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*** UPDATED x1 *** Batinick says he has bipartisan support for pension proposal

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* Press release…

State Rep. Mark Batinick (R-Plainfield) is ready to file new legislation to address the state’s mounting unfunded pension liability. In his first year as a legislator, Rep. Batinick proposed for a series of hearings on offering a lump sum buyout option to current and future annuitants nearing retirement, and spoke about the benefits of this initiative on Fox News Chicago and other local outlets. Now he is prepared to push out the legislation that could potentially net the state billions in long-term savings, while paying owed pensioners.

“Many of those nearing retirement may be attracted to having more control over their retirement assets,” Rep. Batinick said, “Yet unfortunately the State does not provide a versatile and competitive alternative to the current pension arrangement. Providing a lump sum payment in exchange for all or a portion of an annuity would provide a voluntary, constitutional approach to addressing the State’s pension obligations, while simultaneously providing participants the options and flexibility needed when planning for retirement.”

In their May ruling declaring the pension reform bill signed into law by then-Governor Pat Quinn in December 2013 unconstitutional, the Illinois Supreme Court laid a framework for the adjustment of benefits through a legal approach called “consideration,” which allows for the adjustment of benefits if both parties agree to the changes. Rep. Batinick’s proposal to offer annuitants a lump sum option would meet this requirement by making any proposed buyout program voluntary.

Underscoring the need for bipartisan action on pension reform, the Commission on Government Forecasting and Accountability (COGFA), has calculated the total unfunded pension liabilities of the State retirement systems at $111.2 billion as of June 30, 2014, based upon the actuarial value of assets.

Rep. Batinick has filed the legislation and collected bipartisan support from Representatives Morrison, Jesiel, Sente, and Wehrli, all of whom oversee the Pensions Committee. Representatives Martwick, David Harris, Franks, McDermed, and Andersson have also added their support.

Thoughts?

*** UPDATE *** From Rep. Batinick…

Rich,

I’d like to address some of the comments in the thread. They are comments I have heard for months.

1. Why would a retiree take an accelerated payment?

    A. There are federal tax consequences to taking a monthly annuity. Rolling some or all of your “net present value” into an IRA allows that money to grow tax free. You can also structure your income so that you still qualify for a property tax freeze. Two pensioners from the household may have large federal tax bills. This provides flexibility.

    B. You can’t will a pension. Some people would like to pass on something to the next generation. You can will an IRA.

    C. I’m sure some people would simply like to “take their money off the table”. Can you blame them when you look at how the state operates?

    D. Many of the “net present values” are well over $1M. We are not talking about small sums.

    E. Some people would just prefer to control their own finances.

2. How does the state save money? The accelerated benefit would be offered at a 25% discount to the state.

3. Can the state afford it? The bill limits the number of people each year by making it an election at retirement time. Only those retiring will be presented this option. This prevents a “rush to the door” while also focusing on the group that would help cash-flow the most. It’s more expensive for the state to not do the deal.

I discussed this plan with several state employees and CPA’s. The concept is sound and well-liked by both.

This has often been offered in the private sector. There it has always been an all or nothing deal. My bill offers a partial payout. This I believe is key. Many people would like to have the stability of a pension but maybe also some lump sum that they can will to the next generation or use for whatever they wish.

  115 Comments      


*** UPDATED x1 *** Legislator calls for reason, is whacked by state party

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* These guys are so hair-trigger thin-skinned…

The Illinois Republican Party today called on State Rep. Elaine Nekritz (D-Northbrook) to identify which specific reforms proposed by the Governor she would support as part of a bipartisan agreement to balance the state budget.

In a news report by the Illinois News Network, Rep. Nekritz said “the fix must include several things: reforms, cuts and revenues,” but in the same breath “criticized the governor and Democratic leaders for digging in their heels” — as if she is somehow independent from “Democratic leaders” and not a part of the impasse.

“In Northbrook Rep. Nekritz pretends to be independent from Mike Madigan, but in Springfield she’s one his top lieutenants,” ILGOP Executive Director Nick Klitzing said. “She can’t have it both ways, claiming she supports non-specific reforms while blaming the abstract ‘Democratic leaders’ for digging in their heels. She votes to elect Mike Madigan speaker, so unless and until she publicly identifies the specific reforms she could support, she is equally responsible for gridlock and decline as Mike Madigan. If Elaine Nekritz is truly independent, now’s her chance to stand up to her ‘Democratic leaders’ and publicly outline which of the reforms proposed by the governor she believes are ‘the levers that have to be pulled in order to get out of this.’”

