Latest Post | Last 10 Posts | Archives
Previous Post: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)
Next Post: Forensic audit not in the cards right now
Posted in:
* Some people are just never happy unless they get everything they want. For instance, here is a press release by R. Eden Martin, the president of the Civic Committee of The Commercial Club of Chicago regarding the pension reform bill approved yesterday…
“This bill is a small step in the right direction but it doesn’t begin to solve the State’s urgent fiscal problems. The only way to achieve significant cost reductions now is to reform retirement benefits for current state employees prospectively and new hires moving forward. The people of Illinois are not going to be satisfied with tiny steps in the right direction when we have a State fiscal crisis of this magnitude on our hands.”
Senate President John Cullerton said yesterday that his research shows cutting benefits not yet earned by current employees cannot legally be done. And the General Assembly was nervous enough about cutting benefits for future employees that a cut to current employees would’ve been hugely tough, if not downright impossible.
Today’s Tribune editorial was entitled “Don’t be fooled“…
That said, we understand the realpolitik here: Democrats and Republicans who voted for this bill Wednesday can tell voters they’ve done something worthwhile, even if it doesn’t much diminish the state’s current budget crisis or pay down our already staggering unfunded pension obligations.
What the politicians can’t pretend, though, is that this bill repairs how Illinois spends money today. Until they’ve made the major spending reforms that this page and other voices keep advocating, Gov. Pat Quinn is free to keep scaring people with his threat to slash education funding by $1.3 billion.
As we’ve already discussed, the Tribune’s budget cut ideas are grossly inflated and some are even downright bogus. And if editorial board members had bothered to read their own paper, they’d know there are some significant immediate and longterm budget savings in this package…
But the growth in the state’s pension debt should be reduced dramatically, said Dan Long, executive director of the Commission on Government Forecasting and Accountability. Long also said the state will save $119 billion over the next 35 years under the legislation.
Though major pension savings won’t accumulate for years, Quinn and lawmakers plan to use the pension changes to save money as they craft a budget in the face of a $13 billion shortfall. Because the bill allows officials to recalculate the state’s overall pension burden, they estimate saving $300 million to $1 billion in pension payments that would have been required in the next budget.
COGFA has a rough estimate of $500 million to $1 billion for next fiscal year. It won’t cure the deficit, but it ain’t chump change, either.
* Doug Whitley of the Illinois Chamber was far more optimistic than the naysayers…
And so was Senate Republican Leader Christine Radogno…
“This bill is not window dressing. It’s substantial reform,” said Senate Minority Leader Christine Radogno.
The Sun-Times editorial board, which is way more reality-based than the Tribune’s grumpy old men, praised the proposal as a “giant first step.” But they did have some quibbles…
We don’t think all employees should wait until 67 to retire. Is that really the right age for a kindergarten teacher?
We’re concerned that the cost-of-living reduction is too severe. The bill exempts the financially weak pension systems for police officers and firefighters, which we think is a mistake.
* The bill’s highlights…
* Require an employee to be 67 years old with 10 years of service in order to qualify for unreduced benefits. A person could retire at age 62 with 10 years of service, but with a reduction in benefits of 6 percent per year.
* Cap the salary used to determine benefits at $106,800.
* Base benefits on the highest average salary earned during eight consecutive years of the last 10 years of service. Now the benefit is based on four years of service.
* Would stop compounding annual cost-of-living benefit increases; those increases would be based on 3 percent or one-half of the consumer price index, whichever is less.
* Limit participation in the “alternative formula,” which provides enhanced benefits for high-risk state jobs, to correctional officers, state police and state firefighters.
* Do not allow a person to draw a pension from one system while working a full-time job covered by another pension system. Pension payments would be suspended during such a period.
* Who’s covered…
The measure that passed Wednesday takes aim at 13 pension systems, including those representing state workers, teachers, Chicago city and park district employees, Cook County workers, legislators and judges. Police and firefighters are exempt from the changes.
* The Chicago schools provision…
The plan also gives Chicago’s public schools a windfall to address what could be a $1 billion deficit next school year by reducing the amount that must be contributed toward teacher pensions by $1.23 billion over three years. The measure also extends by 14 years the period when the Chicago Teachers Pension Fund must be 90 percent funded. It is now 74 percent funded.
The Sun-Times editorial addressed that as well…
We support this, reluctantly, because the only real alternative is unconscionable cuts in the classroom. In general, we oppose underfunding pensions. That is, after all, how Illinois got into this fiscal mess in the first place.
* The reaction from union leaders was intense…
“This bill is nothing more than lawmakers shifting the burden of the state’s past mistakes onto future teachers and public employees,” said Ed Geppert, president of the Illinois Federation of Teachers. “If this bill becomes law, Illinois will have the highest teacher retirement age in the country.”
The Illinois Federation of Teachers’ political director Steve Preckwinkle talked to me last night about the bill and the union’s political plans. Watch it…
So did AFSCME president Henry Bayer…
* The rationale…
David Vaught, Gov. Pat Quinn’s budget director, said he was concerned that Illinois’ bond rating, which determines the interest rate the state will have to pay on borrowed money, could be downgraded again when the state seeks to borrow about $1 billion in April to fund the capital construction plan.
Vaught said pension reform could help Illinois avoid a slip in its rating because it would show investors that the state is taking steps to address its structural deficit and “the straitjacket of skyrocketing pension costs.” The state’s total pension liability is $126.5, billion, $77.8 billion of which is unfunded.
Thoughts?
posted by Rich Miller
Thursday, Mar 25, 10 @ 9:30 am
Sorry, comments are closed at this time.
Previous Post: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)
Next Post: Forensic audit not in the cards right now
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
Make no mistake, this was an actual act of political courage by the IL legislature. That is something we have not seen often enough of late and it is something we will need to see a lot more of if we are going to fix the budget mess. Personally, I think this is a huge step in the right direction. Whatever your position, however, you have to give the legislature points for courage.
Comment by SAP Thursday, Mar 25, 10 @ 9:40 am
Wow. I didn’t see that coming.
