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Can’t this state ever do anything right?

Friday, Jul 19, 2019 - Posted by Rich Miller

* Civic Federation a little over a year ago…

The assumed reductions in State pension contributions are the result of three provisions in the FY2019 budget legislation. The most important is a voluntary buyout plan that offers certain employees who are about to retire upfront cash payments—in exchange for delayed and lower automatic annual increases in their benefits. The plan accounts for $382 million, or 86%, of the total budgeted State pension savings for the fiscal year that began on July 1, 2018.[1]

Public records show that the $382 million figure comes from actuarial reviews of a different pension buyout plan. As a result, it is not clear whether the savings estimate applies to the enacted measure. Even if the savings estimate is relevant, it remains to be seen whether the assumed participation rate of 25% is realistic.

The $382 million savings estimate is based on actuarial reviews of House Bill 5472. The measure has not come up for a vote in the General Assembly, but the actuarial studies were prepared by the pension funds at the legislature’s request in advance of a public hearing last February. There was no public hearing on the enacted pension measure. [Emphasis added.]

I totally missed that story last year.

* And now…

A new pension buyout plan designed to save hundreds of millions of dollars for the State of Illinois in the fiscal year that just ended actually generated relatively minor savings in FY2019 and does not appear likely to meet the annual cost-reduction target over the next few years.

The shortfall has occurred despite robust participation by members of the State Employees’ Retirement System (SERS), the pension fund that was supposed to account for most of the savings. The problem stems from the original savings estimate, which was overstated because it was based on a different buyout plan and further inflated due to technical miscalculations, according to SERS officials. […]

Actual General Funds savings are now pegged at about $13 million, largely from the COLA buyout at SERS, according to recent reports by the three pension funds. […]

To pay for the buyouts, the State was authorized to sell up to $1 billion of bonds. So far, the State has issued $300 million at an interest cost of 5.74%. Of the $298.5 million in net proceeds, records from the Illinois Comptroller’s website show expenditures of $29.6 million for buyouts at SERS and $1.6 million for buyouts at TRS. SERS reports having spent an additional $17.6 million in FY2019, which is not yet reflected in the Comptroller’s records. The remaining bond proceeds continue to cost the State interest, but have not yet resulted in any pension savings.

So, we’ve got a big pile of borrowed money just sitting there piling up interest and a cost savings projection that is wildly out of whack.

Just ducky.

…Adding… Hannah Meisel at the Daily Line wrote about this last week and I missed it somehow. Click here.

18 Comments

*** UPDATED x1 *** Madigan contributions examined

Friday, Jul 19, 2019 - Posted by Rich Miller

* Speaker Madigan loves moving campaign money around. He’ll have an entity (often a union) “park” cash in a member’s account and then eventually have that member write a check to a candidate or to the state party or wherever. It’s mostly designed to legally get around the campaign contribution caps, but it’s sometimes about avoiding putting his own name on a contribution.

Rep. Anna Moeller (D-Elgin), for instance, received four contributions of about $50K each last year, even though she didn’t need the dough for her own campaign.

Also, as I told subscribers earlier this month, Madigan recently wrapped up a series of meetings with incumbents and staff designed to prepare for potential primary campaigns.

* With that in mind…

Seven legislators gave Mike Madigan a whopping $751,400 within the last few weeks — just as the powerful Illinois House speaker’s legal bills mount and federal investigations touch some of his allies.

The lawmakers who spoke to the Chicago Sun-Times about what for most were six-figure donations insist it’s business as usual, routine fundraising by the powerful Southwest Side Democrat, who also serves as Illinois Democratic Party chairman.

“I’ve contributed to others in the past at similar levels,” said state Rep. Anna Moeller, D-Elgin, who gave $57,800. “It wasn’t out of the ordinary.”

What is out of the ordinary is Madigan’s growing legal bills.

So far this year, the speaker has spent $453,608 on lawyers from his campaign fund. Many Illinois politicians dip into their political accounts to pay legal expenses, but the amount Madigan has spent is raising eyebrows.

