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* Our quote of the day goes to Chris Mooney, a professor of Political Studies with the Institute of Government and Public Affairs at the University of Illinois Springfield speaking about the governor’s new budget.illinois.gov website, which allows people to post suggestions about ways to cut the state budget…
“I think blogs are a terrible thing in the American public because there is no responsibility,” Mooney said. “It’s interesting and a good thing that many people [on the governor’s budget site] are owning what they say, which is unlike a lot of blogs.”
Actually, the worst commenters are found mostly on newspaper websites, not blogs. Whatever the case, Mooney’s thesis is not wholly correct. There are lots and lots of pseudonymous and anonymous comments on the governor’s budget site. Have a look for yourself. And quite a few of the ideas are a little silly…
“It won’t save millions of dollars, but is it really necessary to use a new pen, that I’m sure isn’t a 10-cent Bic pen, every time the governor signs his name on a document?” Kevin Taylor, Chicago.
Here’s a clueless one posted this morning…
Susan Nikka Chicago Since most of the budget goes to the employee payroll and all benefits, I suggest taking back the last pay raises of ALL GOVERNMENT EMPLOYEES, which means local and state-wide, administrative, congressman, alderman — EVERYONE!
“Most” of the budget does not go towards employee payroll and benefits. And how is cutting congressional and aldermanic salaries gonna help the state budget?
Finke finds evidence of astroturfing on the governor’s site…
Several commentators wrote to promote hospital funding. They appeared to be form letters. Suggestion to writers: Don’t use form letters. Quinn may be an exception, but many politicians routinely ignore form letters.
“How could anything on this (Web site) have an impact on what is going to be said?” Mooney said. “The budget is put together over the course of an entire year and has the input of hundreds of people and specialists. And now two weeks before, (Quinn) sets up a blog to get input?”
What Professor Mooney fails to grasp is that Quinn can use some of the more lucid suggestions for political cover in his budget address. He can incorporate the suggestions into his speech and portray himself as a man of the people. Used properly, it could be an effective little gimmick.
* The Chicago Tribune laid out its own budget cut proposals yesterday. The paper wants a two-year solution with not tax hikes. One item on the list was the pension funds…
The most ambitious initiative to rein in costs now and in future decades comes from the Civic Committee of the Commercial Club of Chicago, which has proved up its legal and financial implications. The plan would freeze, and guarantee, pension benefits already earned, but would set somewhat lower benefits going forward for current state employees and new hires. Retirement ages would increase, while accrual rates and annual cost-of-living bumps would decrease. An offsetting drop in employee pension contributions could put more money in some workers’ pockets.
These changes appear to be constitutional and parallel how private-sector employers have moved tens of millions of workers to less costly retirement plans, such as 401(k)s. One huge difference: The Civic Committee proposal keeps all employees in a defined-benefit plan — a golden nest egg that many private-sector workers no longer have. None of this would affect current retirees, whose pensions are constitutionally guaranteed for life. Actuarial studies estimate that these changes would reduce the state’s unfunded pension obligations, now approaching $95 billion, by about $20 billion. Budget savings: At least $2.1 billion.
A $2.1 billion savings right away? I haven’t been able to find anything at the Civic Committee’s website with that number, but I’ve been told an answer will be forthcoming. I’ll share the info when I get it.
That editorial also called for cutting local government revenue sharing in half, which would only transfer the problems to somebody else.
* Related…
* Dems must OK cuts to get tax increase: If, in the end, the Republicans refuse to play ball, Madigan should move forward without them, the political price be damned. He owes it to Illinois to use his power to deliver for the state — not just to accumulate even more power.
* Quinn: Lawmakers not cheering for tax increase: But Quinn has said he won’t back down from an income tax increase if House Speaker Michael Madigan and Illinois Senate President John Cullerton ask him to do so because lawmakers hesitate to support one in an election year.
* Range of services at risk due to city, state budgets: Like a frog in a gradually warming pot of water, not everyone notices the trouble brewing. But budget problems have already hurt the Chicago area’s way of life — public transit is shrinking, library hours have been cut, and public schools are laying off employees by the hundreds. And it looks like things can only get worse.
