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Cullerton to Rauner: Cut a deal with AFSCME before pension reform

Friday, Dec 9, 2016

* As we discussed earlier this week, Senate President Cullerton has told the governor it would be much easier to pass a pension reform bill if Rauner reached a contract agreement with AFSCME. Speaker Madigan also said this week he wants the AFSCME negotiations to be part of the working group talks. Cullerton explained his position to WTTW

So why isn’t that pension reform happening? Cullerton says the governor’s contract dispute with state public employee union AFSCME has poisoned the well, and that it’s the governor who’s holding up pension reform.

“He’s offered them no pay raises for four years, and to cut their healthcare by a third. How, on top of that, can we say ‘We’re going to cut your pensions too?’ He has an ability to negotiate that contract and help us pass a pension reform bill. Democrats or Republicans won’t vote for pension reform. The conversation isn’t what’s going in the bill, it’s, how are you going to pass it? And he’s not offering any help.”

* Related…

* Curtis Black: Rauner’s war on unions brings Illinois to the brink

- Posted by Rich Miller        

113 Comments
  1. - Chicagonk - Friday, Dec 9, 16 @ 9:36 am:

    More blame shifting. Apparently that is all politicians in Illinois know how to do.


  2. - Shake - Friday, Dec 9, 16 @ 9:36 am:

    Senator Cullerton, Rauner Wont Help Anybody.


  3. - Deft Wing - Friday, Dec 9, 16 @ 9:39 am:

    The frick and frack team of Madigan and (”the only adult in the room” my ___) Cullerton are nothing more than moving targets. Their shtick is apparent to objective observers — they are stalling and do not yet (ever?) want a budget deal to be accomplished.


  4. - Nick Name - Friday, Dec 9, 16 @ 9:40 am:

    “The conversation isn’t what’s going in the bill, it’s, how are you going to pass it?”

    Yup.


  5. - Rocky Rosi - Friday, Dec 9, 16 @ 9:41 am:

    Why are some so afraid of pension reform? Math is non-negotiable. The math of the IL pensions are not adding up. Why is this so hard to understand?????


  6. - Oswego Willy - Friday, Dec 9, 16 @ 9:43 am:

    ===Why are some so afraid of pension reform?===

    (Sigh)

    No one is afraid of pension reform, everyone is looking for a way for pension reform to work… constitutionally.


  7. - JohnnyPyleDriver - Friday, Dec 9, 16 @ 9:44 am:

    There ya go boys! Now you’re starting to figure this out. When the Governor demands you do something impossible, you make an equally impossible demand. We’ll meet somewhere in the middle


  8. - Not It - Friday, Dec 9, 16 @ 9:45 am:

    Legislators should not play a role in the contract negotiations of the employees of the Executive Branch. They shouldn’t even be informed of the status of the negotiations because they surely will squeal to the union.


  9. - Indochine - Friday, Dec 9, 16 @ 9:47 am:

    There goes Cullerton being all adult and reasonable again. There’s no room for any of that malarkey.


  10. - yeah - Friday, Dec 9, 16 @ 9:49 am:

    Dear Shake,
    You mean “Rauner won’t help anyone who isn’t in the upper one half of one percent of wealth.”
    With all these credit downgrades, and then the ’surprise’ upgrade on Excelon, I have no doubt Santa has visited Ken Griffen at Citadel early. Special Santa run, just for Griff…he might want to buy a Rembrandt or something for his Hawaiian beach house or something.


  11. - Rogue Roni - Friday, Dec 9, 16 @ 9:50 am:

    “Legislators should not play a role in the contract negotiations of the employees of the Executive Branch.”

    And the executive branch shouldn’t dictate what legislation to pass either…


  12. - Oswego Willy - Friday, Dec 9, 16 @ 9:50 am:

    ===…they surely will squeal to the union.===

    Words fail me.

    I’m taken aback every time by the distain people have for others and what they “get” and what they themselves “have”.

    Republicans had labor support at times, many times it was critical to campaigns and governing.

    Now? Labor is just flat out evil… to Raunerites.


  13. - Honeybear - Friday, Dec 9, 16 @ 9:51 am:

    This should give every AFSCME hope that we are not alone in this fight. No business CEO would ever destroy and collapse her workforce. Proof positive that Rauner is merely a leveraged buyout artist. Cullerton is showing us how to apply leverage in a political sense. I want this. You want this. Let’s deal. It also boxes Rauner and exposes the fact that he has never wanted a budget. Only the destruction of labor. I thank God for cullertons aid.


  14. - Skeptic - Friday, Dec 9, 16 @ 9:51 am:

    Rocky Rosi: Here’s some light reading you might want to look at: http://www.illinoiscourts.gov/opinions/supremecourt/2015/118585.pdf the ISC decision about the last attempt at Pension reform. But if that’s tl;dr, here’s a summary: “Pay up.”


  15. - Captain Illini - Friday, Dec 9, 16 @ 9:54 am:

    “Not It” - Good to see you’ve emerged from under the rock and joined society again…

    To the Post:

    We’ve been down this road before. Governor signs contract, legislature cries foul that the contract was not contained in budget, employee’s get screwed and have to sue for back pay - which many are still waiting.

    Of course the contract should be dealt with PRIOR to setting the budget so you can include those costs, and anticipate them in subsequent years.

    Pension reform - explained in great detail here by many and most succinctly by RNUG has already been done…and nothing will excuse the “what’s owed” portion except more funding. Sure, create a Tier 3 if you want that says the state won’t pay for anything, but last I checked Illinois couldn’t get 38,000 H1-B visas from Papa New Guinea to fill those positions. /s


  16. - Last Bull Moose - Friday, Dec 9, 16 @ 9:54 am:

    As RNUG and others have pointed out, there is no pension reform available that saves the State much money. Until Cullerton and Rauner recognize that, we will continue this fantasy negotiation.


  17. - JS Mill - Friday, Dec 9, 16 @ 9:56 am:

    =The math of the IL pensions are not adding up. Why is this so hard to understand?????=

    What don’t you understand?

