5. - yeah - Monday, Oct 31, 16 @ 10:55 am:

    But, but …we were told if only we legalized casinos, we’d never have to worry about School funding again? Were they fibbing to us 25 years ago?


  6. - Blue dog dem - Monday, Oct 31, 16 @ 11:06 am:

    Yeah. Silly you. Didnt you mean the lottery?


  7. - JS Mill - Monday, Oct 31, 16 @ 11:25 am:

    =But, but …we were told if only we legalized casinos, we’d never have to worry about School funding again? Were they fibbing to us 25 years ago?=

    The next time a politician talks about a new funding source just ask them if they know the difference between supplement and supplant.

    The lottery is an early example of supplant.


  8. - City Zen - Monday, Oct 31, 16 @ 11:40 am:

    “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    Makes it sound like all we needed back then was an “Easy” button.


  9. - RNUG - Monday, Oct 31, 16 @ 11:46 am:

    == In the pension discussion, the focus is on State workers, but I think that teachers are the bulk of the pension costs.Better to take money from a faceless bureaucrat than your first grade teacher.==

    Yes, they are.

    TRS alone is by far the biggest, SURS (more teachers) is next, closely followed by SERS (what most people think of as State employees), then GARS (that is just about a rounding error), and finally JRS (that is so small by comparison it isn’t even a rounding error).


  10. - Federalist - Monday, Oct 31, 16 @ 12:05 pm:

    “Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    The money was spent on “other priorities” for the last 40+ years. Tthus this mess today.


  11. - titan - Monday, Oct 31, 16 @ 12:25 pm:

    +++ “Most of the fiscal year 2018 contribution is a self-inflicted wound,” TRS Executive Director Dick Ingram said. “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.” +++

    And thus, most of the problem would not be fixed by amending the Constitution or eliminating pensions for future hires. Most of the problem is, in effect, irresponsible past stealth borrowing.


  12. - Ron - Monday, Oct 31, 16 @ 1:30 pm:

    Sounds like a default is in our future.


  13. - Anonymous - Monday, Oct 31, 16 @ 1:30 pm:

    ==The Teacher’s Retirement System said of the projected $4.56 billion contribution, just $974 million is needed to pay the cost of pensions for that year. ==

    People who look at the $100+ billion unfunded pension liability and say “defined benefit plans are not sustainable” should look at these numbers and and realize that the truth is that “Running up a credit card bill is not sustainable.” The normal costs of staying current with the pension are only a tiny portion of the mess. And, as others have noted, the majority of the mess is for downstate teachers, not for executive branch employees. University employees are another big chunk of it.


  14. - JS Mill - Monday, Oct 31, 16 @ 2:24 pm:

    =Sounds like a default is in our future.=

    No Ron, it sounds like your taxes are going up.

    Thank you for your contribution!


  15. - JS Mill - Monday, Oct 31, 16 @ 2:25 pm:

    = And, as others have noted, the majority of the mess is for downstate teachers=

    Uh, no.

    Suburban teachers out number those considered “downstate” and all of them outside of CPS (whose pension is suffering the same issues) are in TRS.


  16. - Anonymous - Monday, Oct 31, 16 @ 2:32 pm:

    The credit card company has said no more late/minimal payments. You now owe X. Pay up. What we owe the workers who have done the work and contributed toward their pensions (and now are due them) may be painful but not their creation. We all need to pay rather than be deadbeats like the state.


  17. - Shemp - Monday, Oct 31, 16 @ 2:41 pm:

    “That money could be spent on other priorities today if the state of Illinois had fully met its obligations in the past.”

    That’ s because the collective “we” chose other priorities in the past.


  18. - CapnCrunch - Monday, Oct 31, 16 @ 4:37 pm:

    “No Ron, it sounds like your taxes are going up.
    Thank you for your contribution!”

    It could get exciting when the boys and girls in Springfield tell us they are raising our taxes to pay for pension benefits and not for new services.


  19. - Anonymous - Monday, Oct 31, 16 @ 5:10 pm:

    Capn

    Are you suggesting the state stiff workers out of their already paid (by them) retirement income?


  20. - JS Mill - Monday, Oct 31, 16 @ 5:26 pm:

    @Capn- “exciting” is an understatement.

    What I am interested to find out is if anyone will propose an increase and who or whom that might be.

    I suggest Rock Paper Scissors to decide.


  21. - Back to Reality - Monday, Oct 31, 16 @ 5:52 pm:

    @Capn

    ==It could get exciting when the boys and girls in Springfield tell us they are raising our taxes to pay for pension benefits and not for new services.==

    The statement you predict will certainly happen, even though it is inaccurate and deceptive(as usual).

    The truth is the boys and girls in Springfield will be raising our taxes to pay for past debt they created, and not for new services.