* By the numbers: How Illinois’ fiscal picture adds up
* Ideas to fix Illinois budget run from the ordinary to the exotic
* Take your own whack at state’s budget mess
* Online budget plan has obvious holes
* A Titanic mistake or nothing at all: This ship of state is steaming full speed ahead as people scream, “Iceberg!” That’s what this State of Illinois budget mess looks like to me.
* College tuition costs causing heartburn: One year at Illinois State University, my alma mater, costs more than $16,500. If prices kept pace with inflation from the time I graduated, one year at ISU should cost $10,000. Instead, the price more than doubled.
* Time to reform pensions, not add more sweeteners
posted by Rich Miller
Monday, Mar 1, 10 @ 10:21 am
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Doesn’t Phil Kadner know about the magic beans?
Comment by Anonymous Monday, Mar 1, 10 @ 10:26 am
Now I’m not a budget expert, but I think the Trib’s math is way off. Since the deficit is structural in nature, doesn’t the level of cuts they propose only close half of the problem?
As far as I can tell, the $13 billion amount is annual - not cumulative. Therefore the two-year deficit is $26 billion, so they’re not even getting close.
In any case, balancing the budget over two years violates the constitution, and we have a Comptroller who won’t sign off on any short term borrowing.
Comment by Don't Worry, Be Happy Monday, Mar 1, 10 @ 10:33 am
“What Professor Mooney fails to grasp is that Quinn can use some of the more lucid suggestions for political cover in his budget address. He can incorporate the suggestions into his speech and portray himself as a man of the people. Used properly, it could be an effective little gimmick.”
rich, last week I was of the same opinion. Now, I am not so sure. The public is just not supportive of Quinn’s tax increase, a few measley good suggestions won’t change that fact. I’m not sure why Cullerton is signaling that the senate won’t go along with Quinn’s tax increase when it did last year and in fact gave him a bigger increase than he originally wanted.
P.S.,
The online newspaper comments sections often contain some absolute gems of information.
Comment by Will County Woman Monday, Mar 1, 10 @ 10:34 am
===As far as I can tell, the $13 billion amount is annual - not cumulative.===
About half is rolled over from this FY. This may be a three-year solution, not a two-year as the Trib claims.
Comment by Rich Miller Monday, Mar 1, 10 @ 10:37 am
And I’m not even sure that those numbers can be sustained - particularly that really big up front pension savings.
Comment by Rich Miller Monday, Mar 1, 10 @ 10:38 am
Chris Mooney, a professor of Political Studies with the Institute of Government and Public Affairs at the University of Illinois Springfield
The last thing a guy like this wants is to listen to other’s suggestions about government. He didn’t become a professor to listen. He became a professor to talk and write about what he believes about governments. He isn’t about to share a stage with those without similar educational credentials as he, even if he still claims we live in a democracy.
I think there were some bloggers during the American Revolution that were anonymous, who was it, - “Poor Richard”? And there was that thing a lot of folks liked, “Common Sense”, written by an Englishman.
But then, hey - what do I know? I might have graduate degrees too, but I’m not a tenured faculty professor like Dr. Mooney. Teenagers pay for him to warp their minds, at least, those that still care to listen to him.
Comment by VanillaMan Monday, Mar 1, 10 @ 10:42 am
There would be no immediate savings by instituting a defined contribution plan. The state would immediately be on the hook for federal social security quarterly payments of over 6% that they do not now pay for a large majority of participants. Add to that the tremendous administrative costs involved in setting up such a plan and add to that whatever contribution the state would make and the cost to the state almost doubles. This idea would SPEND about 2 billion rather than save it. There might be some savings 30 years down the road when these employees who haven’t been hired yet retire but the plan would not do anything for state budgets in the near future except make the problems worse. Reducing benefits for future employees does not address the current debt. The Trib never lets facts get in the way of their editorials. I thought that the Civic Committee might.
Comment by Bill Monday, Mar 1, 10 @ 10:46 am
“That editorial also called for cutting local government revenue sharing in half, which would only transfer the problems to somebody else.” Thanks for pointing that out, Rich. Isn’t this the money that Illinois cities get from their share of the sales tax? If so, then the Trib is suggesting the state raise the state sales tax and do away with the local element of the sales tax. That will mean misery for a lot of communities around the state who count on “their share.”