    The pension is not in need of “reform”. It isn’t behaving poorly, the pension system is working perfectly.

    What isn’t and hasn’t been happening is funding. The ILGA has long failed to deliver the legally mandated level of funding. They diverted the money into other politically advantageous activities.

    Funding and legislative reform? Now you’re talking.


  18. - Anonymous - Friday, Dec 9, 16 @ 9:56 am:

    If the legislature isn’t aware of the dollar amount of the AFSCME/State of Illinois contract agreement, they can’t appropriate the money. We are talking about a four year projection.


  19. - Roadiepig - Friday, Dec 9, 16 @ 9:59 am:

    - Oswego Willy - Friday, Dec 9, 16 @ 9:50 am-

    You are exactly right. As a lifetime Republican (not Raunerite)and retired Teamster, the constant demonizing of all things union by the far right is sickening to me. To be willing to run up tens of billion in debt ,just for the dream of a union-free state, sure doesn’t jibe with being a “conservative”, but aside from here and a few other places, it is being ignored by the reports coming out in the press


  20. - Foster brooks - Friday, Dec 9, 16 @ 9:59 am:

    Pension reform was accomplished in 2011.there The only thing that will reduce pensions is to lower salaries or vested employees


  21. - JS Mill - Friday, Dec 9, 16 @ 9:59 am:

    = they are stalling and do not yet (ever?) want a budget deal to be accomplished.=

    Maybe they are waiting for the governors budget. You know, like he is supposed to present.

    Why on earth would they present a budget that is the Governors job.

    Unless you happen to have a copy laying around somewhere? You are such a banned word.


  22. - Almost the Weekend - Friday, Dec 9, 16 @ 10:00 am:

    Picture your average AFSCME and CTU rank and file in one corner behind Madigan and Cullerton. Other corner, Rauner.

    Pat Quinn learned his lesson


  23. - A guy - Friday, Dec 9, 16 @ 10:03 am:

    Adding another condition isn’t speeding this thing up. That’s a separate issue that’s working it’s way through a process. Stay focused John. On the matters at hand.


  24. - illinois manufacturer - Friday, Dec 9, 16 @ 10:03 am:

    Turnaround is fair play


  25. - Rich Miller - Friday, Dec 9, 16 @ 10:05 am:

    ===That’s a separate issue===

    C’mon, people have been saying the very same thing to Rauner for 2 years about his Turnaround Agenda.


  26. - Honeybear - Friday, Dec 9, 16 @ 10:06 am:

    Here’s the other thing that most don’t know. Rauners legal battle to destroy AFSCME, force a contact which will double healthcare for the first year and eventually legally transfer all healthcare costs to the worker, remove healthcare from collective bargaining and more, is failing quickly. The legal tide has turned against Rauner. A big decision came out last night. Rauner should take the advice Cullertons offers and cut a deal before the legal perfidy is reluctantly exposed in the media by the final court outcomes. Rauner, Cullerton just did you a face saving solid. Love of God take it.


  27. - Jaded - Friday, Dec 9, 16 @ 10:07 am:

    Cullerton could care less about AFSCME until Bruce Rauner was governor.

    Most of you never give the Governor credit for doing anything well, but, as in this case, he has proven quite adept at bringing people together and forging coalitions where they didn’t exist before he was governor.


  28. - Bored Chairman - Friday, Dec 9, 16 @ 10:09 am:

    Cut a deal with AFSCME? What does that mean exactly? Acquiesce to every unreasonable demand that this public sector union has? Continue to give gold plated benefits, ridiculous work rules, and unconscionable terms courtesy of the bankrupt State of Illinois? Sorry, President Cullerton. Perhaps you can use your influence to tell AFSCME to “cut a deal” with Rauner. You know, reasonable and market rate salary and benefits. The ability to discipline and terminate bad employees. Some semblance of respect for the taxpayer who support state government. Rauner never hid his disdain for the corpulent union that is AFSCME when he ran for Governor. He won. This taxpayer funded union tried to rig the system by using bought and paid for Democrats in the General Assembly to get the Chief Executive kicked off the bargaining table. That, too, failed. It’s time to pay the piper, AFSCME. Game over.


  29. - Louis G. Atsaves - Friday, Dec 9, 16 @ 10:12 am:

    So they move the goal posts some more. Now AFSCME agreement? Hey, wasn’t labor reform part of Rauner’s turn around agenda?

    Five lifeguards posing for the masses while Illinois drowns, because none of them want to go first.


  30. - Sue - Friday, Dec 9, 16 @ 10:14 am:

    Yea- overtime before 40 hrs,lavish healthcare,lax standards- sounds like a plan. Keep your pensions as is and tell Cullerton to get the Union to accept Rauners proposal. It is better for the State then another questionably legal pension reform bill


  31. - City Zen - Friday, Dec 9, 16 @ 10:14 am:

    “He’s offered them no pay raises for four years, and to cut their healthcare by a third. How, on top of that, can we say ‘We’re going to cut your pensions too?’”

    No pay raises is the only legal way to “cut” pensions. I don’t why Cullerton or Rauner cannot see this. They’ll need to freeze Tier 1 salaries longer for any real pension “reform”.

    Conversely, you don’t need to cut pensions for Tier 2 employees. They’ve already been cut, hence should not be subject to the same wage freeze and health care cut demands being made by Rauner.


  32. - Oswego Willy - Friday, Dec 9, 16 @ 10:15 am:

    ===What does that mean exactly? Acquiesce to every unreasonable demand that this public sector union has? Continue to give gold plated benefits, ridiculous work rules, and unconscionable terms courtesy of the bankrupt State of Illinois?===

    Argue like an adult.

    Cut a deal means AFSCME needs to realize Rauner isn’t Quinn, Rauner needs to realize Labor Peace is an honest need and want for a governor.

    Find the “middles”, show good faith, realize where the room exists and needs to be.

    Your ignorance is why people despise people and the “jealousy” continues to cloud actual events.


  33. - ANONIME - Friday, Dec 9, 16 @ 10:17 am:

    Bored Chairman - be careful what you want. You may find market rate salary and benefits are better in the private sector. then where would you be when you need to meet those?