Comment by Scooby Thursday, Mar 25, 10 @ 9:43 am
Thoughts?
a) Fortunately current state workers are protected and suffer no cuts. This is good and how it should be. Non state workers don’t like this, but I figure it’s sorta like me paying higher insurance premiums for the folks who decide to eat all their meals at McDonald’s and won’t give up smoking. It stinks, but that’s the “I live in a community with other people and must share the burden” tax. I’m compassionate. I get it.
b) But ultimately how effective will this be when the state isn’t hiring many new employees in the first place? And no — the so-called “hacks” don’t count since they aren’t being hired either.
Comment by Anonymouse Thursday, Mar 25, 10 @ 9:44 am
What if the state just declared bankruptcy? Sure, its quitw a drastic measure, but these are drastic times.
Comment by Outsider looking in Thursday, Mar 25, 10 @ 9:46 am
- But ultimately how effective will this be when the state isn’t hiring many new employees in the first place? -
The state work force, similar to the private sector, is getting old. In the next 10 years there will be many many workers retiring.
Comment by Small Town Liberal Thursday, Mar 25, 10 @ 9:49 am
–
The state work force, similar to the private sector, is getting old. In the next 10 years there will be many many workers retiring.
—
Sure, but as you know, those retirees aren’t being replaced. This is the point, BTW. Push the retirees out the door and reduce headcount. That’s why we have such low numbers of state workers and why nearly every agency is under-staffed.
Can anyone identify an agency that’s overstaffed?
Comment by Anonymouse Thursday, Mar 25, 10 @ 9:52 am
This pension reform should not be surprising. It is the lower fruit on the tree of reform we absolutely need to harvest to keep Illinois solvent. What the GA has been doing this week is simply handling their basic fiscal duties as legislators.
Why is this courageous? How low has our bar of expectation been set? What has been occuring this week regarding this issue is what should have been done years ago by the very same people. Back then, they knew this had to happen. Yet, they sat on their haunches and let us all go through this suffering.
This is not surprising. This is what needed to be done. There is more to do. Get moving and stop high-fiving one another. The GA doesn’t need to be praised, it needs to be further threatened with political Siberia. We’ve been trying the carrot approach for a decade without success - what we need to move these representatives are larger sticks.
Comment by VanillaMan Thursday, Mar 25, 10 @ 9:53 am
Sen Cullerton is correct, current employee pension rights cannot be reduced once they are enrolled in one of the pension programs- this legislation if enacted at least will lessen the state’s future obligations and bring some sanity to the benefit programs available for new hires-the next step should be to scrutinize retiree health benefits since health benefits are not subject to the constitutional protections afforded to pensions
Comment by Steve Thursday, Mar 25, 10 @ 9:53 am
Outsider,
You don’t read this blog much, do you? The state is legally barred from declaring bankrupcy. Can’t do it. Not possible.
That has been made clear here many, many, times.
Comment by dupage dan Thursday, Mar 25, 10 @ 9:55 am
As far as current state employees (I am one), Rich made clear some time ago that benefits already accrued cannot be changed but future benefits can be. What that could mean for me is that the benefits accrued during my 20 years of service can’t be changed. I am about 5 years away from retirement - retirement benefits yet to be accrued can, per Rich, be altered.
Legal to do - politically much more difficult, I imagine.
Comment by dupage dan Thursday, Mar 25, 10 @ 9:58 am
These are sound changes. Current retirees will be paying more for insurance, as everyone will be. If immediate cost savings could be realized it would be with the automatic raise feature should be the cost of living or not to exceed 3%. It CAN be done, there’s simply no political will to do it.
Comment by You go Boy Thursday, Mar 25, 10 @ 10:00 am
VM,
I am reminded of football players who dance after every simple play, like it was a game winning TD at the Super Bowl. I feel the same way about this legislation. Good first step but don’t stand around patting yourselves on the back and spouting about how courageous you are.
Comment by dupage dan Thursday, Mar 25, 10 @ 10:00 am
Well if you can’t reduce current member benefits then how did they increase teachers years to max out their pension from 34 years to 35 years about 4 years ago.
Comment by ispretired Thursday, Mar 25, 10 @ 10:03 am
My wife taught lower grades for 33 years. Burn-out was obvious for 3-5 years earlier. Much of the burnout wasn’t from the kids, but rather for the constant demands (and changes in those demands) from the state about testing, recertification, being required to report or document this or that. Add to the that the general disrespect from parents, it just became to much.
Now a twenty-three year old beginning teacher will be demanded to work some forty years before retiring- There is already a shortage of teachers, this will only contribute to the problem.
And before somebody starts, I will have worked for nearly 50 years when (if affordable) I retire. That certainly wouldn’t have been true if I had been a teacher-the stress level is unbelievable, and more physical than you would expect.
Comment by Downstate Commissioner Thursday, Mar 25, 10 @ 10:06 am
Actually, I’m surprised they didn’t cut free retiree health benefits first, it’s such low hanging fruit. After all, retirement is a choice, especially in today’s world of increased longevity. No longer do people “wear out” in their forties and fifties as in the days of yore.
And with the advent of Obamacare, this population will soon no longer be excluded from health insurance coverage because of pre-existing conditions and there will be subsidies for lower
income retirees under 65 should they choose not to work.
This outrageous free perk should be eliminated in conjunction with the timing of Obamacare access to coverage, and participants should be charged
reasonable rates until that time.
Comment by cassandra Thursday, Mar 25, 10 @ 10:06 am
- Sure, but as you know, those retirees aren’t being replaced. -
I don’t doubt that agencies are understaffed, but people will have to be replaced at some point.
Comment by Small Town Liberal Thursday, Mar 25, 10 @ 10:06 am
I believe this is valid pension reform with huge out-year savings. Let’s let the savings work and not borrow against future savings. That’s like saying, me as a home owner, am going to cut my water usage in half for ten years. Which means I’m going to save $2,500 in ten years. Give me the $2,500 right now so I can spend it. Then slowly over the next ten years I increase my water usage back to the original levels. Now I owe for my original water bill plus the loan for borrowing $2,500. I’m worse off.
