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Tuesday, Nov 19, 2019

* Greg Hinz was at Gov. Pritzker’s appearance today at the Economic Club

Insisting that “no silver bullet” exists to slay Illinois’ staggering public pension problems, Gov. J.B. Pritzker today flatly rejected the idea of tying constitutional pension reform to his proposed graduated income tax. […]

For instance, the most commonly discussed pension change that a constitutional amendment would allow is eliminating the current guaranteed 3 annual percent compounded COLA increase in benefits. But slashing that figure roughly in half to match today’s actual inflation rate “does not solve” the state’s current $133.5 billion unfunded pension liabilities, Pritzker said. “It doesn’t.” […]

Moreover, even getting such a proposition to voters would require a three-fifths approval of the House and Senate, both of which are controlled by union-friendly Democrats, Pritzker continued. Voters then would have to enact the change in a referendum by at least the same three-fifths vote.

“If you did all of that, if you could get it through . . . you will then face the U.S. Constitution’s contracts clause,” which holds that contracts cannot be dismissed by legislative fiat. That’s significant because the Illinois Supreme Court has ruled that the government worker pensions here are an enforceable contract.

The key political numbers here are 71, 36 and 60. It’ll take 71 votes in the House, 36 votes in the Senate and 60 percent of voters to make this happen. If someone wants to show me a doable roll call in the overwhelmingly Democratic General Assembly and sound polling of likely Illinois voters, then I’ll listen. Until then, this ain’t going anywhere.

- Posted by Rich Miller        

54 Comments
  1. - Donnie Elgin - Tuesday, Nov 19, 19 @ 3:03 pm:

    Truer words were never spoken…

    ” the House and Senate, both of which are controlled by union-friendly Democrats”

    Pension reform is unfortunately purely a political issue in Illinois.The numbers don’t seem to matter.


  2. - Montrose - Tuesday, Nov 19, 19 @ 3:03 pm:

    I don’t understand why Greg is reporting it like this is new information or he expect Pritzker to respond differently. I get that he is playing to Crain’s base, but it just looks silly.


  3. - Grandson of Man - Tuesday, Nov 19, 19 @ 3:03 pm:

    It’s best that we finally dismiss the ludicrous notion that the state constitution will get amended for pension reform. If certain people want to continue deluding themselves, they can keep having at it.

    We’ve already done pension reform, and with the current political make-up it’s clear that we’re not going back to cut public servants. The people who’ve not contributed more revenue are the upper-income folks and the wealthy. It’s time, finally, to tax them more.


  4. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:06 pm:

    === The numbers don’t seem to matter.===

    The numbers are 71/36… 60 and they matter.

    Numbers matter, so do elections.


  5. - NotRich - Tuesday, Nov 19, 19 @ 3:08 pm:

    Maybe Mr Hinz had a recent phone call with his old buddy Bruce Rauner…


  6. - Skeptic - Tuesday, Nov 19, 19 @ 3:09 pm:

    “Pension reform is unfortunately purely a political issue in Illinois.” If you call “obeying the law” political, then yes it is.


  7. - Chicago Cynic - Tuesday, Nov 19, 19 @ 3:10 pm:

    He’s 100% correct. And further, I’ve never seen a statewide poll showing even majority support for the proposition, let alone 60%. It’s a Tribune edit board fantasy. Not reality.


  8. - Steve - Tuesday, Nov 19, 19 @ 3:12 pm:

    - Grandson of Man -
    The top 20% of state income earners are paying over half the state income tax haul recently. Now you can argue you want them to pay more. But, saying they aren’t paying their fair share is extremely inaccurate. Hoping that Bernie and Liz wealth tax isn’t passed: that will be less money to get from rich people at the state level.

    https://tinyurl.com/uojv8t9


  9. - Perrid - Tuesday, Nov 19, 19 @ 3:12 pm:

    “The numbers don’t seem to matter”

    The law doesn’t seem to matter to you, so I guess that’s the game all around.


  10. - LTSW - Tuesday, Nov 19, 19 @ 3:14 pm:

    As Gov Bevin of Kentucky found out, making teachers mad will get you voted out.


  11. - Michelle Flaherty - Tuesday, Nov 19, 19 @ 3:16 pm:

    And if such a thing were to happen we could then all get an extended education in the meaning of the federal contracts clause and why even a constitutional amendment wouldn’t do what the advocates for one want.

    But hey, they pension lawsuit lawyers need a new line of revenue so why not waste a few more years and few more million banging our heads against the walls rather than own up to paying the bills.