  34. - JS Mill - Friday, Dec 9, 16 @ 10:18 am:

    =Five lifeguards posing for the masses while =Illinois drowns, because none of them want to go first.=

    True statement Louis.

    But, one of them is supposed to go first and he isn’t. Same guy is at the top of the leadership food chain. Hint: the governor.

    All he has to do to get the ball rolling is propose a budget. If MJM and Cullerton refuse to engage, he would have the upper hand in my opinion.

    But, that may take some intestinal fortitude that he does not poses. He does not seem to like owning leadership decisions, just houses.


  35. - Norseman - Friday, Dec 9, 16 @ 10:27 am:

    It really is laughable to see the Raunerbots crying foul on the addition of another ask.

    Jesse is printing the new plates with the slogan, “Land of Hostage Taking.”


  36. - Bored Chairman - Friday, Dec 9, 16 @ 10:32 am:

    OW, kindly refrain from ad hominem attacks. Rather than calling someone with whom you disagree childish, ignorant, and jealous, you may want to look in the mirror. YOU may not acccept that Rauner won the election and continues to defeat union backed legislative attempts to strip him of his power, but I assure you that the majority of Illinoisans understand this loud and clear. House and Senate Democrats lose seats when Hillary won by 19 and you are still in denial. The voters understand what is going on - the unholy alliance of public sector unions, trial attorneys and the Democratic Party of Illinois. Pretending that this doesn’t exist makes you intellectually dishonest and a shill. Pretending that AFSCME wants anything that is “fair” is laughable on its face. Their greed and disdain for the Illinois taxpayer knows no bounds. Elections have consequences. They lost. You lost. Deal with it.


  37. - Oswego Willy - Friday, Dec 9, 16 @ 10:37 am:

    - Bored Chairman -

    LOL!

    Read what you wrote…

    ======What does that mean exactly? Acquiesce to every unreasonable demand that this public sector union has? Continue to give gold plated benefits, ridiculous work rules, and unconscionable terms courtesy of the bankrupt State of Illinois?===

    “Every”? “Unreasonable”? “Gold Plated”? “Ridiculous”? “Unconscionable”?

    Is that an adult.

    Think on that. It’s not about me. It’s about your arguing.


  38. - Mason born - Friday, Dec 9, 16 @ 10:38 am:

    I do think Rauners goal is to crush or at least rein in AFSCME as a political force. Problem is he’s completely botched it. AFSCME was far from popular, no offense Honeybear, with State workers before this. Most I know, folks I worked with in DOC & professionals I deal with now, viewed ASCME as a relic that took their cash with very little to show for it. Not anymore with his Hamfisted approach the Governor has turned an Annoyance into an essential part of the work universe.

    If he’d been wise he’d of gone with a fair but tough negotiation say pay freeze, modest Health care changes, & no longer automatic dues deduction. Instead Full Membership as a % of State Workers increases while he’s spunning his wheels for almost 2 yrs.


  39. - JS Mill - Friday, Dec 9, 16 @ 10:39 am:

    @Bored Chairman- “Their greed”- How many millionaire AFSCME workers (from their state compensation) do you figure there are?

    Seriously.

    If wanting more pay is greedy, how much is enough?

    How much is too much $180 million per year?

    Or is it only because they are public employees and thus really only allowed the leave of the wealthy paternal class?

    I am not defending AFSCME, I have to bargain with unions and am at odds with them many times. But they do provide a valuable service that should be compensated. What is the number?


  40. - Oswego Willy - Friday, Dec 9, 16 @ 10:40 am:

    Oh. And… - Board Chairman -…

    Read your response. Is that an adult arguing.


  41. - Bored Chairman - Friday, Dec 9, 16 @ 10:43 am:

    Willy, grow up. You sincerely are bereft of anything to say except “Rauner bad.” We get it. You attack anyone who defends him. We get it. You’re clearly a bitter person. We get it. Enjoy the cheetos in mom’s basement. Get it? Good.


  42. - X-prof - Friday, Dec 9, 16 @ 10:44 am:

    @City Zen: ===No pay raises is the only legal way to “cut” pensions. I don’t why Cullerton or Rauner cannot see this. They’ll need to freeze Tier 1 salaries longer for any real pension “reform”.===

    Doubt your idea is legal. Probably still unconstitutional. Why? Remove the quotes on “cut” and you wrote your own answer. Likely problems with due process and equal treatment, too. The type of pension you were offered when you were originally hired is probably not a legit basis for awarding raises. Maybe someone with better legal background than mine can offer a more informed opinion.


  43. - Oswego Willy - Friday, Dec 9, 16 @ 10:46 am:

    ===You sincerely are bereft of anything to say except “Rauner bad.” We get it.===

    I wrote…

    ===middles”, show good faith, realize where the room exists and needs to be.===

    Now you’re a victim… to me? lol

    ===Enjoy the cheetos in mom’s basement. Get it? Good.===

    Only if they come with a Slurpee and mom makes meatloaf if I have guests over.

    I dunno, making it about me doesn’t seem… adult.


  44. - Anon - Friday, Dec 9, 16 @ 10:47 am:

    ===He has an ability to negotiate that contract and help us pass a pension reform bill.===

    As a bit of an aside — I know it hasn’t been tried before, but I’m pretty sure that this would still be considered unconstitutional.

    For newer employees (Tier 2) the previous pension reform bill actually would have been a better deal for them than the one that they’re on now because their benefits remained the same while their contribution reduced.

    If — somehow — the union negotiated on pension reform, I imagine a suit would be filed pretty much immediately by an impacted worker or workers challenging it on the basis of “shall not be diminished.”

    And it all comes back to this — pay your bills.

    Decades of passing the bill around the table doesn’t mean dinner’s free.


  45. - JS Mill - Friday, Dec 9, 16 @ 10:54 am:

    @Xprof- RNUG and Arthur Anderson are our resident experts and have weighed in on this in the past. I would defer to them.

    the one thing I heard which got me thinking, and I am not sure how the court would rule, came from Cullerton’s former lead counsel Eric Madair.