As a reminder, Governor Rauner has asked legislators to support six reforms to help turnaround Illinois: legislative term limits, redistricting reform, local control of bargaining and bidding, workers’ compensation reform with causation, lawsuit reform and pension reform.

Here is what she actually said…

Democratic Representative Elaine Nekritz says the fix must include several things: reforms, cuts and revenues.

“Those are the levers that have to pulled in order to get out of this and it’s just not that hard if reasonable people will come together.”

Apparently, there’s no hope for reasonableness from the IL GOP.

Sheesh.

*** UPDATE *** From the state party…

Rich,

I am emailing to follow up to your post regarding the ILGOP press release.

We are also calling for “reason.” We are asking for legislators like Rep. Nekritz to tell the Governor and Republican House members what they would agree to rather than waiting for permission from Speaker Madigan. Rep. Nekritz is blaming Democratic leaders for not compromising, but then she’s not doing anything about it.

We are simply asking for someone - anyone - to have the courage to speak up and meet us in the middle with substantive reform ideas.

Thanks,
Nick

Yeah, that’s exactly what they’re doing. Encouraging her to meet in the middle.

Right.

Sorry, but one doesn’t “encourage” an elected state legislator to compromise by using a misanthropic rhetorical club.

  83 Comments      


*** UPDATED x1 *** A sign of the times?

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* From the press room…

Reps. Demmer and Guzzardi have canceled their Thursday 10:00 a.m. press conference. The topic of the press conference was the “Future Caucus.”

Apparently, Illinois’ future ain’t ready for a caucus.

*** UPDATE *** The press release…

On Thursday, a dozen young legislators in the Illinois House will announce the launch of the Illinois Future Caucus.

The Future Caucus is a bipartisan group of young leaders who believe that cooperation, not conflict, should be the dominant political paradigm, and who are committed to working together to address the challenges facing the next generation of Illinoisans. Its founding co-chairs are Rep. Will Guzzardi (D-Chicago) and Rep. Tom Demmer (R-Dixon).

The group will work in conjunction with the Congressional Future Caucus and similar groups in eleven other states.

Also attending the press conference will be Steven Olikara, the founder of the Millennial Action Project, the group that coordinates the Future Caucuses around the country. Olikara is flying out from Washington, D.C. to lend his support to the new group.

WHAT: Press conference announcing the launch of the Illinois Future Caucus

WHO: Reps. Guzzardi and Demmer and colleagues from both parties and from around the state; Steven Olikara, founder, Millennial Action Project

WHERE: Blue Room at the Thompson Center

WHEN: Friday, January 15, 10:30 a.m.

Notice how the space time continuum is messed up in that release? They’re launching it on “Thursday” with a press conference on “Friday.”

Heh.

  39 Comments      


Jail on lockdown after staff doesn’t show up

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* What the heck?…

The Cook County Jail is on lockdown.

The sheriff’s office reports 18 percent of the jail’s staff did not show up for their 7 a.m. shift Tuesday.

In order to keep corrections officers safe, all inmates must remain in their cells unless they have a health issue or courtroom visit scheduled.

…Adding… Tribune…

The 142 correctional officers gave reasons ranging from illness and family issues to the weather for not showing up for the 7 a.m.-to-3 p.m. shift, according to Cara Smith, a spokeswoman for the Cook County sheriff’s office.

Smith said jail officials attempt to “avoid lockdowns at all costs,” but they are not uncommon because of understaffed shifts. “I would say it happens maybe once a month, maybe more frequently,’’ she said.

On an average Tuesday first shift, about 83 of 794 workers take the day off, Smith said.

“They have lives and kids like the rest of us do,’’ Smith said. “Our staff have very difficult jobs working at the jail. It’s a delicate balance.”

  57 Comments      


A quick look ahead

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* Finke…

Rauner said he will continue to press his “turnaround agenda” this year and plans to announce some new proposals shortly. They will include initiatives for education reform and purchasing reform, he said.

“Hopefully, they will be more quickly adopted, but we’ll see,” he said.