With regards to the retirement changes, people beginning employment go into the system knowing what they get. I also do not believe you should modify existing members of the system. They began their employment knowing what they will get and may have made career decisions based on those benefits. You cannot fault or penalize the existing members for collecting what is lawfully theirs. You can only vote out your congress person who approved or enhanced their retirements.
Others say that they made career decisions based on their retirement and it was taken away. Well your retirement was not constitutionally guaranteed. Some state employees may have made very dramatic carreer decision knowing their retirement was constitutionally guaranteed. Again, you need to voice your complaints with those who gave state employees these retirement protections. That is your elected official.
Second I do believe they should offer an optional 401k type retirement with some type of match that new employees can choose instead of the defined benefit. I believe one of the problems with the private sector 401k is that many require the company match to be invested in the company for which the employee works. Then when Enron or AIG crash, people’s retirement tanks. People should be able to invest the company match in what they want.
Comment by Reasonable Thursday, Mar 25, 10 @ 10:07 am
===Why is this courageous?===
It ain’t every day that a party will thoroughly and en masse buck a huge bloc of its biggest contributors/supporters. You may think that’s easy. I say you’re deluded or naive or both. lol
Comment by Rich Miller Thursday, Mar 25, 10 @ 10:08 am
Let’s hope this is a first step to sound fiscal policies. I am much less opposed to a increase in the income tax to 4% then I was just yesterday. I still believe more needs to be done but this was a good start.
Comment by Fed up Thursday, Mar 25, 10 @ 10:10 am
== Can anyone identify an agency that’s overstaffed? ==
The Governor’s office. Every day another person is added to the office and assigned to an agency, usually someone with little experience earning well above the average salary of those with equivalent experience in the agencies. Heck, some are earning significantly more than attorney general staff with 10 years experience.
Comment by anon Thursday, Mar 25, 10 @ 10:10 am
Underfunding, benefit cutting legislators, gotta love’em
Comment by Obamas' Puppy Thursday, Mar 25, 10 @ 10:12 am
–
Every day another person is added to the office and assigned to an agency, usually someone with little experience earning well above the average salary of those with equivalent experience in the agencies.
—
You got numbers to show that?
No agency is hiring “every day.”
Next.
Comment by Anonymouse Thursday, Mar 25, 10 @ 10:12 am
I agree we need to fix this system– but the cuts for judges seem draconian. If the pension for judges is 60% of $106k (roughly $65,000), why would ANYONE want to be a judge? I made way more than that right out of law school. I can understand the $106k cap for most other pensions, but this completely ignores the reality of the legal marketplace and will inflict substantial harm on the qualify of our judiciary.
Comment by the dark horse Thursday, Mar 25, 10 @ 10:14 am
Once again the legislature exempts themselves from this reform. People like Grandburg, Hanig, among a long line of others that leave the legislature to become directors or asst. directors of agencies to increase their pensions is the biggest misuse of the pension system.
I say put them in the SAME pension system as state employees.
I am for the state troops, but the sworn officers that have not seen the road in years that take up desk space at ISP headquarters have as much of a high risk job as a secretary at CMS. I say if they are not on the road put them in the regular formula. Many troopers only spend 2-5 years on the road before moving to a desk job. Then they are not on the road the rest of their career. How is that high risk?
Comment by He Makes Ryan Look Like a Saint Thursday, Mar 25, 10 @ 10:17 am
Huge political win for Quinn. Saving the state $100 Billion is something only the Tribune can dismiss. He now has passed the largest construction bill in Illinois history and massive pension reform that no one thought was possible. He can run on getting things done, independence (from the unions), and a real track record of repairing Illinois. A lot of work to do but encouraging so far.
Comment by Wizard of Ozzie Thursday, Mar 25, 10 @ 10:19 am
Cullertin said Benefits. I think cutting any current promised benefits is a legal morass and as Rich Said The unions are huge in fact they could take over the greens in about the same time this went through the legislature…I dont know of any dem base group even close…so its couragous. I think it would be suicidal to piss them off any more Personally I think he just killled off Lisas run I dont see unuion leadership accepting this pretty resonable bill ex perhaps SEIU.
It still blows away anything in teh private sector below the CEO level
Comment by western illinois Thursday, Mar 25, 10 @ 10:20 am
Unions outraged over this?
Great! Let’s put it to a vote - statewide. I think the unions would get a huge wakeup call as to the level of their support in the state.
Comment by Downstater Thursday, Mar 25, 10 @ 10:20 am
–”I don’t doubt that agencies are understaffed”–
Well, Small Town Liberal, you’re welcome to come on out and see what we’re trying to do on the crew that’s left. If there is headcount aplenty, it appears from down here to be up above somewheres. Between earlier years lay-off and nonreplacement of retirees, your blanket generalized statement does not apply to all areas of state workforce.
Comment by Cindy Lou Thursday, Mar 25, 10 @ 10:21 am
“largest construction bill in Ill. History” yeah right how’s the funding side of those construction promises coming along. That capital plan is falling apart very rapidly pretty soon the only place to put a video poker machine will be Quinns office and that’s just until November.
Comment by Fed up Thursday, Mar 25, 10 @ 10:28 am
=== If the pension for judges is 60% of $106k (roughly $65,000), why would ANYONE want to be a judge? ===
Unless I’m mistaken, nothing would prohibit the judge from contributing the excess of their salary that would have gone toward their pension into a Roth IRA instead.
As to those who question why the legislation didn’t go further, I think the answer is quite simple.
As Madigan pointed out, this pension reform bill mirrors the reforms recently passed to the General Assembly retirement system.
The political damage for lawmakers passing pension cuts for teachers while protecting their own keesters would have been pretty steep.
At the same time, I doubt you would have found even ten votes on the GOP side of the aisle for reducing pensions for current lawmakers.