    He cited a New York case and specifically stated that wage increases are not guaranteed. Therefor not a diminishment. I think he fails though, when he relates it to consideration because increases are currently included which I believe sets the precedent.

    Madair is an incredibly sharp person and I have a lot of respect for him but do disagree on this issue.


  46. - DuPage - Friday, Dec 9, 16 @ 10:55 am:

    @bored chairman 10:09===Rauner never hid his disdain for the corpulent union that is AFSCME when he ran for Governor.===

    Yes, he did. After his lead in the primary shrank

    to 2% because the unions suddenly backed Dillard,

    Rauner suddenly said nothing more about unions,

    hiding his reason for running for governor.

    Rauner did not win. Quinn lost.


  47. - Rich Miller - Friday, Dec 9, 16 @ 10:55 am:

    ===Rauner did not win===

    In this country, if you win you win. Doesn’t matter how as long as it’s legal. Rauner won. Get over it or find another country to live in.


  48. - HangingOn - Friday, Dec 9, 16 @ 11:02 am:

    ==reasonable and market rate salary and benefits==

    Per the Bureau of Labor Statistics website:

    Environmental Engineers (Annual Mean Wage)

    State Wages $76,420

    Architectural, Engineering, and Related Services $90,190

    I work with Engineer III’s that after 15 years make $78,000 per year. If you insist they get paid market rate salary, I’m sure they would love to get paid that 90k and have the same benefits as those companies are giving. (Private companies tend to give things like incentives and bonuses you know). They’d still probably be paying less for insurance than they will be at the state soon.


  49. - Frank - Friday, Dec 9, 16 @ 11:02 am:

    Employees pension are protected by the Constitution so even if the unions agree and even if there is a majority vote for pension reform each individual employee can say no thanks because it’s there right . They are protected so this shall be interesting


  50. - Bored Chairman - Friday, Dec 9, 16 @ 11:03 am:

    Oh willy, you slay. I believe you’re the one who made it about me, but I digress. I suppose your idea of debating ideas is to attack the person who makes them, when that person defends themselves to further attack them. When that person continues to defend himself and his ideas, to mock the person and claim that they are a victim. Smug doesn’t work, Willy. Just ask the 2016 Democrats. Nice try, though. You obviously are used to only debating with people at your IQ level. I fully expect another tired and silly response OW, but I will no longer dignify your truculent desire to be noticed with a response. Good day, sir.

    And, yes, Rauner won, people. Get over it.


  51. - AC - Friday, Dec 9, 16 @ 11:03 am:

    There’s a pattern to successful negotiations, and it typically doesn’t involve exchanging an undesirable thing for something that is undesirable. The Governor can find middle ground with AFSCME once he understands the interaction between contract language and compensation. I think most in AFSCME Is well aware that this administration will not yield an especially desirable contract, especially given the stats fiscal mess. However, very few will agree to a contract that takes away their job security in exchange for significant cuts in compensation. It is much like the issues related to the budget, where few if any Democratic legislators are going to agree to decimate their supporters in exchange for being the only ones voting for a tax increase that very well could cost them the next election. A contract is doable, a budget is doable, even unconstitutional bipartisan pension reform that ultimately gets rejected by the courts is doable.


  52. - RNUG - Friday, Dec 9, 16 @ 11:07 am:

    == How, on top of that, can we say ‘We’re going to cut your pensions too?’ ==

    Don’t see how he’s going to do that. Must still think the consideration model will let them force a choice between diminishment A or diminishment B. Suspect the IL SC will tell them differently.


  53. - Oswego Willy - Friday, Dec 9, 16 @ 11:11 am:

    - Bored Chairman -

    I asked you argue like an adult.

    I then should your childish verbiage.

    You have yet to make an argument.

    I even showed ya me liking fit a common ground solution.

    You’re angry. It’s sad. If you had actual adult points, you’d banks them.


  54. - Grandson of Man - Friday, Dec 9, 16 @ 11:13 am:

    “Democrats……won’t vote for pension reform.”

    As OW says, you need the votes, and they ain’t there.

    “He’s offered them no pay raises for four years, and to cut their healthcare by a third. How, on top of that, can we say ‘We’re going to cut your pensions too?’ He has an ability to negotiate that contract and help us pass a pension reform bill. Democrats or Republicans won’t vote for pension reform.”

    This is basically it. Harsh cuts.

    What makes the cuts worse is that Rauner’s income more than tripled in his first year as governor. He made $188 million dollars. Not only that, he got the bonanza of paying less than 3.75% state income tax last year. Not bad, in a state that’s circlin’ down the drain.

    So Rauner is quite able to bear a bigger share of sacrifice than he’s offerin’.

    It’s reassuring to see top Democrats stand up for a large share of state government, the employees. Rauner is going all-out to force them to eat up a share far bigger than the whole Rauner apparatus is willing to offer.


  55. - AC - Friday, Dec 9, 16 @ 11:17 am:

    There is constitutional pension reform, as long as it is truly voluntary. While a lot of people on this blog would immediately do an analysis of Net Present Value of a Tier 1 buyout that voluntarily moved them to Tier 2, and reject such an option, there are a lot of people who wouldn’t do that. Far too many people live for right now, don’t anticipate ever actually retiring, and don’t understand how valuable the 3% annual increase actually is. If the amount were significant enough to buy a new car, pay for their kids college, or achieve some other financial goal, I believe a significant number, possibly even 5% - 10% would take the state up on such an ill advised buyout.


  56. - Demoralized - Friday, Dec 9, 16 @ 11:26 am:

    ==And, yes, Rauner won, people. Get over it.==

    Yes, he did. And the Democrats still control the General Assembly. You may want to get over that too.


  57. - HangingOn - Friday, Dec 9, 16 @ 11:26 am:

    ==There is constitutional pension reform, as long as it is truly voluntary.==

    The biggest problem I see with any deal, though, is Rauner has proved anything people gain now in exchange for something less can be taken away by the next Governor. My old boss (was here since the 60’s before there even was the Agency I now work for) told me many tales of things the workers agreed to give up, (ie giving up raises for 4 years in exchange for something else) just to have another Governor come in and take away the thing they exchanged that lower pay for. Why would you bargain away your pension for anything when the next Governor can just take it away?


