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Republicans and Madigan posture while Quinn obfuscates

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* The SJ-R editorial board is growing weary with Republicans over the debate on the governor’s proposed borrowing bill, which would be used to pay off past-due state debt. The bill requires a three-fifths majority in both chambers, so GOP votes are necessary to pass it. So far, the Republicans have just talked in generalities about what they want in trade, and the SJ-R is right to be impatiently tapping its foot…

We’d also be more supportive of Republican opposition if we could tie it to a specific demand. But we’re getting various signals from the Republican camp, from a call to address the “structural deficit” to a demand for reform of the state’s workers’ compensation system to more budget cuts.

The Medicaid and pension reforms passed in the last session were major steps toward fixing the structural deficit. From where we stand, those measures appear to be just the start. If there are specific budget cuts to make, let’s hear them.

We are on record as favoring workers’ comp reform, and we believe the exposure of an outrageous tally of workers’ comp payouts for repetitive stress injuries at Menard Correctional Center — uncovered in a series of stories by the Belleville News-Democrat — makes such a movement inevitable.

But we don’t think this is the bill to hold hostage for nebulous demands for spending cuts or a workers’ comp concession. Illinois’ expensive and confounding workers’ compensation system may be a hardship for business in Illinois, but so is waiting months for payment from the state.

If Republicans want economic stimulus for Illinois, they should pay the businesses, schools, hospitals and others that have been waiting patiently for their money for months. Leave the debt-holding to the professionals.

If the GOP wants budget cuts, let’s see ‘em. If they want workers comp reform - and aren’t actually hiding behind a generic call for reform while privately fretting what the reforms would do to their allies at the Illinois State Medical Society - then let’s see ‘em. That three-fifths requirement for passing the borrowing bill puts the GOP at the table as a full partner. It’s time they started playing some cards.

* By the way, the governor’s budget office has done the math for how long it would take to get the state’s payment cycle down to 60 days without the borrowing bill: Ten years…

“If the policy decision were made just on the math, the policy decision were made that rather than borrow $8.75 billion, the idea was to take the tax increase revenue and pay down this backlog of bills, whether it’s 12 months or 18 months … couldn’t that be done?” [Sen. Matt Murphy] asked.

Not without “decimating” state government, Weems said. But he conceded that it was possible if one were just looking at the raw numbers. To maintain state services like education and health care, and pay down the backlog, it would take about 10 years, according to [Malcolm Weems, associate director of Gov. Pat Quinn’s Office of Management and Budget].

And this was a very good point by Weems…

He said that paying off vendors quickly helps the state get the best deals it can from its contractors.

“What we’re finding is we have vendors that choose to cancel contracts, and they want to re-bid them because they are going to ask for a higher rate,” Weems said. “We have some vendors that don’t want to participate, and they don’t want to answer any of our solicitations at all. They don’t want to enter into a new contract with the state. We’ve had some bigger vendors who have tried to get us to agree in the contract to pay in advance.”

Again, if the Republicans want to be honest brokers, they’ll offer up some actual plans. If they just want to score points, well, they’ll continue doing what they have been doing, which is nothing.

* However, it would also help if the governor’s office would start being upfront with the General Assembly about what’s really going on with the current fiscal year’s budget. The state’s budget director failed to show up for an important committee hearing yesterday, so one of his assistants was drawn and quartered for effect. But he also dug his own holes…

When asked whether funding for human services could be cut during the last four months of the current budget year, Weems responded: “There has been no decision on any of that.”

Would Quinn propose human service cuts for the upcoming budget? “There is a wide array of different scenarios we are discussing,” he replied.

Could the governor back up his claim of cutting spending by $3 billion in past years? “I can give you some examples of cuts,” Weems said, offering about $250 million worth.

1) There have most certainly been discussions of cuts to Human Services’ budget. Period.

2) Budget cutting scenarios? Really? That’s not what the department directors are saying. And if they are doing scenarios, aren’t those “discussions”? If so, see point 1.

3) Don’t tout $3 billion in cuts if you can only tally $250 million.

Sheesh.

* Speaker Madigan talked in generalities yesterday about more possible reforms…

House Speaker Michael Madigan hinted Tuesday that more changes are possible to state employee pension and retiree health benefits — including the constitutionally sticky possibility that future retirement benefits for existing employees could be reduced.