Comment by ilrino Monday, Mar 1, 10 @ 10:48 am
I think you’re misunderstanding Susan Nikka’s suggestion.
=And how is cutting congressional and aldermanic salaries gonna help the state budget?=
She says…
=I suggest taking back the last pay raises of ALL GOVERNMENT EMPLOYEES, which means local and state-wide, administrative, congressman, alderman — EVERYONE!=
Comment by Brennan Monday, Mar 1, 10 @ 10:49 am
To: Susan Nikka. How about if state employees give back their last pay increase if the state gives back its last pay cut?
Comment by SAP Monday, Mar 1, 10 @ 10:51 am
I was taken aback by the immediate $2.1 billion savings as well. I’m interested to see the explanation.
The Trib also scraps the capital plan and takes the revenue sources, less video gambling, and rolls them into the GRF.
With 12% unemployment, that’s crazy. It’s jobs, jobs, jobs, remember? Plus, anyone who’s ever owned a car or a house knows you have to make investments in keeping them up or it’ll cost you dearly later. The same goes for capital assets.
Comment by wordslinger Monday, Mar 1, 10 @ 10:51 am
Tribune: Reread your State Constitution.
Comment by SAP Monday, Mar 1, 10 @ 10:54 am
Wordslinger, I agree that it is jobs, jobs, jobs…that’s why an increase in the income tax increase is so scary to most folks.
Ilrino, I think what the Trib was saying about the local government revenue sharing cut was that everyone needs to step up and contribute with cost saving measures. Just because you have it now should not guarantee that you always get it.
Comment by N'ville Monday, Mar 1, 10 @ 10:58 am
N’ville says, “Wordslinger, I agree that it is jobs, jobs, jobs…that’s why an increase in the income tax increase is so scary to most folks.”
I think Quinn needs to do a better job of promoting his ideas for exemptions, etc under his proposals (not just “explaining” it because he did explain it quite clearly).
Our family of 5 only had a $60 increase under his original plan. $5 a month to get the state back on the right track ain’t the end of the world. And we’re solidly middle class.
Comment by Rob N Monday, Mar 1, 10 @ 11:04 am
a thought that has been kicked around out in the field might help funnel some cash into the pension system now. I know when I offer this I should be ready for a bunch of “state workers are the devil himself” responses but oh well here goes.
A plan where state workers can buy 3-5 years towards their pensions but they can stay employed should be offered. The thought is that a lot of younger employees would take advantage of this. They can become vested, they add years to their retirement but they don’t have to retire. This would provide an influx of cash into the pension system and help with the deficit. There should be a limited time to make the committment to the plan but then give the employees time to make the payments to the pension system. Given the economy I think this would get some interested who might not have the money right now. The gist of the plan is the younger workers pay now but you don’t have to worry about them retiring for many years. So it’s like borrowing from future pensioners to pay the present debt. This might defray the cost of the pension payments due right now and help out in the short term. the State would have to fund their pension obligation in future years to keep the pension solvent.
Comment by Irish Monday, Mar 1, 10 @ 11:05 am
As a professor, Mooney should be ashamed of that kind of quote. Rather than post on blogs maybe we should all just sit back and listen to the wisdom of Professor Mooney. The world would be such a better place.
Comment by Cosmic Charlie Monday, Mar 1, 10 @ 11:05 am
Regarding the pension:
1. The only way anywhere near $2.1 billion could be savend in a present annual year is by amortizing the savings over a defined period. There will be a price to pay for financing the shift.
2. I expect a constitutional challenge for any benefit change to present employees, including eliminating rule 85, extending the retirement age to 65, or anything of the sort. The state judges opened the door to this challenge when they ruled on their COLA being a similar “constitutionally protected benefit”. If not getting a raise is a basis for a challenge on “diminishment”, surely slicing several years out of your eligibility to receive “what’s coming to you” based on actuarial projections will have similar legal footing.
Comment by Six Degrees of Separation Monday, Mar 1, 10 @ 11:12 am
” . . . which would only transfer the problems to somebody else.”