    I mean I wish I could sue someone to make my mortgage go away too.


  12. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:19 pm:

    So, - Steve - goes full IPI with his link, explains a lot.

    The Illinois Policy Institute is the “bad guys” version of the Headpiece of the Staff of Ra in “Raiders of the Lost Ark”

    The “bad guys” got some info from the burns on the hand, it explained what kind of wooden staff is needed, the height, etc., to dig to find the Ark of the Covenant.

    Indiana Jones, he had the headpiece, with the writings on both sides, revealing the whole truth, and how to find the prize.

    “They’re digging in the wrong place”… lol

    If you ever need half if the story with a solution predicated on that half, your go to the IPI.

    Spoiler: Indy found the Ark. Indy has the whole picture.

    To this “worry” about the 3%, the only ones effected by the progressive income tax, please, do ads, make it about the “poor wealthy souls”… make it about the wealthy keeping money.


  13. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:22 pm:

    Also, to bring it back..,

    The Democrats got 71, got 36, the process exists for any pension changes, but please, as Rich asks, show me those roll calls. I’d be surprised to see 71 and/or 36 for pensions… anytime soon.


  14. - Anonymiss - Tuesday, Nov 19, 19 @ 3:24 pm:

    “The people who’ve not contributed more revenue are the upper-income folks and the wealthy”

    The people who’ve not contributed are the last 30 years of Illinois Legislators’


  15. - A State Employee Guy - Tuesday, Nov 19, 19 @ 3:29 pm:

    On the other hand, you’ll never get an amendment without first making a lot of persistent noise.


  16. - JB13 - Tuesday, Nov 19, 19 @ 3:30 pm:

    – If you did all of that, if you could get it through . . . you will then face the U.S. Constitution’s contracts clause,” which holds that contracts cannot be dismissed by legislative fiat –

    You all keep saying this, but show me an example anywhere in the country where that has stopped pension reform. Arizona just did what the reformers want to do here. So where’s the lawsuit? No union is willing to challenge it? Shouldn’t that tell you something?


  17. - DuPage Saint - Tuesday, Nov 19, 19 @ 3:38 pm:

    It is not a cola it never was a cola and will never be a cola
    It was an agreed amount of annual increase. It has nothing to do with inflation and is not adjusted. So said the Illinois Supreme Court


  18. - SSL - Tuesday, Nov 19, 19 @ 3:41 pm:

    It’s the answer now and forevermore. The will be no pension reform. Just let it go and spend your time and energy on things you can change. If it bothers you that much, move elsewhere.


  19. - Oak Dale - Tuesday, Nov 19, 19 @ 3:45 pm:

    The “show me the roll call of 36/71” defense is just the thing the President and Speaker want. It gives their members in marginal districts a chance to have it both ways, telling fed-up voters that they’re open to it but never have to vote to show either way. As a corollary, show me a roll call of 36/71 on term limits - and then show me who wants to actually take a roll call vote and have to defend to voters why they voted No. You can’t use a 36/71 roll call argument if you never allow a roll call vote to happen. You got them to pass a capital bill this year and that roll call wasn’t finalized until minutes before the vote. Didn’t stop everybody from talking about it, negotiating, and working on various packages for months before that.


  20. - Michelle Flaherty - Tuesday, Nov 19, 19 @ 3:46 pm:

    JB13, the unions in AZ didn’t sue because they were involved. Let me know when AFSCME joins forces with IPI.

    In Arizona, a traditionally conservative state where labor isn’t as powerful as in the East and Midwest, unions stepped outside their traditional stance and pushed for a solution, endorsing an amendment to constitutional restrictions that stood in the way. They teamed up with a libertarian think tank.

    https://www.chicagobusiness.com/crains-forum-pensions/how-arizona-rhode-island-broke-mold-pension-dispute


  21. - former southerner - Tuesday, Nov 19, 19 @ 3:48 pm:

    Not sure about the other retirement systems but for SURS the 3% AAI also mandated an increase in the employee monthly contribution so university employees paid an additional amount specifically for that each month. Back when I was a young republican, it wasn’t the party of grifters and con artists but the modern GOP has become a hangout for the dregs and rightfully is on its way to extinction as its current core ages out and dies.


  22. - R A T - Tuesday, Nov 19, 19 @ 3:48 pm:

    JB is so silly. Not following Rauner and just saying something meaningless and mean? How can you govern if you think? Silly JB.