  58. - RNUG - Friday, Dec 9, 16 @ 11:28 am:

    == There is constitutional pension reform, as long as it is truly voluntary. ==

    That is the whole ball game right there!


  59. - Honeybear - Friday, Dec 9, 16 @ 11:28 am:

    Look forget all the other arguments. A 21% decrease in a workforce that was already the smallest per capita in the country BEFORE Rauner should be the primary consideration. Fine let me translate. If you had a large company with the smallest workforce in your industry at the onset of a new CEO. Then in the first 2 years you lost an additional 21% and were on the verge of causing a huge rush of people leaving. Wouldn’t you ultimately come to the belief that the company would soon not be able to conduct business, fulfill orders, transact? Would it not be a company in name only? There is a choice though. Try to have labor peace or let the company go down. I want my state to function. It can’t function without workers or at least a certain amount of workers. superstars are ineffective without myriad state workers to carry out policy and statute just as a board of directors and management are ineffective without employees.


  60. - Oswego Willy - Friday, Dec 9, 16 @ 11:31 am:

    === There is constitutional pension reform, as long as it is truly voluntary. ===

    Mandating a voluntary action?

    Explain that…


  61. - AC - Friday, Dec 9, 16 @ 11:31 am:

    ==Why would you bargain away your pension for anything when the next Governor can just take it away?==

    It’s a perfectly rational argument, and the overwhelming majority of people would agree with you. However, many millions could be saved if only a few percent of people took such an option. Also, what I’m describing is an immediate one time cash buyout for individuals willing to move from Tier 1 to Tier 2, so that would be difficult for a future administration to take away.


  62. - AC - Friday, Dec 9, 16 @ 11:34 am:

    ==Mandating a voluntary action?==

    I don’t recall mentioning a mandate, only a voluntary option. Once it becomes coercive, it becomes unconstitutional.


  63. - Markus - Friday, Dec 9, 16 @ 11:35 am:

    As mentioned, short of freezing Tier 1 salaries, “pension reform” can only amount to a rounding error of savings; hardly worth destroying a State over it. The overdue pension bill needs to paid just like the overdue vendor payments and payments to bond holders. I’m troubled with the logic that it’s OK to stiff pensioners but vendors and bond holders are off-limits.


  64. - Oswego Willy - Friday, Dec 9, 16 @ 11:47 am:

    ===I don’t recall mentioning a mandate, only a voluntary option. Once it becomes coercive, it becomes unconstitutional.===

    If it’s not going to be mandatory, why would anyone chose a 401K versus a constitutionally guaranteed pension?

    That’s where I’m going here…


  65. - Sue - Friday, Dec 9, 16 @ 11:49 am:

    There is no constitutionally permissible way to fix the problem for existing folks given the S Ct ruling. Maybe Madigan talks to his judicial friends in advance this time


  66. - ComeTogether - Friday, Dec 9, 16 @ 11:50 am:

    I’ll trade my tier 1 to tier 2 for my missed and future step increases to be reinstated along with a little extra money for the cause.


  67. - Mason born - Friday, Dec 9, 16 @ 11:57 am:

    Willy,

    I do think there are folks who would take that deal. Problem is they’re a very small minority & most have reasons why they won’t be able to collect pension for long. Terminal illness etc. Not exactly an exchange that would help the State.


  68. - Johnnie F. - Friday, Dec 9, 16 @ 11:58 am:

    Honeybear…I’m curious….anywhere one can read more about this?

    “The legal tide has turned against Rauner. A big decision came out last night. Rauner should take the advice Cullertons offers and cut a deal before the legal perfidy is reluctantly exposed in the media by the final court outcomes.”


  69. - Oswego Willy - Friday, Dec 9, 16 @ 12:01 pm:

    - Mason born -

    ===Problem is they’re a very small minority & most have reasons why they won’t be able to collect pension for long.===

    Yep. As voluntary, the “math” doesn’t work.

    Need more than a “few” or even a majority. Thus my… “questions”.

    You’re there…

    ===I’ll trade my tier 1 to tier 2 for my missed and future step increases to be reinstated along with a little extra money for the cause===

    You think that will be on the table? Oh boy.


  70. - RNUG - Friday, Dec 9, 16 @ 12:08 pm:

    == I’ll trade my tier 1 to tier 2 for my missed and future step increases to be reinstated along with a little extra money for the cause. ==

    In all seriousness, I suggest you spend a few hundred bucks to have an independent financial planner review any offer using standard planning assumptions.

    You’ll probably change your mind when you see the numbers in black and white …


  71. - ComeTogether - Friday, Dec 9, 16 @ 12:10 pm:

    @OW
    A man can wish right?! Lol. :) I really would legitimately negotiate my tier 1 as I plan on bailing from this state before long. I have 20 more years, with 9 in. Finally hit a decent step but then hit Mr. Freeze. With the shape of the state & property taxes astronomically high, I’m trying to save up and bail.


  72. - Mason born - Friday, Dec 9, 16 @ 12:14 pm:

    Willy

    Ya it’s doodling in the margins at this point.

    I suspect there are other folks who might take it without thoroughly considering if it’s wise. I would hope that’s a very small #. However after the GOP Primaries my faith in people analyzing choices & making a wise decision is a bit strained.


  73. - Mason born - Friday, Dec 9, 16 @ 12:20 pm:

    Willy,

    There may be a slight number of people willing to take the deal without analyzing the options as to whether it’s wise or not. At least I hope it’d be slight. After the GOP Primaries this year my faith in analyzing choices & making a wise decision is a bit strained.


  74. - Oswego Willy - Friday, Dec 9, 16 @ 12:21 pm:

    - ComeTogether -,

    Best of luck. I hear what you’re saying, but keep in mind - RNUG -’s wise words too…

    ===doodling in the margins at this point.