The cash problems are already being transfered to someone else: medical/dental providers, public higher education students, local taxpayers, state-funded service providers of all stripes, vendors who sell to the state . . .
The cessation of operations of any entity that relies on a significant portion of its revenue will further reduce the field of state obligations. This is what starving the beast is all about. I do not have a short-term revenue solution for the state, or the rest of the nation, but such a solution does not lie within the power of the state, only within the private sector’s abillity to create wealth.
Comment by Captain Flume Monday, Mar 1, 10 @ 11:13 am
Irish-
Schnorf or AA could probably chime in here, but the employee contribution for a “buy and carry” early retirement incentive would likely be a trickle in the state budget, and the back end payoff would create many more problems than it would immediately solve.
Comment by Six Degrees of Separation Monday, Mar 1, 10 @ 11:15 am
Also, Rich, this wasn’t a 2-year plan. Effectively, it is an infinite-year plan.
About $6 billion of the deficit is deficit from this current year, and $6 billion is carryover from last year.
If you cut $6 billion, congrats - you pay for last year’s bills, while the State still carries over another $6 billion into next year.
Cut that $6 billion next year, and then next year’s $6 billion budget carries over into the following year.
And since you are using the capital money to play this game of leapfrog, you end up not ever funding the capital plan. And you short the pensions. And you take prescription drug coverage from seniors…etc.
It seems the Trib has the same dyslexia as Brady - they don’t understand the difference between deficits and debt.
Comment by George Monday, Mar 1, 10 @ 11:17 am
Ahh savings today for what may or may not occur in the future. Sounds like another reason to underfund the systems to me. I just wonder if the Trib had not had their pensions cut out from underneath them if they would be so anxious to recommend doing that to others? I guess since my house has been robbed it is ok if my neighbors house is robbed too.
Comment by Obamas' Puppy Monday, Mar 1, 10 @ 11:17 am
Mooney would probably be happier with a more complacent populace, whose members simply cough up the money when asked. All those budget experts hired by the Dems must be right. An income tax increase is the only way. And it’s for our own good, of course.
I’ve stopped listening to the State Week in Review because Mooney et al have turned the
show into an almost nonstop rant on why Illinois taxpayers should pay more. They only rarely mention that several of the participants work for state government, and thus will likely benefit from an income tax grab. And they never ever
attempt to present alternative opinions.
Comment by cassandra Monday, Mar 1, 10 @ 11:35 am
Love the laser focus of cut local government revenue sharing and hit the education system. Simply move the issue to someone else’s pond and the problem is gone. Unfortunately, local government and schools still need the bucks and at some point they will simply raise local property tax dollars or local sales tax. Pay now, pay later. Still gonna pay.
Comment by Anonymous Monday, Mar 1, 10 @ 11:39 am
Did I read the Tribune editorial correctly, did they call the Illinois Policy Institute a “think tank?” Isn’t this the same outfit that issued the recent Pig Book of wasteful spending in Illinois, the one that was filled with error?
Stink tank might be a better term for IPI on that score, but at least the Tribune is citing sources other than its own dwindling ed board staff.
Comment by 47th Ward Monday, Mar 1, 10 @ 11:50 am
Why not eliminate state retiree health care. Retire at, say, age 52 from state government and you get free retiree health premiums, a dental subsidy, and a very modest deductible. When you turn 65, the supplemental policy is free. Dependents cost more but not much more when you consider what you’d have to pay for them in the individual market.
Most corporations are scaling back or eliiminating retiree health benefits, even if they still have defined benefit pensions.
And I don’t believe retiree health insurance is protected by the constitution.
Why is this exorbitant free perk still in existence even. Not sure, but maybe it has to do with legislators health insurance. To spare the citizenry these costs, maybe it would be better
to bite the bullet, continue the deal for the legislators, and either eliiminate the perk or
have retirees stay in the pool and pay market rates.
Given our Pat’s deep and abiding fear of state employee unions, I somehow doubt that this cost saving option will even come up. As a matter of fact, I think it came up last spring and he backed off instantly when the (predictable)
complaints started coming in.