    I wouldn’t expect the truth from a politician when it is so much easier for them to blame the “usual suspects”.


  22. - CapnCrunch - Monday, Oct 31, 16 @ 7:00 pm:

    “The truth is the boys and girls in Springfield will be raising our taxes to pay for past debt they created, and not for new services.”

    You can say a tax increase is needed to pay back debt or even pay for chopped liver but the reality is that it is needed to guarantee future pension benefits.


  23. - Anonymous - Monday, Oct 31, 16 @ 7:54 pm:

    Um, hello. The debt is the debt to pension funds for all that wasn’t put into them and the interest accrued on that debt. Please keep up.


  24. - Back to Reality - Monday, Oct 31, 16 @ 9:00 pm:

    @Capn,

    Are you trying to imply that we only need to pay our debts if we borrow money from certain people?

    I guess I’m confused. I always thought that money was fungible. Opportunity costs of not paying into pension funds when due (and spending the money on other things) include the fact that we still owe the debt and may have to forgo other choices in the future to pay it.

    The GA is not paying to “guarantee” future payments, they are paying back a portion of the money (remuneration plus interest) already earned by and owed to teachers that was never paid.

    That money was supposed to be deposited in the pension fund. Instead, it was “borrowed” and spent on other things. It is still owed.

    T.R.S. presently pays pensions, not the General Assembly. No “guarantee” of pension payments by the state ever requires a payment to the pension fund, only payment to pensioners.

    That so called “guarantee” only goes into effect if T.R.S. becomes insolvent.

    Since T.R.S. presently has more than 40 Billion dollars in assets, (and pays out about 4.5 billion in pension payments per year), I think they are not likely to become insolvent soon.


  25. - City Zen - Monday, Oct 31, 16 @ 9:46 pm:

    ==What we owe the workers who have done the work and contributed toward their pensions (and now are due them) may be painful but not their creation. ==

    ==That money was supposed to be deposited in the pension fund. Instead, it was “borrowed” and spent on other things. ==

    Like employee salaries, raises, health benefits, promotions, job openings, pension spikes. This list goes on and on. All funded with money that wouldn’t have been there if we made those pension contributions.

    Even TRS qualifies. Could a school district have afforded that 4% COLA raise in a contract if the state had to cut 30% of its funding to that district to make pension payments? Maybe that raise would’ve been 2%. Or no pension pick-up. Or more expensive health benefits. Pick and chose a career’s worth of salary adjustments downward.

    The pension debt is owed. The courts say as such. That doesn’t mean you have to blind to the game.


  26. - JS Mill - Tuesday, Nov 1, 16 @ 8:30 am:

    =Could a school district have afforded that 4% COLA raise in a contract if the state had to cut 30% of its funding to that district to make pension payments? Maybe that raise would’ve been 2%. Or no pension pick-up. Or more expensive health benefits. Pick and chose a career’s worth of salary adjustments downward.=

    Your example/supposition is poor. The costs of funding the pensions properly for the past 90 plus years would have been minimal in comparison to the current debt. We now have to pay a bill that includes decades of penalties and added interest.


  27. - City Zen - Tuesday, Nov 1, 16 @ 9:03 am:

    ==Your example/supposition is poor.==

    Actually, it’s spot on. If we didn’t have the money to pay the full ARC all these years, where would it have come from? Exactly where I stated. And those suggested full ARC payments weren’t really “full” because it used extremely high interest rate assumptions, as the recent accounting rule changes for pensions have shown.


  28. - Back from Reality - Tuesday, Nov 1, 16 @ 9:39 am:

    @Cityzen

    Your scenario only works if state revenue is the only money available to pay salary and benefits. In many districts State revenue does not affect much because that contribution to the school budget small to begin with.

    The answer to your question is yes. They could and did afford it.


  29. - City Zen - Tuesday, Nov 1, 16 @ 12:21 pm:

    =Your scenario only works if state revenue is the only money available to pay salary and benefits. In many districts State revenue does not affect much because that contribution to the school budget small to begin with. In many districts State revenue does not affect much because that contribution to the school budget small to begin with.==

    I never said it was the only component. Your assumption is when state funding goes down, property taxes goes up. There is no rule it has to happen that way, and certainly not decade after decade.

    Your argument is basically that absolutely zero would have changed about someone’s compensation over 3 decades with less revenue for operating expenses (salaries). Seems highly unlikely.


  30. - Back from Reality - Tuesday, Nov 1, 16 @ 12:58 pm:

    @Cityzen

    I do not mean to give the impression that I think that zero would change in compensation. I do believe you overstate the impact of these hypothetical cuts in state funding.

    You may not say it, but the reductions in salary and benefits you forecast as an outcome of paying pension contributions on time only happen if funding reductions actually impact the school budget.