If you think even Tom Cross is going to vote to reduce his own pension or health care benefits, you’re delusional.
Comment by Yellow Dog Democrat Thursday, Mar 25, 10 @ 10:28 am
Downstater, you make a good point. Lately the focus is on taking away things from others so we can lower the bar for everyone. Get rid of the unions, cut salaires, cut benefits for everyone, until only Eden Martin and his fatcats are the only guys with any money. I’ll bet Eden and crew could take a look at what you get, Downstater and decide how we should take things away from you too. These are people who think the minimum wage is too much. Be careful what you wish for….
Comment by dc Thursday, Mar 25, 10 @ 10:29 am
Dear Mother Tribune:
You just voted to give management millions of dollars in bonuses while your newspaper is in the midst of bankruptcy and raised the cost of your paper, all the while sucking on the teat of taxpayer subsidies.
For the umpteenth time, please get off your high horse about how the state should manage its finances.
Sincerely,
YDD
Comment by Yellow Dog Democrat Thursday, Mar 25, 10 @ 10:33 am
Unions are outraged about this? Well maybe. But are they gonna look to the Republicans for relief? Don’t make me laugh. They’ll be voting Democratic in November…I mean who seriously doubts this?
Comment by Deep South Thursday, Mar 25, 10 @ 10:35 am
Fed Up-
$2.5B is what’s necessary for the state share of the $6B construction season that was anticipated. $1.5B has been sold and the $1B that everyone is worried about getting downgraded is scheduled to be sold in April.
Also, video gaming doesn’t even go into effect until Jan 1st 2011 so no one has any idea how the opt outs will effect it. This can all be found with relative ease on the state’s website for anyone who cares enough to look.
Comment by Little Lebowski Urban Achiever Thursday, Mar 25, 10 @ 10:40 am
Huge political win. Period.
Comment by Wizard of Ozzie Thursday, Mar 25, 10 @ 10:40 am
–
I think the unions would get a huge wakeup call as to the level of their support in the state.
–
How about ask the workers in the unions? Who cares what a non-union member thinks about a union? Everybody these days dislikes what they “don’t got.”
I don’t got a million dollars. I dislike millionaires.
I don’t got a Porsche. I dislike those who do. In fact, let’s get rid of all Porsches. Let’s tax the drivers so that at least I’ll get a little from what I don’t get.
The sour grapes here is both astonishing and unseemly. It’s sort of sickening, actually. People seem to forget the larger obligations of living in an interconnected society. Just because I “don’t got” something doesn’t mean it should be outlawed for those who do.
I ain’t obese, but I know a lot of folks are — and those folks tend to drive up medical costs for everyone. Part of my compassionate obligation is to foot the bill for those folks who make bad choices about their health. I don’t like it but I do it because I’ve agreed to be a part of this particular society.
There’s a whole moral dimension here that no one ever talks about. This stuff is larger than just the money in our wallets. It’s not about taking something away from someone or punishing the rank-and-file because state unions have protected them from the excesses of folks like Blagojevich (or whoever the demon du jour is).
Comment by Anonymouse Thursday, Mar 25, 10 @ 10:41 am
Reasonable “Second I do believe they should offer an optional 401k type retirement with some type of match that new employees can choose instead of the defined benefit.”
They (SURS) already do. It is called the “self-managed plan”.
Comment by Anonymous Thursday, Mar 25, 10 @ 10:43 am
This is a move in the right direction though there is more room to cut all over.
Keep chopping!
Comment by 2010 Thursday, Mar 25, 10 @ 10:47 am
=== If the pension for judges is 60% of $106k (roughly $65,000), why would ANYONE want to be a judge? ===
Power, brother. Judges (literally) rule in their courtrooms. You’d have to cut the pay down to virtually nothing to make a dent in the pool of lawyers who want to be judges.
You could also spend, say, 10-15 years on the bench and then go be a rainmaker at your big local firm.
As far as yesterday’s one-day wonder, I have to think the fiscal crisis in the Chicago schools played the major part in the lightning passage. It certainly has the most immediate impact for them.
Comment by wordslinger Thursday, Mar 25, 10 @ 10:47 am
Can anyone identify an agency that’s overstaffed?
CMS.
Comment by Leave a Light on George Thursday, Mar 25, 10 @ 10:49 am
Is Whitney making any political hay over this? Here’s a chance to pick up up thousands of angry state employees. Since Brady is a non-option, and they’re now angry with PQ/MJM, it would seem logical to try to pick some supporters up now. Sweetalk them just after the betrayal…
Comment by The Glove Thursday, Mar 25, 10 @ 10:51 am
Rich, I don’t mind a bit if you call the members of the Tribune editorial board out of touch with reality, totally clueless or simply delusional. But please do not call them “Grumpy old men,” not when their Editorial Page Editor is about a year younger than I am! Thank you.
Comment by fedup dem Thursday, Mar 25, 10 @ 10:52 am
==I am much less opposed to a increase in the income tax to 4% then I was just yesterday. I still believe more needs to be done but this was a good start. ==
I do not think Fed Up is alone. I suspect this signals a move on the income tax hike. Passage of this bill shows that the legislature is “cutting everything” even the demon unions! Under this cover, a tax increase could move forward. Since the unions have been pushing for the serious additional revenue only income tax and sales tax increases can provide, this would please the unions.
Comment by Pot calling kettle Thursday, Mar 25, 10 @ 10:52 am
If this was such a good and easy fix that it could be done in basically a day, why was it never done before.
We really are revamping how the state does business. State employees used to be underpaid with great health and retirement benefits. Now, state employees are the best paid in most communities, but we are taking the health and retirement benefits.
The unions made their beds with Blago and the democrats. The endorsed Rod and continue to endorse the democrats. Mike Madigan could call the AFSME office at noon and have a million dollars raised by sundown. The unions have abandonded the rank and file. Until the rank and file show the democrats they are willing to do something other then vote democrat they are going to continue to lose.