Comment by cassandra Monday, Mar 1, 10 @ 11:58 am
401(k) style plans are creating more and more poor retirees. The “savings” from using them is passed on in increased social costs and programs to provide for the ever increasing low income retirees we are creating.
the 401(k) we not supposed to replace defined benefit plans, just supplement them and provide a vehicle for owners and upper income employees to put away additional income.
for a decent discussion of the problem See http://www.thestreet.com/story/10016126/the-401k-could-prove-a-history-making-fiasco.html
It is penny wise pound foolish to get rid of defined retirment benefit plans on the hope that idnvidual will invest money, successfully, to provide for themselves. We are already placing a huge burden on social security, and it is getting worse as we focus more and more on these types of retirmenets. In the end the State is not saving money by cutting benefits, it is transfering the expense to govt back programs to provide free and low cost food, drugs, transportation etc to seniors.
Instead of having State employees fund ovt today out of their pensions and us shouldering the burden tomorrow of caring for them, lets fins real long term solutions.
Private business does not cut its overhead when the cost of goods sold exceeds the price, they do some cutting but they raise prices to generate more reveneu as well. ow the private model is not a great one, but lets stop pretending that the private sector is a magical operating bullet for govt, and that it does no raise prices when it can or wants more money.
il companies reported record breaking profits when oil prices went up; they did not keep charging the same and cut expenses, they cashed in and cashed out in bonuses etc. So the private model is not good for Govt; and the mythical only cutting solution is not real world either.
Comment by Ghost Monday, Mar 1, 10 @ 12:00 pm
Congressional salaries aren’t provided for by the state correct? That would be a goofy suggestion in that case.
Comment by Levois Monday, Mar 1, 10 @ 12:11 pm
I think the train has already left on defined benefit pensions in the private sector.
There is some talk of a national defined benefit pension (or annuity) system in addition to Social Security that would be available to all; that might make this public sector perk more palatable to the folks who have to pay for it via their tax rates. Given the delays in getting health care resolved, I’d be surprised if the Obama administration got to it, even in two terms.
The alternative would seem to be a seriously impoverished retiree population in a few decades,
primarily dependent on Social Security, perhaps reduced, and the vagaries of their defined contribution accounts.
Comment by cassandra Monday, Mar 1, 10 @ 12:15 pm
There simply would be no immediate savings in the plan. Its more honest to argue that in the short to mid term cash cost (spending) increases.
If we were currently paying the full normal cost (probably around $1.3B-I just don’t have the energy left to do the math) and fully funding the accumulated unfunded liability including paying down the balance (probably between 5 1/2-6 billion annually) then the forward looking normal cost would go down and there would be a savings to apply to the cost of SS for those not currently getting it; hardly $2.1 though, since it is hard to save $2.1 out of a $1.3 payment.
But we aren’t making those payments of around $7B, we are currently paying in around $4.3. The only way we could reduce spending on pensions under their plan or anyone else’s is to reduce the already insufficient payments we are currently making.
As I commented before, a plan such as the Civic Committee’s works conceptually. Always spend less than you take in, use the remainder to pay down debt until you catch up. The particulars don’t work because they start with the assumption that current approps really represent the rate at which we are accumulating liability and that revenues represent recurring revenues. But I still argue that their plan is as good as any other I see on the table right now.
Comment by steve schnorf Monday, Mar 1, 10 @ 12:24 pm
=== Why not eliminate state retiree health care. Retire at, say, age 52 from state government and you get free retiree health premiums, a dental subsidy, and a very modest deductible. When you turn 65, the supplemental policy is free. Dependents cost more but not much more when you consider what you’d have to pay for them in the individual market. ===
Sounds like the way Greece has been handling it for decades. And we can all see how that is turning out!
Comment by Louis G. Atsaves Monday, Mar 1, 10 @ 12:26 pm
I think Quinn needs to come up a list of the cuts that have already been made and his people need to get the word out. Every time the topic of a tax increase comes up, the politicians lead a chorus of “We will need to cut spending first.” What the media generally fails to report and the politicians fail to acknowledge, is that we have been cutting for years. Examples: General state aid to schools has not been cut, but many of the other revenue streams have been. Revenue to higher ed, the DNR, and Corrections have all been cut significantly (every state agency and constitutional office has had it’s budget cut or frozen). The failure to fund a capital plan also amounts to a cut, because new plans have typically been implemented when old plans were completed. (In addition, the lack of maintenance and replacement is an unrecorded part of the state’s debt.)
