I stand corrected
Tuesday, Apr 9, 2019 - Posted by Rich Miller
* Background is here. From Amanda Kass, the Associate Director of the Government Finance Research Center…
Hi Rich:
Hope you are doing well. I was in DC for a week, so am a bit behind on things and just read yesterday’s post related to SURS (“Failing to learn from the past”). It struck me that the $13 million decrease figure isn’t really what should be used to account for the Governor’s proposed cut to the pension payments. The $13 million figure is calculated by comparing the FY2019 General Fund SURS contribution with the proposed FY2020 General Fund contribution. But, since the pension contributions are based on the existing funding law, in which the payments increase from year-to-year, the more important comparison is the Governor’s proposed FY2020 SURS contribution ($1.63 billion, all funds) with the certified FY2020 contribution ($1.86 billion, all funds)—looking at those figures for just SURS the proposed cut is about $225 million (so much higher than the discussed $13 million).
Amanda
- PublicServant - Tuesday, Apr 9, 19 @ 12:46 pm:
Amanda, good catch. JB, this shorting the pensions isn’t something you can just sweep under the rug. Stop with the new initiatives until you get the revenues from your progressive tax to fund them. If that means holding off for two years, so be it.
- Perrid - Tuesday, Apr 9, 19 @ 1:00 pm:
PublicServant, what “new initiatives”? Do you not want the 126 DCFS workers? Do you not want to meet the school funding formula increase? Besides that, I think the only actual discretionary new spending - that is substantial- is $100 million for early childhood, which has always been a passion of Pritzkers. And that would cover half of the SURS shortfall Amanda points out.
Question: I assume the certified amount is the amount the actuaries came up with using the law’s definition, not what the actuaries actually think is needed? Because otherwise it’s comparing apples and oranges, since the GA basically always ignores what the actuaries actually think is needed.
- Blue Dog Dem - Tuesday, Apr 9, 19 @ 1:04 pm:
Gov. Really Kick the Can.
- Captain Obvious - Tuesday, Apr 9, 19 @ 1:23 pm:
The can was deeply dented to begin with but J Bob is going to squash it flat.
- Ducky LaMoore - Tuesday, Apr 9, 19 @ 1:33 pm:
Pension payment obligations are rising $240 million a year? RNUG, I need help. Can you explain this to me?
- Anon - Tuesday, Apr 9, 19 @ 1:35 pm:
It is unreal that we are going to have to raise taxes big time just to cover a budget that is intentionally shorting the pension funds again.
Then in a few years when the can is so beat up it can’t be kicked we will be promised we need another newer, even bigger increase because of the pension costs that escalated that much further because he was purposely refusing to make the necessary contributions.
That folks is how you engineer a crisis out of thin air.
It is disgusting, but so par for the course as to just be normal at this point.
- Anon - Tuesday, Apr 9, 19 @ 1:36 pm:
It is disturbing that we are going to have to raise taxes big time just to cover a budget that is intentionally shorting the pension funds again.
Then in a few years when the can is so beat up it can’t be kicked we will be promised we need another newer, even bigger increase because of the pension costs that escalated that much further because he was purposely failing to make the necessary contributions.
That folks is how you engineer a crisis out of thin air.
It is sad, but so par for the course as to just be normal at this point.
- It's Amanda - Tuesday, Apr 9, 19 @ 1:38 pm:
Responding to Perrid @1PM. Yes the certified amount is the amount required under state law (so 90% target by 2045), and NOT what actuaries would recommend (100% in 20-30 years).
To compare what actuaries would recommend versus what’s req. under state law check out figure 3 in this report https://uofi.app.box.com/s/gmtq4ydc5j8xz8ipwj1mpyg90j1vgkqh It compares TRS Trustees’ recommendation versus state law requirement.
- Nonbeleiver - Tuesday, Apr 9, 19 @ 1:52 pm:
How does this compare to SERS and TRS?
Is this ‘cut’ for all the pension systems or just targeting SURS?
Anybody know?
- Sue - Tuesday, Apr 9, 19 @ 2:16 pm:
As I said yesterday - even JB’s rosiest progressive tax estimates given the new spending will hardly dent the unfunded liabilities. Actually they will be going up with only 3.2 billion in new revenues not all of which are pension monies. JB will need to catch up since he is foregoing the ramp required numbers. In a few years the Dems will tell us they actually need 6.4 billion which will bring every taxpayer other then the bottom rungs into the realm of tax increases. The math is unrefutable
- Keyrock - Tuesday, Apr 9, 19 @ 2:35 pm:
Meet the new boss.
(Almost) same as the old boss.
- PublicServant - Tuesday, Apr 9, 19 @ 2:37 pm:
Perrid, the pensions are not a piggy bank. Don’t short the pensions to fund anything. That’s what got us into this mess in the first place. I you need revenue now, raise taxes to fund things thats are important. Every dollar you short pensions this year means you owe $1.08 on that shortfall next year. Important programs are expensive as it is. Don’t make them more so by borrowing. Period.
- A 400lb. Guy on a bed - Tuesday, Apr 9, 19 @ 6:12 pm:
Amanda is no ck.