I know Rich will say republicans take union money too, but no where near the extent and accross the board as democrats. The fact is union members vote democrat because they are democrats, not because the identify with them on issues.
Comment by the Patriot Thursday, Mar 25, 10 @ 10:52 am
State workers do not pay into, and thus cannot receive, Social Security. I wish I could get aholt of the magic wand which makes FICA (and thus SS payouts) “my money” and a state worker’s state pension contributions (and thus state pension payouts) “also my money.” IT WOULD BE AWESOME!!
Like mouse, I also find it interesting that the solution always proposed by the “you’ve got stuff I don’t got” crowd is always “take away your stuff” and never “everyone should get that stuff.”
Comment by Ron Mexico Thursday, Mar 25, 10 @ 10:52 am
==Here’s a chance to pick up up thousands of angry state employees.==
Income tax increase brings them back into the fold.
Comment by Pot calling kettle Thursday, Mar 25, 10 @ 10:55 am
I still have not seen a reason to not support the proposed pension reform.
As far as modifying a retirement plan relating to benefits not accrued, it has been done many times in the private sector. Accrued benefits are converted into an asset using a uniform formula and future benefits are earned differently than before. I do not know why this would be permissible in the private sector but prohibited on the public side.
Future goals need to be making all the pension systems for all groups uniform. Legislators, public safety workers, teachers etc.
It is impossible to implement a perfect system on one step. Lets get on with step one and worry about step2 later.
Comment by plutocra03 Thursday, Mar 25, 10 @ 10:56 am
I am stuck in the system…two or three years to go before I can retire….and no matter how many furlough days I observe or cuts I endure until that time… I am stuck. However…the message this bill is sending to my child graduating from college this Spring is… Do not even consider starting a career and living in Illinois.
67 years old…teachers?!…Get real folks. I guess thats my point..is there anyone REAL drafting this legislation…do they understand the impact this will have on the number of individuals that will no longer seek work in the professions impacted?!?! Will folks seek work in Illinois?! Will college graduates remain in this state? I am all for budget cuts…but it seems the folks responsible for drafting and carrying it this legislation out….need to start with themselves…..I am sure their pensions and benefits…will go untouched. They too need to start “bearing their share of the burden”. In doing so.. I could better understand cuts from ALL areas of the budget.
Comment by Sick of it all.... Thursday, Mar 25, 10 @ 11:00 am
–
State workers do not pay into, and thus cannot receive, Social Security.
—
Not true. Only some don’t, most do.
Comment by Anonymouse Thursday, Mar 25, 10 @ 11:00 am
Cindy Lou - I said I DON’T doubt that the agencies are understaffed. I’m positive that they ARE understaffed.
Comment by Small Town Liberal Thursday, Mar 25, 10 @ 11:01 am
Actually, YDD, it doesn’t “mirror” what the GA changes were. For example, the GA memebrs get a higher percentage of their FAS when they retire, and they get either CPI or 3%, while teacher, for example, will get either 3% or half of CPI, whichever is less.
And it’s ironic that people like Bill Brady talk about making Illinois a competitive state when it comes to attracting business and jobs, but they don’t follow through on that in a situation like this … the retirement age for teachers in Illinois is MUCH higher now than in neighboring states. I’d guess there may be fewer and fewer of our prospective teachers staying here to teach for a career.
Comment by YNM Thursday, Mar 25, 10 @ 11:06 am
So, there can still be double and even triple dipping–just not collected while you’re still working? Did I read that right?
Comment by Responsa Thursday, Mar 25, 10 @ 11:06 am
And, by the way, forcing this legislation through when most of the impacted groups were already in the midst of discussions to bring about many of the same (though perhaps less severe) changes is not courageous. And doing it while most of the teachers in the state are out on Spring Break - not so courageous either. Doing something that angry taxpayers with pension envy wants done in an election year? Not courageous.
Now, passing a much needed bill like HB174 … THAT would be courageous. And, as Pot indicated, might bring some of the angry folks back around to supporting them, but it might not win any favors with the voting public in an election year. THAT would be courageous.
We’ll see how much courage they actually have.
Comment by YNM Thursday, Mar 25, 10 @ 11:17 am
1. IF they SS they get the benefit
2.The funnieest comment has to be….”I agree we need to fix this system– but the cuts for judges seem draconian. If the pension for judges is 60% of $106k (roughly $65,000), why would ANYONE want to be a judge? I made way more than that right out of law school. I can understand the $106k cap for most other pensions, but this completely ignores the reality of the legal marketplace and will inflict substantial harm on the qualify of our judiciary. ….”
Judges are getting about $180K now plus automatic COLA and there is no lack of applicants….20 years from now they will get $300K and the cut is pretty sweet.
If there is a shortage I am sure the SC will fill the vacancies. LOL
Eden Martin pretty much ended his tenure as a credible source
Comment by CircularFiringSquad Thursday, Mar 25, 10 @ 11:19 am
For about the 3rd or 4th time, here is why it will be next to impossible to change the benefits of CURRENT workers or retirees going forward.
There is a state constitutional guarantee of no diminishment of benefits for members of the state pension system, whether they be current or past employees. An almost identical constitutional provision exists for state judges’ salaries, presumably to insulate them from salary retribution for the decisions they make.
Our former illustrious governor Blago tried to eliminate the judges’ COLA raise one year. The judges sued and successfully overtuned the wage freeze, citing the annual cost of living raise to be a constitutionally protected benefit. If you don’t think AFSCME’s and SEIU’s attorneys don’t know the case law and precedent, and would use it in their arguments, think again. And who would decide the case? The same state judges whose raises were once threatened; wonder where their sympathies would lie, especially with the precedent they themselves helped establish?
Dream all you want, folks…it’s a non-starter.
Comment by Six Degrees of Separation Thursday, Mar 25, 10 @ 11:21 am
Wow! The GA finally did their job! Hallelujah! Too bad they didn’t do it last year when Governor Pat Quinn proposed it but they didn’t have enough guts to tackle it. Maybe they should go back and revisit some of his other so-called “goofy” ideas; like a tax increase!