Bottom line: the cuts have been made.
Comment by Pot calling kettle Monday, Mar 1, 10 @ 12:33 pm
Louis’ point on Greece is about right. It’s time for Illinois to start thinking seriously about withdrawing from the single currency dollar union created by the federal central bank.
Withdrawing from a currency union typically involves a significant devaluation of the base currency to permit the state to pay its bills in cheaper currency. If, for example, we withdrew from the dollar, we could repatriate all of the Abe Lincoln pennies from the federal government and make our $12B debt current-year deficit shrink to $120 million, and our pension liabilities shrink to about $850 million.
In all seriousness, if we were a sovereign nation and had run ourselves this way, many economists would be arguing for a step like this to help clean the slate.
Comment by Vibes Monday, Mar 1, 10 @ 12:51 pm
Hypocrisy . . .thy name is the Chicago Tribune.
The Tribune editorial, and the GOP’ers they support including Brady, love to preach that “government should be run more like businesses.” The Tribune continued that mantra in its “A no-take-hike option” editorial including recommendations for 401-K plans – replacing the State’s defined benefit pension plans – as well as privatization of various services.
In fact, faced with increasing costs, businesses often raise their prices, just as governments raise taxes.
An interesting case in point can be found at:
http://newsblogs.chicagotribune.com/towerticker/2010/01/chicago-tribune-to-increase-mondaythroughsaturday-newsstand-price-sundays-and-subscribers-unaffected.html
Ironically enough, the Tribune’s own Tower Ticker column announced the Tribune was increasing its newsstand price by $0.25 to $1.00, effective January 18th on top of the Tribune’s prior increase on December 31, 2007, when the newsstand price was also increased by another $0.25.
That means the Tribune raised its prices by 100% in a period of two years! Between those two increases, the Tribune sought Chapter 11 bankruptcy protection, due to the huge debt burden it had accumulated, and then subsequently reduced news coverage while going to a tabloid format.
No wonder they no longer proclaim themselves as “World’s Greatest Newspaper” from which WGN-TV and Radio emanated!
Maybe the Trib should try “WGH” – World’s Greatest Hypocrite?
Comment by "Outing" the Trib Monday, Mar 1, 10 @ 12:56 pm
I think it is clear the dumbest comments come from the academics who are usually lite on real experience— i.e. never had to balance a budget, hire or fire or purchase goods. Their insights typically tell us nothing
Mooney proves my point.
Meanwhile everyone should know that if the pension plans are “reformed” there will be less in contributions which hurl the unfunded liability even higher.
Perhaps we could tell the dopes at the pension funds to look for risk free investments. Most of the growing deficit comes from poor investment decisions and losses.
Meanwhile how about red lite cameras around the Tower and Lake Shore drive so we can make some moola on speeding delivery trucks.
Comment by CircularFiringSquad Monday, Mar 1, 10 @ 1:09 pm
Mooney may still be smarting from the blog post I did on him several months ago. lol
Comment by Rich Miller Monday, Mar 1, 10 @ 1:16 pm
47th Ward asks, “Did I read the Tribune editorial correctly, did they call the Illinois Policy Institute a “think tank?””
I had the same thought 47 when I read the thing yesterday.
I wonder if the Trib labels progressive think tanks as just “think tanks” since they clearly left the conservative bent out of their description of IPI.
And Outing the Trib is spot on. The Trib is facing its own sea of red ink, has been relying on government bailouts for years AND has raised its own price while simultaneously degrading its service (both in reducing the physical size of the paper and producing an inferior “news” product as a result of mass layoffs).
But at least Susan Kuczka is still writing for Mother Tribune.
Oh, wait. That wasn’t her I-heart-Mark-Kirk article on yesterday’s front cover? Hmm… Coulda sworn that was her writing. Almost like the Trib ran a news release from Kirk’s press secretary verbatim…
;)
Comment by Rob N Monday, Mar 1, 10 @ 1:38 pm
==Most of the growing deficit comes from poor investment decisions and losses.==
Wrong again,CFS. The growing deficit comes from chronic underfunding by the legislatures and governors over the last 4 decades. Had they not used the funds as their personal piggy banks to fund operating expenses while they, year after year, unconstitutionally underestimated expenditures and over estimated revenues the funds would be funded at over 100% and then they could have legitimately used the surplus. We know you like to bash Republicans and prop up the current leadership but at least try to be more honest than the Tribune.