  23. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:48 pm:

    === As a corollary, show me a roll call of 36/71 on term limits - and then show me who wants to actually take a roll call vote and have to defend to voters why they voted No===

    Rauner has every chance to do so, why didn’t he, to embarrass the Dems, put them on the stairs?

    Because term limits and fair maps were a Rauner scam to get names.

    === You got them to pass a capital bill this year and that roll call wasn’t finalized until minutes before the vote.===

    … yet it passed, but if you’d like to show that 71 and 36, have at it.


  24. - Donnie Elgin - Tuesday, Nov 19, 19 @ 3:52 pm:

    “move elsewhere”

    The one move not dictated by 71, 36 and 60


  25. - Tominchicago - Tuesday, Nov 19, 19 @ 3:52 pm:

    Given the breadth of the IL S. Ct’s decision in the pension case, I don’t think even a constitutional amendment could deprive vested pension entitilees of the 3% bump.


  26. - Steve - Tuesday, Nov 19, 19 @ 3:53 pm:

    OW

    How scary those Illinois Department of Revenue numbers are. It doesn’t matter who quotes them. Facts are stubborn things.


  27. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:54 pm:

    - Steve -

    Hee Haw somewhere else.

    Thanks.


  28. - Oswego Willy - Tuesday, Nov 19, 19 @ 3:56 pm:

    === Hee Haw somewhere else.===

    Not at me.


  29. - Ares - Tuesday, Nov 19, 19 @ 4:01 pm:

    Pensions are one way to attract bright young people to state / local public service. The Tier II / III pensions will sooner or later have to be upgraded to meet Federal requirements, and the Tier I pension(er)s will gradually die away over time. Any pension savings, moreover, would be squandered on tax breaks for Amazon or other large monopolists. Messing with pensions is / should be a political third rail.


  30. - A State Employee Guy - Tuesday, Nov 19, 19 @ 4:16 pm:

    Tom— the IL SC decision would have no bearing on the issue of whether the Contracts Clause prohibits a change to pension even after an amendment. Federal question.


  31. - A State Employee Guy - Tuesday, Nov 19, 19 @ 4:18 pm:

    Another way to attract talent is to pay a higher salary, maybe perhaps with some performance pay. For those two things, and a generous employer 401k match, I’m certain most youths will be okay with a pensionless position.


  32. - Oswego Willy - Tuesday, Nov 19, 19 @ 4:19 pm:

    === after an amendment===

    … and after 71 and 36 vote Green on the amendment.

    It comes back to the premise. Again.


  33. - Steve - Tuesday, Nov 19, 19 @ 4:19 pm:

    OW

    Those Illinois Department of Revenue numbers really bring out your amazing persuasive eloquence with numbers. .. The Raiders of the Lost Arc and Hee Haw. I was sort of expecting the discounted present value or the volatility assumption of the Black Scholes model. I hope female teachers don’t have to become creditors of the state of Illinois because many of them do live to 90.

    https://tinyurl.com/uohmrq4


  34. - Demoralized - Tuesday, Nov 19, 19 @ 4:22 pm:

    ==Arizona just did what the reformers want to do here.==

    Arizona isn’t Illinois. I think that’s been discussed here multiple times.


  35. - Demoralized - Tuesday, Nov 19, 19 @ 4:24 pm:

    Steve:

    If you want to make the argument about the percentage of total tax revenues wealthy people pay be my guest. I don’t think you’ll get very far using that as an argument against the progressive income tax.


  36. - Oswego Willy - Tuesday, Nov 19, 19 @ 4:29 pm:

    - Steve -

    Move on from me. I’m done.


  37. - letsbeadults - Tuesday, Nov 19, 19 @ 4:37 pm:

    Forget the constitutional change- We just need the General Assembly to authorize municipalities in Illinois to file for Chapter 9. I know there is no chance, but this solves the problem, one municipality at a time.


  38. - Ares - Tuesday, Nov 19, 19 @ 4:43 pm:

    Our current pension dilemma exists due to State government’s failure of pay the employer match for generations. Nevertheless, thought should be made of how to better attract new (non-politician / politician-related) blood to State / local gov’t service. No modern society can survive without a competent civil service, as is being made clear in the current impeachment hearings in DC.


  39. - Jocko - Tuesday, Nov 19, 19 @ 4:45 pm:

    ==saying they aren’t paying their fair share is extremely inaccurate==

    Is Steve handling Todd Ricketts property tax appeal?


  40. - TominChicago - Tuesday, Nov 19, 19 @ 5:02 pm:

    Retired Guy - A change in pensions would still have to comport with Illinois law as well. And I have my doubts well regarding the fed constitution as it would likely violate the contracts clause and the due process clause of the 14th amendment. You would be depriving pensioners in their vested rights in the bump.