Comment by Both Sides Now Thursday, Mar 25, 10 @ 11:24 am
It ain’t every day that a party will thoroughly and en masse buck a huge bloc of its biggest contributors/supporters. You may think that’s easy. I say you’re deluded or naive or both. lol
I see it similarly as a guy whose house is on fire, refusing to admit it while the fire spread from the basement to the attic forcing him to the roof.
To his neighbors who have pulled out their garden hoses and have been spraying down the fire, the fact that he is finally forced to jump off the roof, isn’t an act of courage, but an act of a delusional man finally coming to his senses.
Doing this is just a first step. If this is courage, what’s would you call legislative foresight, a miracle?
Yeah - for these clowns, it would be.
Comment by VanillaMan Thursday, Mar 25, 10 @ 11:39 am
The Teachers unions (and their talking points) are certainly well represented here among comments here at Capitol fax blog, looks like too many have too much time on their hands. Why don’t they go after the real villains (bloated school administration)???
Just like all US Senators see themselves as President some day, most teachers are hoping to make it to an administrative position so they don’t go all out to cut the bloated fat they know exists in school administration.
Comment by talking points Thursday, Mar 25, 10 @ 11:44 am
YDD is right - Judges, as well as all of us, can contribute to various investment instruments (IRAs 401ks, deferred comp, etc) as a part of a retirement plan. Any credible financial planner is going to tell you to be diverse in your investments. If you have that amount taken right off the top of your salary it seems less painless, at least it does to my wife and me. Too many people don’t save enough - we have poor saving habits in this country.
This is reasonable if not courageous. Not for MJM. He won’t be hurt by this in his district. His risk is in the turnover of the house to the GOP. MJM is not a fool. He can read the tea leaves. If he can get this thru, the unions may revolt but the voters may retain enough dems to keep his majority. That’s what counts. Political reality is moving things along. That is a good thing.
Comment by dupage dan Thursday, Mar 25, 10 @ 11:48 am
What other courageous acts due MJM and Culleton have up their sleeves? Could this legislative session have a couple of more blockbuster bills on tap? As Jimmie Buffet says “Only Time will Tell.”
Comment by JOHNNIE C Thursday, Mar 25, 10 @ 11:49 am
The judge issue is not whether or not there will be applicants for future positions, it is the quality of the aoolicant pool. The position remains very attractive to public sector employees like assistant state’s attorneys and public defenders and lawyers in some of the less populated counties downstate as the pay is a substantial increase and the pension is an improvement over what they currently have. Going forward, it is much less attractive to Cook County and collar county private practitioners under 55 years of age. Would an experienced private practitioner in a civil law specialty in their mid forties give up a good practice to take a judgeship when the job when a judicial pension maxes out at about 65k? Do you want your divorce case/custody issue or complex business dispute decided by someone who practiced for about five years prosecuting or defending misdemeanor cases?
Comment by Simple Simon Thursday, Mar 25, 10 @ 11:50 am
My earlier point regarding unions is this: In the past, the state and municipalities have been able to borrow their way to cover wage increases, etc. That opportunity has now passed.
Now Joe Sixpack is earning $30.000 and seeing his public employee neighbor drawing in $40,000 plus with incredible medical benefits AND a lucrative pension.
If Joe’s given a choice of paying more in taxes, or seeing the AFSME members benefits being cut, I’m pretty certain he’ll vote against a tax increase.
In February, there were how many tax referendums for school districts around the state? And I believe exactly one passed (if that many).
Voters are tired of taxes and look forward, now, to the opportunity to vote their disgust.
Comment by Downstater Thursday, Mar 25, 10 @ 11:53 am
Most Cook County judicial positions are filled now by former Assistant State’s Attorneys, public defenders, and/or somebody’s brother- or sister-in-law. The judicial pension cut isn’t what stops good private practitioners from being a judge. It’s the elective system.
Unfortunately, merit selection is further away than ever.
Can we have a do-over on that con-con vote? Oh yeah. We just have to wait another couple of decades.
Comment by Anonymous Thursday, Mar 25, 10 @ 12:05 pm
Can we have a do-over on that con-con vote? Oh yeah. We just have to wait another couple of decades.
Fortunately also to judges, state pensioners and pensioners-to-be.
Comment by Six Degrees of Separation Thursday, Mar 25, 10 @ 12:14 pm
Like I stated yesterday in another post, if I was an ultra-rich Illinois earner and cared for just a second, for my amusement, about the budget/pension crisis, I would laugh at lower-wage workers ripping each other up about unionization and pensions. It would be just the way I like it: division of the lower-wage workers so that they won’t unite and negotiate together for better standards of living while I pay next to nothing in state income tax and have other shelters for my wealth.
The courageous thing to do would be to have a progressive state income tax, like other states have. A poll of Illinois registered voters was done a few years ago wherein 66% of voters support a progressive income tax. This might mean something. I met with a few state pols and was told that there is very little support for this tax among the legislators. Senator Steans told me that her bills got little support, and they were put aside. State Rep. Chapa-LaVia told me that raising the income tax on the richest 1% would drive them out of the state. Where would they go, Indiana? So many other states that have income taxes have higher rates than Illinois. I saw a CTBA statistic last October that shows that during the last few (or more) years, the top 1 or 5% of earners earned substantially more than the rest of us. Let’s not talk about raising their taxes; let’s talk about ripping on government employees who have such unfair and undeserved perks. $60,000 per year with a less than modest pension is way, way too much for these people.
Comment by Stoned Prophet Thursday, Mar 25, 10 @ 12:19 pm
Ok, bond raters, please put us one notch past the deadbeat threshold.
Comment by vole Thursday, Mar 25, 10 @ 12:30 pm
=Why don’t they go after the real villains (bloated school administration)???=
talking points, school adminstration as the state counts it only amounts to about 2.5% of school budgets.
When you use “apples to apples” comparisons for supervision and adminstration with using private sector metrics and criteria, the percentage for administration is closer to 11%.