Comment by Bill Monday, Mar 1, 10 @ 1:41 pm
“We know you like to bash Republicans and prop up the current leadership”
Understatement of the year…
Comment by George Monday, Mar 1, 10 @ 1:58 pm
Their pension savings accrue over the next fifty years- so how do they attribute the predicted $2.1 billion of pensions savings to the state’s current fiscal year deficit? That’s dishonest accounting..oh yeah–it wasn’t the legislature that gave away the free health insurance to 20 year employees–it was Jim Edgar, who also bargained away the employee’s contribution to their own pensions. Get the facts straight
Comment by trib stuff Monday, Mar 1, 10 @ 2:21 pm
trib stuff (he of revisionist truths); No, before that union contract negotiated by the Edgar Administration, employees got free retiree health care after 8 years service; that Edgar contract raised it to 20 years-nice try though.
The state pick-up of employee pension contributions was in lieu of a cost of living increase, which would have rolled up thru step increases and COLAs over the years. Do your math and try telling the truth.
Comment by steve schnorf Monday, Mar 1, 10 @ 2:45 pm
what gets me about the Chris Money’s of the world is the press continually go them for quotes on subjects they know very little about. Just because you are a professor of Polticial Science doesn’t mean you have a clyue about the budget process or more to my point how to run a campaign. Mooney is weak. No offense.
Comment by Tom Monday, Mar 1, 10 @ 2:45 pm
If we switched to a defined contribution plan, the state would have to actually make the contributions to the plan each year. No pension contribution holidays allowed. The state has abused its ability to defer contributions to its defined benefit plans, resulting in the huge underfunding that will hurt to make up, but I’m not sure I would want to deny the state the flexibility of deferring contributions in the future. If we could convert all current employees from defined benefit to a defined contribution plan today, we would have to contribute 100% of the current funding deficit today. Not particularly attractive.
Comment by Pat Robertson Monday, Mar 1, 10 @ 2:50 pm
It’s likely be more accurate if one referred to retiree health insurance as non-premium rather than ‘free healthcare’, though I realize terms like ‘free healthcare’ usually gets the spinner a bigger buzz.
With that said, I actually do not disagree that a premium should accompany retiree healthcare. I also think that a similiar premium applied to retirees between 55 and 65 that active state workers pay. It’s not until retiree actually turns medicare age that state healthcare becomes secondary insurance. I might be willing to lower my opinion on active worker premium cost for early age retirees if that retiree were to join the HMO plans over the QC option. But of course premiums and in and outs of them are bargaining table issues and I am giving only Cindy Lou’s personal opinion/feelings
Comment by Cindy Lou Monday, Mar 1, 10 @ 2:56 pm
It would also be my preference that all state retirees pay a portion of their premium. We were not able to achieve that in those negotiations. By the way, remember, the state basically pays for a supplemental policy (not THAT expensive) and retirees pay their own regular premium for Medicare.
Comment by steve schnorf Monday, Mar 1, 10 @ 3:02 pm
and were those picked up contributions made to the pension system–NO!
Comment by trib stuff Monday, Mar 1, 10 @ 3:57 pm
Maybe just maybe the state could cut all the unfunded programs that were enacted over the past 10 years.
Comment by fed up Monday, Mar 1, 10 @ 4:40 pm
@ trib stuff:
The “picked-up” pension contributions at the time were made to the pension systems. That was not the problem.
And, by the way, the state no longer “picks up” the employee portion of the retirement contribution.
Comment by RJW Monday, Mar 1, 10 @ 5:27 pm
I think we need to be more clear about the fact that there are mutiple public pensions. The front-line state worker is getting an appropriate and well-deserved pension. The press needs to do a better job of making clear distinctions between the varying pension schemes paid by the state.