  41. - Rogermortimer - Tuesday, Nov 19, 19 @ 6:08 pm:

    My issue with the Fair tax is a practical one. Sure, tax the 3 percent, and maybe, maybe not, we can see if increased marginal taxes are exogenous to productivity. The State id broke so arguing against more revenue is difficult in any event. But the Fair tax will bring in $3.2B? That is a drop in the bucket against Illinois enormous unfathomable debt. Sure, the law is the law, but numbers matter too? In the next recession, can Illinois really afford to go on pay go status on pensions? Taxes would have to be unthinkable, crushing working people.


  42. - PAM - Tuesday, Nov 19, 19 @ 6:39 pm:

    People do not understand that the ONLY thing wrong with the pension is politicians rob from the pot and never pay it back. No reform is needed. Lock up the pension fund and make it criminal if the politicians do not pay it back or to ever touch it in the future.


  43. - Blue Dog Dem - Tuesday, Nov 19, 19 @ 7:10 pm:

    Folks like the governor love pushing the can down the road. Heres the deal 2022. Governors own. Jb will have to run on the unfixable. Thank goodness the Trump economy has at least postponed the inevitable.


  44. - RNUG - Tuesday, Nov 19, 19 @ 7:53 pm:

    == … Until then, this ain’t going anywhere. ==

    Even with 71/36/60% it’s not going anywhere unless you can find 4 or more non-existent votes on the Illinois Supreme Court to uphold the eventual challenge.


  45. - RNUG - Tuesday, Nov 19, 19 @ 8:10 pm:

    == Arizona just did what the reformers want to do here. ==

    Not quite the same language, plus the modifying phrasing is not as tightly tied together. It was implied, not stated, that the pensions were a contract. Those things matter; Arizona had to have a actual court case to decide if the pension was actually a contract.

    Illinois and New York EXPLICITLY state the pension is a contract, removing any doubt about legislative or voter intent to invoke the US Contracts Clause.


  46. - supplied_demand - Tuesday, Nov 19, 19 @ 8:49 pm:

    - Rogermortimer -

    The present value of 30 years of $3.2 billion in increased taxes is $72 billion. In reality, it would be higher because the $3.2 will grow with incomes. Either way, that’s about half the pension liability (a big drop in the bucket).


  47. - City Zen - Tuesday, Nov 19, 19 @ 9:00 pm:

    ==unless you can find 4 or more non-existent votes on the Illinois Supreme Court==

    The court led by Chief Justice Burke? That won’t help JB’s case in the court of public opinion.


  48. - Oswego Willy - Tuesday, Nov 19, 19 @ 9:01 pm:

    === That won’t help JB’s case in the court of public opinion.===

    … and yet, the legality, and that take, remains the same.


  49. - Anyone Remember - Tuesday, Nov 19, 19 @ 10:26 pm:

    71, 36, and 60 … and then the Federal Contracts Clause. The IPI pushes this, not because of pensions, but to gauge the test of strength of public sector unions in Illinois.


  50. - ArchPundit - Tuesday, Nov 19, 19 @ 11:26 pm:

    What’s baffling to me about this whole thing is that Tier 2 and Tier 3 (with questions of whether 3 is sufficient) for any new employee make the system more sustainable. Illinois is going to pay those who entered the workforce before that one way or another.


  51. - Da Big Bad Wolf - Wednesday, Nov 20, 19 @ 6:34 am:

    == The court led by Chief Justice Burke? That won’t help JB’s case in the court of public opinion.==
    Stretching my head over that one. What does Pritzker have to do with Justice Burke?


  52. - Paul Powell's Shoebox - Wednesday, Nov 20, 19 @ 8:11 am:

    Politically you are right on the path numerically, but you forgot the letter side of the equation that could change things dramatically, the 4 letters being R, I , C and O


  53. - Huh? - Wednesday, Nov 20, 19 @ 8:12 am:

    Does anyone remember the pension holidays when the legislature didn’t pay the State’s share of the pension premiums?

    Illinois has had a pension problem since time immemorial. Somehow the state has managed to shuffle along and still pay the pensions.


  54. - Steve - Wednesday, Nov 20, 19 @ 8:48 am:

    - Jocko -

    You brought up the subject of property tax appeals for Ricketts. I think the phone calls between Ed and Anne Burke will clearly show I’m not now or ever been in the property tax appeals business.


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