This discounts things like superintendents deducting their expense to visit classrooms and walk the halls as “instruction” instead of “administration”.
In the past a large part of teacher and administrator expense was classified under “Tort” because ostensibly they were preventing students from getting injured and suing the district.
But I digress.
The point is that cutting adminstration costs by as much as half would help, but wouldn’t even cover a single year of staff raises.
The gutsey call here for Madigan would be prohibiting school boards from agreeing to contracts exceeding new revenues in a district to prevent cutting programs to pay for excessive raises.
Most districts increase spending by about double the rate of inflation every year, a much faster increases than revenues.
Requiring raises to be balanced with new revenues would slow the rate of growth and need for additional state funds, and slow the growth of the foundation level to minimize general state aid.
Since MJMs already stirred up the hornets nest, why not go for the full reform package?
Comment by PalosParkBob Thursday, Mar 25, 10 @ 12:33 pm
Did I miss something? What stops the future leaders from skimming the pension funds or not making payments? If they can still avoid payments, what difference does it make?
Comment by Enemy Of The State Thursday, Mar 25, 10 @ 12:48 pm
YDD, you miss the point. Sure judges can contribute to a separate investment plan– but they can also do that as private attorneys. Good attorneys in private practice make way more than judges, so the only real incentive for a good attorney to want to be a judge is the pension. Without the pension, the best attorneys are now going to pass. I know two top lawyers that are currently running for judge but are now considering withdrawing from the race. In short, if the judicial pensions are slashed, you will NO LONGER see lawyers lining up to take the job, and we will be stuck with the bottom feeder attorneys. That is bad for the state of the judiciary in Illinois.
Comment by the dark horse Thursday, Mar 25, 10 @ 12:48 pm
- Downstater - Thursday, Mar 25, 10 @ 11:53 am:
Now Joe Sixpack is earning $30.000 and seeing his public employee neighbor drawing in $40,000 plus with incredible medical benefits AND a lucrative pension.
$40,000 per year salary with a lucrative pension? The average state worker’s pension is around $18,000 per year. Many state employees would have to work for 40 years to get 70% of $40,000 as their annual pensions, per a union official. Again, we’re fighting it out, the $30,000 per year earner vs. the $40,000 per year earner, while the very wealthy have money-saving strategies and pay almost nothing in state income tax.
Comment by Stoned Prophet Thursday, Mar 25, 10 @ 12:57 pm
Random thoughts
Should the unions have made a deal? They probably could have gotten a better outcome than they got yesterday, but they wouldn’t pull the trigger.
I don’t see union members abandoning the Ds in large numbers. Where else is there to go? Kind of serendipitious, but I guess if the Ds had to screw the unions at some point this was pretty much the perfect year to do it; AFSCME for Brady?
Comment by steve schnorf Thursday, Mar 25, 10 @ 1:12 pm
Anyone have the link that shows how each legislator voted? Thanks for doing my leg-work for me…
Comment by AC/DC Bag Thursday, Mar 25, 10 @ 1:42 pm
**Anyone have the link that shows how each legislator voted?**
http://tinyurl.com/yg52he4
Comment by dave Thursday, Mar 25, 10 @ 2:06 pm
Thanks Dave!
Comment by AC/DC Bag Thursday, Mar 25, 10 @ 2:14 pm
The roll call can be found oon ilga.gov, which is actually working today despite being down during the debate yesterday.
Comment by YNM Thursday, Mar 25, 10 @ 2:15 pm
Iowans pay state income tax on a sliding scale of 3 to 9%. That hasn’t stopped the Iowa Quad Cities from growing at a rate exponentially higher than the Illinois side or stopped the Iowa side from attracting the wealthiest residents. The difference is the perception that Iowa schools are superior and residential property tax is higher in Illinois. No state tax on pensions hasn’t persuaded Iowans to move to Illinois when they retire. It’s not about state income tax rate, which is a small part of the overall tax burden, particularly for the wealthy.
Comment by 3 beers to springfield Thursday, Mar 25, 10 @ 2:20 pm
darkhorse, you are right on the money
Comment by Simple Simon Thursday, Mar 25, 10 @ 2:26 pm
Stoned Prophet,
I’m talking about an existing state worker. While there are attempts to drum up class warfare between high and low earners, as we read about the state and municipal budget crisis, the class warfare is starting between those with public sector jobs and those without.
It’s sad to see it, but it’s very true.
Comment by Downstater Thursday, Mar 25, 10 @ 2:40 pm
Stop blaming unions! If it weren’t for my union, I’d be making minimum wage and have no benefits - just like Wal-Mart employees. Actually, I’m ok with age 67. That’s the same age as social security and no ones complaining about that. Most of us get 60% of our salary if we work until we are at least 60 years old. I will never come close to making $106,800, so, I’m ok with that too. But, I am not going to apologize for expecting the state to pay my retirement as they promised when I started working here. That means I will have worked 30 years and will receive %60 of my salary - @$26,000. If you think that is a cadillac pension, you should take a look at the GA’s pension plan.
Comment by lincolnlover Thursday, Mar 25, 10 @ 2:44 pm
Dark Horse,
=Good attorneys in private practice make way more than judges, so the only real incentive for a good attorney to want to be a judge is the pension=
What I know about attorneys who wish to be judges indicates they don’t go for the job for the pension. If you are a high priced attorney, why go for the moderate pension that even judges get?
It makes no sense. Attorneys choose to seek a judgeship for the perceived prestige. Judges upon retirement are found as “of counsel” in some of the high toned law firms and this adds to the rainy day fund, as well. Judges certainly make more than I do, more than my gov’t lawyer wife does. If we can put a few bucks away in an investment, so can the 6 figure judge. To say the only “real” incentive to become a judge is the pension just ain’t so.
Comment by dupage dan Thursday, Mar 25, 10 @ 2:46 pm
Dupage Dan, everyone has their own motivations for doing things. But, for most GOOD attorneys, they are making way more than a judge makes. You can have all the prestige in the world, but it doesn’t pay the bills. MOST good attorneys are not going to want to become judges in the absence of a good pension. As a result, the quality of our judiciary will suffer. Period.