    I suspect there are other folks who might take it without thoroughly considering if it’s wise.===

    Yep on all counts here.

    People vote against their better selves. Handling money? I guess that could happen too.


  75. - up2now - Friday, Dec 9, 16 @ 12:21 pm:

    == There is constitutional pension reform, as long as it is truly voluntary. ==

    ==That is the whole ball game right there!==

    Maybe Rauner’s plan is to sail the ship of state into the rocks of insolvency so that Tier 1 members WILL voluntarily opt for Tier 2 rather than risk losing everything.


  76. - Nick Name - Friday, Dec 9, 16 @ 12:23 pm:

    “Maybe Madigan talks to his judicial friends in advance this time”

    You have proof that Madigan coerces or influences judges?


  77. - Honeybear - Friday, Dec 9, 16 @ 12:26 pm:

    Johnie F. Well a lot is on the ILRB website. But I had the privilege of hearing our argument with my own ears. It’s solid it’s now in non Rauner controlled venues. When it’s aloud to be heard it’s insurmountable IMHO. People will say St. Clair is controlled by us but it’s truly not. That insults the court. Plus st Clair did something wholly unexpected with the TRO. Where as the ILRB has shown to do exactly as Rauner instructs. So really I see the tide turning because I see the implications of our argument finally coming out. Have faith brother. We finally have something that backs that faith up. I have hope that our union will survive.


  78. - Oswego Willy - Friday, Dec 9, 16 @ 12:27 pm:

    ===Maybe Rauner’s plan is to sail the ship of state into the rocks of insolvency so that Tier 1 members WILL voluntarily opt for Tier 2 rather than risk losing everything.===

    Why would you voluntarily do that with a unanimous SC decision in-hand.

    You wouldn’t.


  79. - ComeTogether - Friday, Dec 9, 16 @ 12:28 pm:

    @ OW & RNUG.

    Just wanted to say thank you to you two for your advice and knowledge. Not trying to inflate your heads but I definitely skip to read your contributions along with a few others. You’re correct, if I do stick around, an advisor should be a top priority.


  80. - Mason born - Friday, Dec 9, 16 @ 12:36 pm:

    After the court ruling, even if state was completely aground, pensions would still have to be paid I believe. Out of Taxes, sale of assets, etc.


  81. - Oswego Willy - Friday, Dec 9, 16 @ 12:40 pm:

    - ComeTogether -

    You’re welcome and thanks for the kind words. Sincerely.

    The truth is probably that - RNUG - teaches me and I’m sharing some of his wealth of knowledge. He’s really great, and we’re lucky he shares what he knows.

    ===After the court ruling, even if state was completely aground, pensions would still have to be paid I believe. Out of Taxes, sale of assets, etc.===

    The ILSC made clear their feelings, and this… is a fair reflection of that ruling.


  82. - Saluki Matt - Friday, Dec 9, 16 @ 12:57 pm:

    Rauner seems to be getting deeper and deeper into a no-win situation.


  83. - Honeybear - Friday, Dec 9, 16 @ 1:07 pm:

    There must be a reason why I can never get any one to challenge me on my claim that the workforce is collapsing and that we are approaching the point of no return. I really feel that it supersedes most other arguments. Posters go round and round on stuff we’ve been over a million times. Yet I can’t even get a courtesy “get off my lawn”.


  84. - yeah - Friday, Dec 9, 16 @ 1:09 pm:

    Rauner won. Now he needs to Governor and present a Budget plan for the Committees in both Chambers to hash over. They have heard the spending requests from Rauner appointees. What is the Governor’s Revenue Ask to balance the cash flows? Governor is Chief Executive Officer and it comes with a large experienced budgeting staff.

    Given the SC ruling, let us be honest in our diction and call it what it is, Unconstitutional Pension Fraud. Please delete these ‘reform’ euphemisms for fraud.


  85. - AC - Friday, Dec 9, 16 @ 1:12 pm:

    Honeybear - maybe the reason no one is challenging you is that it is not in dispute. We all know the number of state employees per capita in Illinois is ridiculously, and I suspect Rauner is hoping for a collapse because it would help him privatize services by blaming state employees for the collapse. There’s not a single person whose job couldn’t be contracted out, the only thing that’s saved AFSCME so far is that it would be more expensive to do so. Remove the cost comparison provision from the contract, and that reason will go away too.


  86. - Honeybear - Friday, Dec 9, 16 @ 1:18 pm:

    God AC I never thought of that. Well perfect example of careful what you wish for. I should have followed my coworkers advice. Shut up and color. Thanks Though AC


  87. - State Worker THX 1138 - Friday, Dec 9, 16 @ 1:34 pm:

    My department is hemorrhaging people, and as far as I know, there are no hiring plans.


  88. - A guy - Friday, Dec 9, 16 @ 1:35 pm:

    ==After the court ruling, even if state was completely aground, pensions would still have to be paid I believe. Out of Taxes, sale of assets, etc.==

    Which court ruling guaranteed this?


  89. - RNUG - Friday, Dec 9, 16 @ 1:38 pm:

    == There’s not a single person whose job couldn’t be contracted out, the only thing that’s saved AFSCME so far is that it would be more expensive to do so. ==

    I’m not going to say it couldn’t be done, but there are some positions that literally require a year or more of training AND certification in order to be able to actually do the job unsupervised. Some of those positions are administering Federal programs and they get kind of touchy about error rates … to the point where they want money back from the State.

    Some of the other positions explicitly require specific degrees that are not all that easy to find in the workforce … especially if you want to just pay peanuts.

    The State has already outsourced a lot of stuff to various private or NFP organizations but the budget impasse has decimated a lot of those firms. Given those examples, how many outsourcing firms will want to step up to provide new services when there is a question about payment, let alone timely payment?

    All I see outsourcing doing is giving Rauner a chance to steer contracts to his political supporters and friends while costingnthe taxpayer more for a lower quality service.


  90. - CapnCrunch - Friday, Dec 9, 16 @ 1:44 pm:

    “If you had a large company with the smallest workforce in your industry at the onset of a new CEO. …[And he caused a reduction of] an additional 21% …..Wouldn’t you ultimately come to the belief that the company would soon not be able to conduct business, ….”