Frankly some of the public talk that is anti-state worker pension smacks of jealousy and pettiness. Front-line workers get mere crumbs compared to others working for the state, and interesting how it’s their jobs that are the first to be threatened. Meanwhile the people who can truly be spared are kept on.
Comment by Will County Woman Monday, Mar 1, 10 @ 5:50 pm
The “picked-up” portion of the state employee’s pension under Edgar ran about 9 years.
For perspective, a Chicago teacher can retire with 75% of their salary but they pay for their health insurance. A state employee (not in the legislative, teacher or judicial retirement systems) gets an average of around 50% of pay under the Rule of 85.
Which would you rather have: 75% of pay and pay for your own health insurance? Or, 50% of pay and no premium health insurance? Of course, it’s not entirely free, you still have deductibles, co-pays, etc. and the Walgreens/Target/Walmart drug plan.
Comment by Emily Booth Monday, Mar 1, 10 @ 9:09 pm
As much as it pains me to admit it, I tend to see a 50% (or more) reduction in local government revenue sharing as being a realistic alternative in these financial straits.
I spend a large portion of my time dealing with local governments, and to be blunt about it, I see unnecessary costs and inefficiencies every single day.
I’ll give a simple example which I witnessed first hand, prior to a County government starting their new fiscal year (12.01 to 11.30). A small County (Northern half of the state) was looking at having to make upwards of $800k in budget reductions to their corporate fund. Had it all done, had lots & lots of unhappy folks within the operation, but had it done. To say the reductions were politically unpopular didn’t quite cover it.
Found out at almost last minute (literally just before going to their equal of an Executive Committee, last step before adoption by the full Board) that the revenue shortfall wasn’t going to happen. Most of the cuts were restored at that point - virtually all of them. All’s good with the world, except taxpayers could have gotten a break - Didn’t.
Saw another situation where a particular service for a local government #1 (let’s call it a “permitting” situation) was costing in the $150 to $160 per permit range for processing. And we KNOW those are the costs. And it’s not Cook County, because their costs for this same service are about 80% higher still.
A private entity comes in and offers to do the same work (and I mean every bit as good quality, if not better) for a not-to-exceed cost of $100 per. But they are not politically connected - they just specialize in getting the job done.
The alternative - the local government (#1) went into an intergovernmental agreement with a different local government (#2) in the same geographical area, agreed to handle their “permitting” work, then increased all of permitting fees for the area of local government #2 (to the businesses & homeowners) up to their same higher level, and are now happily doing all the work.
Sounds great, except their “cost per permit” actually increased over the $150-$160 per range with the added work, so the poor taxpayers still can’t catch a break.
Seeing it every day gets really frustrating. I’ve got no problem with the local government massive revenue sharing cuts, because local governments have been avoiding making the hard cuts for a really, really long time. And if we don’t do something, Illinois could end up facing the bond vigilantes, and that’s not a good place to be.
Generating cost efficiencies at local government levels is possible, but it’s not easy by a long shot. But it is possible. But they are not going to get there unless they absolutely know that they have no other choice.
Comment by Judgment Day Is On The Way Monday, Mar 1, 10 @ 9:48 pm
Need staff reduction, most or all government agencies. Maybe 5%.
Reduction in payment to outside contractors and agencies, maybe 15% (but pay the reduced bills on time).
After that, got to cut the Blago/Jones (Quinn) spending programs instituted since 2006. Then (or at the same time), increase income tax….not graduated…flat. Then hunker down and hope for improvement in the economy.
Comment by Park Monday, Mar 1, 10 @ 9:57 pm
I agree with Cassandra that we must end paying health care for the “early outs”, and the supplemental for full retirees. The savings which I have read about are very large. We do not need to be funding disease research, but we do need to pay Grandma’s Medicaid bill. We need to give a basic amount to schools, but we do not need to duplicate the federal Pell grant system, with MAP’s which, I am told by a financial aide counselor, go heavily to private schools. We do need to revenue share with the locals, but we do not need to give grants for particular municipal projects. Cut it to the bone, the necessities, reform pensions, enact some limited service taxes, and then, let’s talk about a general tax increase. We just can not give more money to those who have misused it.
Comment by justfedup Monday, Mar 1, 10 @ 11:12 pm