Comment by the dark horse Thursday, Mar 25, 10 @ 3:02 pm
DarkHorse,
There are many people who come to public service from high paying jobs. They put in some years in that arena and then move into the private sector again to fill up the coffers again. I don’t see those good attys who make the big bucks stooping for the current pension - not extravegant by any measure. They want to be judges - they don’t expect to be enriched by the pension. Period.
Comment by dupage dan Thursday, Mar 25, 10 @ 3:18 pm
If i were the unions, I would just completely withdraw from the campaign process this cycle. No contributions to any party. They should all band together and boycott 2010. I think that would send a strong message.
Comment by Easy Thursday, Mar 25, 10 @ 3:19 pm
DuPage, you’re missing the point. An experienced private practitioner in mid-career will take a pay cut to go on the bench if the benefit after 20 years is a decent pension. But at 66k, no way!
Comment by Simple Simon Thursday, Mar 25, 10 @ 3:33 pm
And keep in mind that this 66k pension ceiling includes everyone: Professors at state medical schools; School superintendents in Barrington, New Trier, Naperville, The President at U of I in Champaign. Goodbye, professional talent!
Comment by Simple Simon Thursday, Mar 25, 10 @ 3:41 pm
FWIW—-For me, someone who is not on a state or federal payroll or in a union, this thread has been quite enlightening. (And not necessarily in a good way.)
Comment by Responsa Thursday, Mar 25, 10 @ 3:58 pm
You beat me to it, Simon. Yes, it also applies to the law school and med school professors at U of I, NIU, SIU, and UIC. The credibility of these programs will be damaged as a result.
Comment by the dark horse Thursday, Mar 25, 10 @ 4:02 pm
I’ve got a very naive question. While the state has to provide the pension money to pay former employees, what are the union pension fund dollars that we hear of the union’s investing in real estate, casino’s etc. Are these simply different unions than AFSME, etc.?
Comment by Downstater Thursday, Mar 25, 10 @ 4:28 pm
DSer-
The state pension systems cover both union and non-union employees and has nothing to do with any union pension plans. I am not aware of any union pension plans that supplement the state plans.
Comment by Six Degrees of Separation Thursday, Mar 25, 10 @ 4:44 pm
Downstater, those investments are from the Teamsters, AFL-CIO and the like.
Comment by Simple Simon Thursday, Mar 25, 10 @ 5:14 pm
I just got forwarded IFT email My earlier theory that this was a deal with the unions -forget it I think its triangulation -with the Voucher vote.
Was there a GOP landslide in 2008 or something
The GOP may PO their social base at times but have never ever done this to theri big money -Boehner was just selling his servcies to the big banks the other day
Wo just think if there a half way credible third party candiate on the ballot that would gladly take millions in ad money and GOTV workers and …
Good Thing for Quinn …..Oh
I will be honest if I think this is fair but If I were the dem base -well I would end his term this November to send a message
Comment by western illinois Thursday, Mar 25, 10 @ 6:34 pm
This proposal could be damaging to state universities, if the pension limit is $106,000, since faculty are often hired at salaries higher than that. This would make it difficult to hire, if the effect is that the hirees would not be pension-eligible, since hiring at this level is highly competitive, and other universities are offering pensions.
Comment by Rod Thursday, Mar 25, 10 @ 7:20 pm
DarkHorse/SimpleSimon,
Both of you are missing the point. Defined benefit programs like pensions are obsolete - untenable. You can’t promise what you can’t provide. The rest of the working world is not receiving pensions. The folk out there see the pension programs and they bristle. These are the people who pay for it and they have to live on their private retirement plans, if they could even afford them. Proving you are right won’t win over the people who pay - the voters. They perceive an inequity. Period.
Comment by DuPage Dan Thursday, Mar 25, 10 @ 7:50 pm
Teachers can collect Social Security if they had another job that collected the tax. School districts do not collect SS taxes.
The problem is a law that was passed in the 1980’s called the Government Pension Offset. This law reduces the SS amount significantly. (Of the state pension systems, only IMRF annuitants can collect their full SS payment. It’s on their website.)
So, retired teachers like myself will not collect the full amount due from Social Security. In fact, my SS is so reduced that when I qualify for Medicare I will not be able to pay the insurance premium from my SS check.
I worked two jobs for the first half my teaching career working in retail, restaurants, and tutoring programs besides going to school for more courses beyond my masters degree. So I did not make a lot of money but I feel I should get the full amount of SS payments.
The vast majority of us receiving TRS pensions are not getting the huge pensions everyone is screaming about.
TRS annuitants do not get free health insurance. We pay premiums each month. Granted that the state has subsidized the health insurance and that will no doubt be significantly reduced just it has for the current state employees.
It amazes me to read the comments some people make about how someone else has it better and let’s cut them down. If business can stab their employees in the back let’s let the state do that, too.
When I was a young teacher in the 1970’s I went to my first IEA Legislative Day. We visited with the reps and senators who assured us that our pension system was OK even though the state was not paying in the required amount even then.
“Don’t worry. Everything’s fine, your pension system is going to be there for you”
Yeah, right.
Comment by Nearly Normal Friday, Mar 26, 10 @ 8:16 am
Good to see so many people are knowlegdeable about politics and government. A couple thoughts on what’s been blogged:
concerning one of the “bill’s highlights” (Would stop compounding annual cost-of-living benefit increases; those increases would be based on 3 percent or one-half of the consumer price index, whichever is less.) — compounding would still take place for judges and GA members. Just not regular employees. The “shortage” of state workers is in part made up by a multitude of state contracts to retirees who work in their old agencies while drawing pension. To Stoned, while IL has low income taxes, it has one of the highest property taxes in the country — adding to the progressiveness of IL’s tax structure. Lastly, where’s the shortage of teachers?
Comment by KnowNonsense Saturday, Mar 27, 10 @ 1:39 pm