    Well, if most of your customers experienced little or no change in the service they were receiving from the company they might conclude the company had become much more efficient.


  91. - Anon - Friday, Dec 9, 16 @ 1:51 pm:

    ===You’ll probably change your mind when you see the numbers in black and white===

    RNUG is correct. Tier 2 blows. Especially since to receive full benefits one must be 67, and claiming them earlier at 62 decreases your payout by a ridiculous amount.

    When one considers the 4% contribution and compares it to a 4% contribution plus employer match to an index fund with low fees, it’s pretty depressing.


  92. - Anon - Friday, Dec 9, 16 @ 1:55 pm:

    ===All I see outsourcing doing is giving Rauner a chance to steer contracts to his political supporters and friends while costingnthe taxpayer more for a lower quality service.===

    Anyone who thinks the state government is rough now is going to be really unhappy if some of those services get privatized.

    You don’t want a for profit company with a bonus driven employee handling your tax issue.


  93. - pool boy - Friday, Dec 9, 16 @ 2:01 pm:

    We all think we are indispensable. Truth is, some one did your job before you did and someone will do it after you leave. Maybe better, maybe worse or maybe the same.


  94. - AC - Friday, Dec 9, 16 @ 2:02 pm:

    I hope my previous comment is released, but if it isn’t, I’ll say that, I am in complete agreement with RNUG. Massive outsourcing would be inefficient and impractical, but is possible.

    ==You don’t want a for profit company with a bonus driven employee handling your tax issue.==

    Imagine a Redflex type situation involving DOR. Even worse would be an incentive structure similar to Wells Fargo applied to handing tax issues.


  95. - Anonymous - Friday, Dec 9, 16 @ 2:08 pm:

    I know from experience that there are thousands of attorneys in the state working for temp agencies earning around $24/hr. with zero benefits as at-will employees on short term projects. Rauner would have no problem outsourcing the attorney positions.


  96. - Anon - Friday, Dec 9, 16 @ 2:10 pm:

    ===Imagine a Redflex type situation involving DOR. Even worse would be an incentive structure similar to Wells Fargo applied to handing tax issues.===

    By statute the department has the ability to issue levies unilaterally after a bare minimum of required notice.

    It also has the ability to ‘estimate’ liabilities that can later be levied. Some person moves from the state, doesn’t update their address, and magically discovers that they’ve been assessed thousands of dollars in liabilities after it’s been taken from their bank account.


  97. - pool boy - Friday, Dec 9, 16 @ 2:12 pm:

    When comparing cost, you must also include state worker benefits against contract cost, not just salaries. Contractors also will not add to the pension debt, which is a way to do pension reform legally.


  98. - RNUG - Friday, Dec 9, 16 @ 2:16 pm:

    == Which court ruling guaranteed this? ==

    Various decisions have said that it is up to the GA to provide the funding in whatever manner the GA deems appropriate (see IFT v Lindberg for one) to pay the pensions. And multiple decisions, including recent ones like (Kanerva and SB-1), have said the benefits can’t be reduced. You can reasonably infer from those decisions that IF the pension funds were to go broke, the GA would have to use available revenue to pay the actual pensions.

    We’ve never reached that point, so there is no explicit court order saying “when the pension funds run out, pay the pensions from the GRF (or sales tax or whatever)”. If you read Eric’s “Welching” document, it’s clear he believes the sum of the cases cited requires the pensions “be paid when due”. And if anybody is an expert on Illinois pensions, it is Eric Madiar.

    Here’s a fairly recent article by Eric clearly explain the box the State is in:

    http://www.sj-r.com/opinion/20160710/eric-madiar-states-pension-obligations-must-be-met


  99. - Honeybear - Friday, Dec 9, 16 @ 2:20 pm:

    RNUG. Holy crap I hadn’t thought of the non payment of temp firms either. Which makes me want to scream all the louder WHY!!!!! Stateworker THX is in the same spot and knows. it haunts me to think back on the daysRich was social with the Gov and described him as a “true believer”. It’s incredibly frightening to think about a person planning for years in advance the destruction of an organization that helps protect me as an ordinary employee. I get it with pro life/choice battles that someone might be a zealot because it’s about big life death control issues. Labor management issues are about workplace fairness , safety, fair wages and benefits for a fair days work. My God the kind of “belief” necessary to bring about the willful economic devastation and damage to families is truly frightening. Some posters on here have no idea how hateful they are sounding when they want to take away what someone earns and the protections they have.


  100. - Honeybear - Friday, Dec 9, 16 @ 2:35 pm:

    Fair comment Capncrunch but the vast majority of people have no knowledge of how much the state does or where. In addition our society as a whole segregates those in need thus insulating us from exposure to need and suffering. I have long decried this. Thus we put those who do need or suffer in a sound proof room so we don’t have to see or hear them. Ergo those the state helps the most are hidden and cannot be heard. Like the 51% of Illinois school children who need free or reduced price lunches. I think they and their parents will miss the state. Let me see. There are currently 43 people in the que to see six caseworkers about food stamps here at my office. We are behind by hundreds of apps. No it’s definitely not efficiency we’ve gained. Ask any state worker if their department is fully staffed. No it’s not. You in your privilege maynot need to come into contact with the state. But try your efficiency argument over at DCfS or IDOC or my DHS. No the collapse is accelerating. Which makes me wonder why Rauner has some kind of state death wish.


  101. - Federalist - Friday, Dec 9, 16 @ 2:38 pm:

    As such, the plan Cullerton floated Tuesday calls for giving employees a choice about their retirement benefits. Under the first scenario, a worker could choose to not have future pay increases factored into their pensions. In exchange, they would receive an annual 3 percent compounded cost-of-living pay increase. If they chose to count pay raises toward their pensions, workers would receive lower annual cost-of-living increases that are not compounded over time.

    Is the above what Cullerton is still proposing?

    If so it seems very vague, a potential red herring for anyone who would agree to it, and does very little to reduce pension costs except perhaps decades down the road.