…Adding… He previewed some of his education reforms last fall…

Throughout the conversation, he expressed disappointment surrounding the need to address the Illinois fiscal crisis before turning to education agenda items such as opportunity scholarships, course choice access, lifting the charter school cap, and Education Savings Accounts (ESAs) for students with special needs. Rauner also predicted that the strength of the teachers unions throughout Illinois will set the stage for a political battle when these items emerge next year.

“I wish I was pounding right now on education bills in the legislature. I can’t do everything at once, I’m pretty good but I’m not that good,” he joked.

Hat tip to a commenter.

* Riopell…

Rauner suggested changes in how the state funds schools could be part of a budget deal. Previously, House Republican Leader Jim Durkin of Western Springs said that would have to be put off, but Democratic Senate President John Cullerton has said the effort should continue.

“If he says … let’s have the funding formula be part of our grand bargain now, that’s fine,” Rauner said. […]

Suburban mayors who fear their share of income taxes will be slashed to cover the state’s deficit in a final budget deal will have to keep watching.

“I don’t want to speculate about what the final budget numbers would look like,” Rauner said. “We’ve talked about certain reductions at certain levels from (the local share). My preference is not to have to do that.”

“As part of a grand bargain, I’m not going to sit here today and say what will or won’t be in any final (budget),” he said.

  16 Comments      


*** UPDATED x2 - Transcript - New audio link *** Five questions for Rauner

Tuesday, Jan 12, 2016 - Posted by Rich Miller

* I decided to use some of your questions from yesterday when I interviewed Gov. Bruce Rauner, although I kinda modified a few…

What is your single most significant accomplishment as governor?

In October of 2014, you said, “Pushing any specific labor regulation is not my priority at all.” What changed?

Do you have any specific data about what the return on investment would be for your Turnaround Agenda?

If you accept the fact that neither you nor Speaker Madigan are going to compromise your basic principles, do you think it’s time to try something different to break this stalemate?

Are you willing to go four years with no state budget if you don’t get want you want on your agenda?

* Before you listen to his answers, a warning. I took Oscar with me because he loves the grounds at the governor’s mansion, but he didn’t get a chance to run around before the interview. Stella, the Rauner family dog, wasn’t in town, either, so he was looking all over for her.

The bottom line is Oscar started barking toward the end of the interview. Loud. Insistently loud. The little guy really wanted to go outside and play. So, end of interview.

* Click here to listen.

*** UPDATE 1 *** We killed the audio link because too many people clicked it. Try clicking here instead.

* And here’s a photo of Oscar tearing up the turf, post interview…

Gov. Rauner sat for other interviews, and we’ll have more on them in a bit.

*** UPDATE 2 *** A reader put together a “rush” transcript…

Miller: I saw your op-ed in the SJ-R, but what do you think so far in one year has been your single most treasured accomplishment?

Rauner: I really have to say three: Having a “world record” education fundin’ for Illinois – most we’ve ever had despite no budget. That’s a big deal to me. Gettin’ innovative contracts with the 17 unions. That’s a big deal. And then saving over $700 million from the operating costs of the government.

Miller: Number one, though, all the Republicans voted against that bill and then you signed it – any regrets on that?

Rauner: None at all. We need education funding.

Miller: In October of 2014, you said to IRN “pushing any specific labor regulation is not my priority at all.” So what happened? What changed?

Rauner: Nothing has changed. Why do you say something has changed?

Miller: Well you have been pushing for different labor laws.

Rauner: You and a couple of the other guys don’t see the difference. I’m not sayin’ that communities can’t collectively bargain. I’m not sayin’ collective bargaining rights get stripped away. I’m not sayin’ that people can’t join unions. A lot of communities agree with you and others and they want to pay more taxes for prevailing wage. Terrific! They want to pay higher taxes to support collective bargaining in government. Terrific! I got no problem, I just don’t want one community telling another community how to do it. That’s not advocating some labor law.

Miller: Well it is.

Rauner: It’s not – it’s local control of government, not a labor law. That is democracy at work, getting the democracy to the level of the people. This is empowering the people of Illinois - that is what the agenda is about. 100%

Miller: One of the things that several of my commenters have been asking for months, including one of the top commenters I have on the blog, is do you have any –

::Oscar barks, making his presence known::

Miller: Oscar stop.