    Many schools do not receive much funding from the state. They are not dependent on the state as a primary revenue source.

    If local tax levies already carry the burden of funding those salaries and benefits, and federal funds are unaffected, no reduction of the budget has actually occurred. Local levies would stay the same.

    A cut in revenue never given to you in the first place doesn’t affect you. I think you may overestimate how much of the cost of local schools state revenue pays for.

    I respectfully disagree with your assertion that salary and benefits would automatically be reduced because state funding paid pension costs. I think more would have to happen.


Sorry, comments for this post are now closed.


* Comptroller: State racked up "two decades worth of late payment interest penalties in just over two years"
* Madigan says he hasn't made up his mind on legalizing marijuana
* Illinois Legislators: Make Health Coverage Fair by Supporting HB 4146
* Rauner's new website slams Pritzker-Madigan "corruption"
* Today's must-listen: Madigan and lone chairmanship "No" vote together on Joravsky's show
* *** LIVE *** Session coverage
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

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

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

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

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

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

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

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


Loading


* Madigan re-elected Chairman of Illinois Democra.....
* Madigan says he hasn't made up his mind on lega.....
* Madigan says he hasn't made up his mind on lega.....
* APNewsBreak: Illinois' late fees skyrocket over.....
* Lawmakers urge Governor to take action for Quin.....
* Today's must-listen: Madigan and lone chairmans.....
* Rauner, Pritzker messages lost in excessive cam.....
* Chicago Tribune: Madigan gets another term as I.....
* RPT-Illinois' vendor lifeline at risk as intere.....
* Deadline Near to Enter Illinois Bicentennial Co.....


* Car theft solved too late to prevent Waffle House tragedy
* Deadline near to submit Illinois bicentennial coin design
* Lawmakers want Quincy Legionnaires' report by Friday
* Waffle House slaying suspect arrested after massive manhunt
* The Latest: 4 homicide charges in Waffle House shooting
* Correction: Campus Free Speech-Lawsuit story
* Judge asked to reject pipeline protester's evidence request
* Illinois AG files harassment lawsuit against bus company
* APNewsBreak: Illinois' late fees skyrocket over past 3 years
* The Latest: Shooting suspect made claims about Taylor Swift

* Illinois Lottery sells tickets for instant games after top prizes are gone
* Michael Madigan wins re-election as Democratic Party leader
* Champaign-area bus company faces harassment lawsuit
* Illinois' late fees skyrocket over past 3 years
* State paying bills, but not late-payment interest
* Legislators push Rauner for Quincy veterans home improvement plan
* Michael Madigan expected to win re-election as Democratic Party leader
* Statehouse bills would increase drivers' awareness of bike safety
* Proposal would let more voters try to cut property taxes
* Government consolidation efforts gain traction in General Assembly

* Prince heirs sue Walgreens, Illinois hospital over musician's death
* Google takes aim at Illinois privacy law
* United CEO gave up his bonus last year
* Northwestern Memorial improves Leapfrog patient safety grade


* Jimmy Butler back in a Bulls uniform someday? Not as far-fetched as it sounds
* Trump VA pick Jackson dogged by questions about qualifications
* Trump warns Iran of ‘bigger problems’ if it restarts nuke program
* Toronto van driver charged with 10 counts of murder
* Stores warned about selling Juul e-cigarettes to kids
* Nursing mom sues over lactation space at Daley Center
* February home prices soar 6.3 percent
* Blackhawks end-of-season prospect review: Dylan Sikura and college hockey
* Young giraffe makes a break for it at Fort Wayne zoo
* Amazon will now deliver to your car


* LINDA C. BLACK HOROSCOPES for 4/24/18
* Toronto van driver charged with 10 counts of first-degree murder
* Trump praises strength of U.S. alliance with France ahead of talks with Macron on Iran, Syria
* Chicagoans get “B” grade when it comes to identifying local landmarks, new survey shows
* Customers mourn loss of Edens Plaza Carson's; local governments express optimism despite possible tax loss
* Fox News host Sean Hannity's real estate holdings draw scrutiny
* The Chicago Afrobeat Project is back to cutting loose
* Motive elusive after van driver kills 10 on Toronto sidewalk
* A step-by-step guide to how Kanye West became a hero of the pro-Trump Internet
* #MeToo: A timeline of events


» April 20, 2018 - Full Show
» Madigan Elected For 6th Term As Democratic Party Chairman
» Illinois Case Argues Bullet Analysis Is ‘Basically A Guess’
» Mayor Rahm Emanuel Unveils Anti-Sexual Harassment With The Help Of A 'Friend' (Hint: David Schwimmer)
» Mayor Rahm Emanuel Unveils Anti-Sexual Harassment Campaign With The Help Of A 'Friend' (Hint: David Schwimmer)
» Student Walkouts; Science And Business At Argonne; Back Pay For State Employees; Illinois Politics
» Illinois Legislators Have History Of Bringing Babies To Work
» How Parents Balance Privacy And Safety For Kids Online
» CPS Plays Matchmaker To Link Teachers With High-Need Schools
» Measure To Expand Online Sales Tax In Illinois Faces Hurdles