    At least that is the way I see it. Thoughtful comments on why I am mistaken are welcome.


  102. - Honeybear - Friday, Dec 9, 16 @ 2:40 pm:

    On a different note I want to thank you RNUG for your clarity and insight. I hope you family is well.


  103. - Tommydanger - Friday, Dec 9, 16 @ 2:43 pm:

    Could outsourcing save the state a lot of money? I’m certain that it could, but at what price? Such firms rarely provide benefits and their turnover is predictably high. The value of continuity and institutional knowledge is rarely reflected in the bottom line financially, but it is reflected in the quality of those services to our taxpayers. In our never ending race to the lowest common denominator for wages, we will all end up losing.


  104. - Union Man - Friday, Dec 9, 16 @ 2:48 pm:

    Although payments are a problem, they are NOT as big as we are being told. The actuaries have assumed 3-4% inflation per year and just ain’t the way America has been for the last 25 years. Make the projections match actual inflation and the amount owed will drop precipitously.


  105. - RNUG - Friday, Dec 9, 16 @ 2:50 pm:

    -Federalist- @ 2:38pm

    If that is truly Cullerton’s plan, I don’t think the IL SC will buy it.

    Today, the State doesn’t have to give you a raise, but IF they do, it counts toward your pension and you still get your 3% AAI.

    So the Cullerton “choice” looks coercive to me, which would violate the standard for using “consideration” to modify a contract.


  106. - JGG - Friday, Dec 9, 16 @ 3:01 pm:

    Yes, I beleive that is the pension reform Cullerton is proposing, called consideration. However, a third choice is needed thats missing. Keep what you have. A choice between two diminishments is no choice at all. Based on the recent ISC ruling,his proposal, as is would be found unconstitutional.


  107. - RNUG - Friday, Dec 9, 16 @ 3:04 pm:

    -Honeybear- and -Cometogether-

    Thank you.

    -HB-,

    Family all doing OK. Like most of us, could be doing a bit better but we could also be a whole lot worse off. Grateful for what we have and where we are at. Missing some deceased family members, which is normal. Hope you have a good holiday season with all the uncertainty hanging over your head.


  108. - JGG - Friday, Dec 9, 16 @ 3:04 pm:

    Sorry, mis-spelled believe!


  109. - Anonymous - Friday, Dec 9, 16 @ 3:17 pm:

    Scene: Executive Top Dogs of “.001% Club” sipping brandy in the cigar smoke choked room at plush Big Dog Club (”Millionaires need not apply”).
    April, 2012
    Top, Top Dog: “Well boys, enough talk. Do we severely chastise the Unions, or destroy them?”
    Top Dogs: (in unison). “DESTROY”


  110. - Neveranonymous - Friday, Dec 9, 16 @ 3:55 pm:

    Outsourcing allows you to do more than steer contracts to political supporters and friends and avoid using union workers: it allows you to avoid Civil Service protections, Veteran’s preference, the Rutan decision, and the obligation to hire qualified Illinois residents first. At least a few of these should concern everyone in Illinois.


  111. - RNUG - Friday, Dec 9, 16 @ 4:03 pm:

    To be clear and possibly reiterate stuff I’ve said the last few days, I believe there are only a few things left on the table for legal “pension reform”.

    1) cost shift - the State can shift the “normal” cost going forward on governmental units with taxing authority, ie, local school districts and community college districts … but that will just increase local property taxes or cause service cuts

    2) pickup - school districts that have picked up the employee pension contribution can try to claw it back … the State could even pass a law stating the schools can no longer do so, but it would still have to be negotiated as part of the union contract and probably won’t be able to take effect immediately. Note: this does not violate the Constitution or the idea of the pension being an individual right because the union negotiated the pickup as an extension of the labor contract.

    If you combine (1) and (2) at the same time, you might get a revenue neutral result for the districts where the pickup is occurring now. If the district is not doing a pickup today, there will be a negative revenue impact and correcting it will most likely require a property tax increase.

    3) buy-out - A voluntary buy-out program for either all or a portion of the promised pension. It would have to be very carefully structured that any buy-out amount be placed into a 401k or 457 plan (you may run up against contribution limits) with no pendion cash going to the employee or there would be major IRS penalties for early withdrawal. In fact, the more I think about it, the best / only way to legally (maybe) do it would be to calculate the payout, then (for at least SERS participants) phase it over multiple years (as dictated by the IRS limits) as a 457 (deferred comp) contribution. If the State approached it any other way, I’d want to see the IRS advisory letter before I took the deal.

    4) something new - offer some new benefit in exchange for surrendering Tier 1 status for Tier 2 status, or reducing just the AAI, or other change to the pension. The question is what new benefit could you offer in exchange; guaranteed CPI + 5% annual raises, non-reduced survivor’s benefit, earlier retirement age than Tier 2 allows today, the State paying off your mortgage, the State buying you a new car every 5 years for life, or the State providing free college tuition for your kids at any State university, the State making your salary state tax free, etc.? I know, a few of the suggestions are a bit ridiculous, but we need to think outside the box.

    Anyway … IMO, that is pretty much what I see as the legal “pension reform” that could still be on the table


  112. - Federalist - Friday, Dec 9, 16 @ 4:24 pm:

    RNUG - Friday, Dec 9, 16 @ 2:50 pm:

    -Federalist- @ 2:38pm

    If that is truly Cullerton’s plan, I don’t think the IL SC will buy it.

    Today, the State doesn’t have to give you a raise, but IF they do, it counts toward your pension and you still get your 3% AAI.

    So the Cullerton “choice” looks coercive to me, which would violate the standard for using “consideration” to modify a contract.

    That my opinion also. And I was right (as you were) about the ISC and how they would rule on both pensions and health insurance despite a few contrarian opinions on this site and the ‘heat’ I took in the Illinois Review.


  113. - tobor - Friday, Dec 9, 16 @ 4:35 pm:

    Honeybear=RNUG. Holy crap= This is what Rauner has always been about. Destroy the Union.


Sorry, comments for this post are now closed.


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