The legislators interviewed did not ask why Madigan needed the money.

We discussed Madigan’s unprecedented legal expenses on Tuesday. But Friends of MJM ended the quarter with $7 million in its account. Madigan’s 13th Ward committee ended with $1.4 million.

This could be about his legal bills, or it could just be what Rep. Marcus Evans told the Sun-Times about it being for primary races.

But it’s exactly the sort of story to expect when the feds are circling above.

* Related…

* Zorn: Sham candidates are bad for democracy, but let’s not make a federal case of it: Gonzales’ belief that he would have won a head-to-head matchup against the powerful veteran House speaker is based on the idea — and let’s just go out on a limb and call it a delusion — that a decisive number of voters and prospective funders were scared off by the prospect of a three-way split of the Hispanic vote.

*** UPDATE *** I forgot about this…

People connected to Madigan raided by the FBI:

Kevin Quinn
ex-Ald. Michael Zalewski
Michael McClain

What does Madigan’s chief fundraiser @GovPritzker have to say about this?#twill https://t.co/OUtEw3kpAr

— Illinois Policy (@illinoispolicy) July 18, 2019

I asked the governor’s office for a response…

The governor has said previously there is an ongoing investigation and we need to see how that plays out.

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*** UPDATED x1 *** ILGOP slams Pritzker for going around federal gag rule

Friday, Jul 19, 2019 - Posted by Rich Miller

* As we discussed yesterday, the governor made yet another announcement on an abortion-related topic…

llinois is preparing to cover federal health care funding that’s being threatened by a new Trump administration rule banning family planning clinics from referring women for abortions.

Gov. JB Pritzker announced Thursday that the Illinois Department of Public Health will use state money to cover the 28 health care providers that currently receive Title X grant money, should the “gag rule” remain in effect through the end of the fiscal year.

* Reuters…

(T)he Illinois Department of Public Health will provide state funding to the 28 local clinics that normally receive Title X money through the agency, making up for an estimated $2.4 million in federal dollars they otherwise stand to lose for the rest of the fiscal year, Pritzker said.

* Illinois Republican Party spokesman Joe Hackler sent out this statement late yesterday afternoon while I was out of the office…

Notwithstanding aggressive obfuscation in the Pritzker administration’s PR surrounding this decision, the truth is really quite clear.

In a state struggling financially, Governor Pritzker would rather turn away federal money funding life saving non-abortion related medical care for women and girls because of his unrivaled zeal for forced taxpayer funding of abortions.

This episode highlights exactly how extreme Illinois is in dealing with abortion. Our state now allows abortion for almost any reason up until the moment of birth and taxpayers who find this unconscionable, must pay for the procedures. Despite this policy being wildly out of step with the public’s views, the Governor is willing to forgo millions of federal money for women’s health and defy a court ruling in order to preserve it.

* I asked the Reproductive Health Act sponsor Rep. Kelly Cassidy (D-Chicago) for a response…

It is disappointing to see an entire political party seek to deny critical health care to women across Illinois. This tired rhetoric is factually wrong and just bad policy. These funds support care for women that protects their health and advances families. My Republican friends in Illinois have not been helped by blindly following Trump policies. They might want to consider that reality in this moment.

*** UPDATE *** Washington Post…

The Trump administration is considering backtracking on an announcement this week that immediately required federally funded family planning centers to follow new rules banning referrals for abortion, amid widespread confusion among clinics about the changes.

A federal health official overseeing the family planning program told more than 200 leaders of reproductive health organizations gathered this week in Washington that she wanted to give them 60 days to comply with the rules and that federal lawyers were reviewing the idea, according to three participants in the closed meeting and others who were told afterward.

Those comments Thursday, by Department of Health and Human Services official Diane Foley at a conference for recipients of the family planning grants, created new turmoil in the administration’s efforts to restrict the program known as Title X, a government program that started in 1970 and pays for reproductive health services for about 4 million poor women and girls annually.