* Guest View: A nation at risk
* Illinois Lottery sells tickets for instant games after top prizes are gone
* Michael Madigan wins re-election as Democratic Party leader
* Champaign-area bus company faces harassment lawsuit
* E.J. Dionne: Where are the conservatives we need?
* Illinois' late fees skyrocket over past 3 years
* State paying bills, but not late-payment interest
* Legislators push Rauner for Quincy veterans home improvement plan
* Michael Madigan expected to win re-election as Democratic Party leader
* George Will: Gorsuch strikes blow against administrative state


* Bost used $91,000 in taxpayer-funded postage in 2017 — tops among Illinois reps
* U.S. Rep. Mike Bost, free franked mail in 2017
* Leitschuh helps Illinois College relay break school record
* Three charged after allegedly trying to steal car in Belleville, leading police on chase
* OTHS wins own freshmen boys track invite
* Traffic alert in Clinton: 19th Avenue North
* Market St. reopens after semi rollover, clean-up
* Phelps Finnie-sponsored bill that would change tax rules for oil and gas producers moves out of committee
* New path for pedaling
* District 118 to consider new dress code


* U-46 board member who made controversial flag comments resigns
* What today's homebuyers are looking for
* Feder: B96 'Smackdown' hits Showbiz Shelly at Kiss FM
* Amazon begins delivery to your car
* NRA supporters are blowing up Yeti coolers. Yeti says it's all a big mistake.

* Democrats aim to turn Obamacare into asset...
* Bustos pushes to make 'blue wave' happen i...
* Lamar Smith visited Galápagos, where warmi...
* Desis for Progress is holding Second Annua...
* GOP keeps up hope amid challenge in key Ca...
* This RSS feed URL is deprecated
* Rep. Randy Hultgren recognizes Loyola men'...
* US Rep. Randy Hultgren visits McHenry's Pi...
* Are Illinois Congressmen safe in wake of D...
* It's official: If you prepaid your propert...

* A tough re-election climate tests the chum......
* Senators Cling to a Fading Custom Trump's ......
* Sen. Durbin warns educators of risks of fo......
* County official: Anti-poverty services wou......
* Booker, Durbin, Krishnamoorthi Introduce H......

* The Senate celebrates Sen. Tammy Duckworth......
* Editorial: Up to the task...
* I'm a legislator and a mom. Tammy Duckwort......
* Tammy Duckworth is uniquely privileged, bu......
* Tammy Duckworth makes fertility after 50 l......

* No lunch plans today? Vanguard Awards Luncheon starts at 11:30 at the Standard Club
* What a sad story that occurred over the weekend in Chatham
* Five classic films by Latin American women
* Record Store Day 2018: here's what Chicago area shops are doing to celebrate
* On winning wars and losing memories
* The Magic 8-Ball says ‘Outlook not so good’ on the gig poster of the week
* The film shorts program ‘I’m Not Sure What You Mean?’ spotlights queer coming-of-age experiences
* A new food website aims to help give minority women a seat at the table
* FilmStruck’s ‘Early Hitchcock’ shows the master of suspense mastering suspense
* Joe Rode wasn't a great artist, but he lived a great Chicago life


* IEMA Highlights Role of Volunteers in Disasters
* Governor Rauner activates State Emergency Operations Center in Springfield
* February Flooding Information
* IEMA Urges People to Prepare for Severe Weather
* Governor issues state disaster proclamation for flooding in Iroquois, Kankakee, Vermilion Counties

  
* Cancel your plans: Remake of Norwegian internet hit-show Skam airs in the US today
* NetSuite rapidly grows global footprint, adds new features and tools
* House bill would regulate bold commercial space missions — but not very closely
* Facebook finally reveals how it decides to delete posts
* HP teams with Jabil, Forecast 3D to expand Multi Jet Fusion presence
* Would you pay to use Google services? If so, how much? (Poll of the Week)
* LG K8 (2018) and K10 (2018) launch in Italy as K9 and K11

* South Side Sox Roster Ranking: Round 19
* South Side Sox Prospect Vote: Round 19
* After early work, elusive feat escapes Moncada
* Beck up from Triple-A as Gonzalez hits DL
* White Sox relish in runs revival to bust slump
* That was fun: White Sox defeat Mariners, 10-4
* White Sox Minor League Update: April 23, 2018


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

Archives
April 2018
March 2018
February 2018
January 2018
December 2017
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