* The House is convening at 3 o’clock Sunday afternoon, so subscribers will likely receive a Capitol Fax before that and we’ll start the blog back up shortly before the House goes into session.
* This video is from last month, when four members of Widespread Panic joined Gov’t. Mule on stage for a blazing version of “Cortez the Killer.” It’s a must watch…
Just wanted to clarify a couple of things from the numbers Cullerton’s staff put out on SB 2404:
Elaine was careful the other day to NOT talk about a 30-year savings number. It was Darlene Senger and the House GOPs who had come up with a number of $30 billion. The actuaries had been asked to look at certain scenarios, so Elaine wanted to be careful to only look at the unfunded liability number when the full bill wasn’t scored yet.
On the unfunded liability point, Cullerton’s staff agrees with us. The scenario Elaine and Darlene talked about would be just under $6 billion in savings, and their update agrees.
We think it proves well our point of the real uncertainty of the Cullerton pension model and we look forward to talking soon about the actuarial numbers on the House-approved Senate Bill 1.
* I told subscribers about this earlier today. Senate President Cullerton talked a bit about it on Chicago Tonight yesterday evening…
* The Senate President asked the pension systems to redo their cost savings estimates by including the dollars eventually directed to pension funding that are currently being used to pay off pension obligation bonds. From Cullerton’s office regarding his reform bill, SB 2404 …
New SB 2404 savings numbers over next 30 years is $56.9 billion and reduction in unfunded liabilities is $9.13 billion.
This assumes 50% of actives take simple COLA, other 50% of actives take a 3 year delay in 3% compounded COLA and 2% contribution increase, and 100% of retirees taking a 2 year staggered delay in 3% compounded COLA.
This is the most likely scenario because of union support and feedback that we have received from retiree groups. This is the scenario that we relied upon when we passed the bill.
Other scenarios also included in the attachment. Savings for the scenario referenced by Nekritz is $46 billion and $6 billion respectively.
Keep in mind this includes the Fortner money.
Nekritz claimed that the savings would only be about $30 billion. But that’s not what the final numbers show. Here are the attachments…
Representatives of organized labor in Illinois contend that the pension-reform bill recently passed by the House would be unconstitutional because it diminishes or impairs the claims of retirees. I think it’s probably unconstitutional for a very different reason.
Our Legislature can spend money by simply passing an appropriation — by majority vote of both houses and with the approval of the governor.
However, the framers of our state Constitution realized that the incurring of debt was more dangerous to the future of the state. So they provided that debt may not be incurred for general purposes except under tight limits in amount and duration, and that debt “for specific purposes” may not be incurred — “or the payment of State or other debt guaranteed” — except by a vote of three-fifths of the members of both houses.
The Madigan pension reform bill passed by the House (though not the Senate) would impose a new “contract obligation” on the state, mandating annual funding. This funding obligation is declared by the House bill to be “protected and enforceable under” Section 16 of Article I (prohibiting any law impairing the obligation of a contract) and Section 5 of XIII (the pension clause) of the state Constitution. If the state should fail to pay the “amount guaranteed,” a special judicial “mandamus” mechanism is made available to compel payment.
* Related…
* Editorial: Who blinks first?: As a show of good faith, Cullerton could call the House bill for a vote in the Senate. If it passes, we’re done here, and we await the lawsuit. If it fails, likewise in good faith, Madigan can call the Senate bill in his chamber. If it passes, the Legislature has at least moved the ball forward - if not nearly enough - and can return to do more radical surgery another day, when the decisions will be no less difficult - maybe more so - than they are now. If it fails, we’re back at square one, and the meltdown accelerates, putting state-provided pensions, jobs and services in jeopardy, perhaps sooner than anyone imagines.
* U Of I Campus Faculty Association Votes Against Pension Bills: The University of Illinois at Urbana-Champaign’s Campus Faculty Association will not support either pension reform bill currently being considered in the Illinois General Assembly.