Miller: Do you have any specific data about what the return on investment would be on your Turnaround Agenda? For instance, what is the benefit to the state in dollars and cents for your agenda?

Rauner: We have quantified a lot of that stuff. We can send that to you. This is why I am frustrated when the Speaker says this is not related to the budget. For example, if we can get business regulatory change so I can recruit manufacturer’s here and more transportation companies here, and more businesses here, we can generate billions of new revenue without raising tax rates. That’s directly tied to the budget. And if we can get the pension reform I’m asking for and the local control of government costs, we can save billions for the taxpayers that’s directly related to the budget.

Miller: Billions?

Rauner: Billions.

Miller: Because the Illinois Policy Institute did a study on prevailing wage and they didn’t find much savings at all, you’re looking at ¾ of a point.

Rauner: I’d have to see the study. ¾ of what point?

Miller: ¾ of a percentage point on their property tax bills.

Rauner: That’s a lot of money.

Miller: When I took a look at their numbers it’s probably half that, so it’s less than half of a percentage point. That’s not billions of dollars.

Rauner: I didn’t say prevailing wage alone is billions per year, it’s a lot, it’s many, many hundreds of millions. All of those changes together - Local control is billions. Because local control on pensions, what gets collectively bargained, the prevailing wage, HUGE. Some agree with you. Fine! I’m not saying they can’t do what you want but why do the communities who agree with you tell the communities that agree with me how to run their communities? Where does that come off? That’s not what democracy is about.

Miller: Well there is some dispute over whether you can even do that at the local level.

Rauner: Well I don’t agree it’s disputable but let’s have the dispute – that’s fine.

Miller: It’s getting us nowhere because it’s not being accepted, there are veto-proof majorities in both the House and the Senate. You said recently to Dan Proft that we aren’t’ going to get a budget until Mike Madigan changes. And Mike Madigan is not a guy who changes very often. So if you accept the fact, I don’t know if you do or not, that neither you nor the speaker are going to compromise on what you call your “basic principles” –

::Oscar bark::

Miller: Oscar stop.

Miller: Do you think it’s time to try something different to break the log-jam?

Rauner: Well I am up for your suggestions. Let me dispute a couple of your assumptions. I have compromised and I will compromise. There are no one of my six bills that I say have to be the one that passes and any bill that does pass can be tweaked. There is nothin’ that is off the table for me in terms of what will happen. But what we can’t do – and I said this in the op-ed you read – a massive tax hike and nothing else? No. Failure. That’s a disaster for the state. That we can’t go there.. And the reason I am optimistic, the Speaker and I get along perfectly well, it’s not a personal thing. It’s always spun that we hate each other. Not true. The reason I am cautiously optimistic is that Mike has done things in the past that have really ticked off AFSCME or the teachers union or whoever and yes, do some of what I’m recommending do that? Yes, but he’s done it before. It’s not like it’s unheard of for him.

Miller: I agree with you. So I don’t disagree I just don’t see him doing it yet. Do you see him cutting a deal before the primary? Or before the General Election?

Rauner: I don’t know what timing he is going to choose. You know my buddies over in the Democratic caucus, some say that there’s a chance he’ll do it soon, others have said there is no way it’s happening before the primary. And more and more are sayin’ no way until after the general. At some point we got to lead.

Miller: How do you get there? You’ve faced complicated situations in business. You didn’t become who you were by just waiting everyone out.

::Oscar growing increasingly agitated::

Rauner: I haven’t played every card in my hand, I haven’t done everything I can do. I’m just going to keep doing what I can do to try and get a compromise.

Miller: Are you going to wait four years? Before we get a budget? Your entire term?

Rauner: Here’s the thing – I will not sign off on a tax hike that doesn’t have reforms in it.

::Oscar barking madly::

Miller: Oscar please!!

Miller: So, four years? Are you really willing to wait four years?

::Oscar continues barking as if to stop the interview all together::

Miller: Are you really willing to wait four years?

Rauner: I’m not waiting, I’m working my ass off 24/7.

Miller: Ok, are you willing to work your ass off and get nothing 24/7 for four years?

Rauner: We’ve already got a lot in the first year. I’m all about improvin’ the future for the people of Illinois.

Miller: (After a pause) Uh-huh.

  63 Comments      


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