On their first full day back since a blizzard canceled last week’s legislative session, members of the Illinois House spent more than an hour bickering over changes in the chamber’s rules. As that debate ended, Madigan, D-Chicago, gave a rare speech ticking off the politically poisonous choices House members will have to make in “the next three to four to five months.”

Those choices could include reducing future pension benefits for state employees, he said.

“We’re all familiar with the inadequate funding of the state pension systems,” Madigan said. “Again, tough decision-making, telling people you’re not going to get everything you thought you were going to get, telling people you may have to pay in more. Not easy stuff. So we all better get ready for it.”

But…

“You’ve already changed it going forward,” Madigan said of the pension changes for new hires. “But now we are working on bills that would change it midstream. A state worker would be told, ‘All right, you have a state benefit package up to today. Starting tomorrow, it’s going to be a different deal.’”

Afterwards, Madigan spokesman Steve Brown cautioned not to portray his boss as “an advocate” for such an approach but that he is merely saying there “is going to be a discussion, and we’ll see where that discussion takes us.”

Brown would not divulge details of any legislative package the speaker may be considering.

Reality or more posturing? It’s posturing until we see an actual bill.

* Meanwhile, watching the Cook County budget fight play out reminds me of how budget cuts often play out in Springfield. First, somebody in the upper levels releases a doomsday plan that cuts vital services and doesn’t touch non-essentials. State’s Attorney Anita Alvarez is playing a very old tune…

“A 10 percent reduction for the Cook County State’s Attorney’s Office cuts deeply — deeply — into vital services that the people of this county cannot do without,” Alvarez told county commissioners during the start of the budget hearing.

Court reporters who record grand jury proceedings, victim-witness “specialists” who aid and help crime victims navigate the justice system and 58 assistant state’s attorney’s would be shown the door, she said. […]

Preckwinkle said her staff offered suggestions on cuts, including support staff, but never directed her to cut assistant state’s attorneys.

“She has chosen to propose cuts that involve significant layoffs of lawyers — that’s not the only way in which she could reach her goal of 10 percent,” Preckwinkle said.

* Related…

* Both parties in state Senate hand out raises: At the same time they were fighting an income tax hike and calling on Democrats to cut the state budget, Republicans in the Illinois Senate handed out raises to top aides and other staffers worth an average of 4.9 percent

* Obama Plans to Rescue States With UI Debt Burdens: President Obama is proposing to ride to the rescue of states that have borrowed billions of dollars from the federal government to continue paying unemployment benefits during the economic downturn. His plan would give the states a two-year breather before automatic tax increases would hit employers, and before states would have to start paying interest on the loans.

* Budget squeeze could make HIV treatment costlier, rarer: Thousands of low-income Illinoisans who have the AIDS virus could find themselves with fewer choices for life-sustaining medicines and more hurdles to get treatment, as the state continues to grapple with an unprecedented budget crunch amid increased demand and high drug prices. Illinois has reduced the number of medications available to patients or has capped how much can be spent on the drugs through a state assistance program. Officials also have added layers to the process of how to sign up for — and stay enrolled in — the state-run AIDS Drug Assistance Program, which pays for medicines for poor and low-income Americans.

* Metro-east lawmaker pushes for pension system audit: “The pension systems keep saying everything is OK. Either they don’t know it’s not OK, or they don’t want us to know what the whole truth is.”

* Economist presents money solutions to Illinois lawmakers

posted by Rich Miller
Wednesday, Feb 9, 11 @ 7:47 am

Comments

He did introduce a bill
http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=84&GA=97&DocTypeId=HB&DocNum=149&GAID=11&LegID=54714&SpecSess=&Session=

Comment by belagarth Wednesday, Feb 9, 11 @ 7:54 am
The Springfield GOP has been all twitipated abut the loss of funding for the high school rodeo championship, 1 million dollars from the State. If they want cuts so bad why are they not peppering the air waves with its a good start but we needmore like this.

This is the heart of the problem, the GOP wants cuts, but not to any program in any area where there is a gop eected official. In otherwords its all hypocrisy and politics at its worse. We need solutions not campaign points.

Comment by Ghost Wednesday, Feb 9, 11 @ 8:12 am
I think HB0146, which quickly went from Rules to the Executive Committee yesterday, is more of a tidal wave for current state employees, and will be vigorously fought. I’m wondering if the beginning date of the bill will stick, if the bill itself is challenged in the courts, or if it will slip till the end of the court challenge. I can “retire” now to avoid the more onerous provisions, so it would be great if I could get a reading on that from some of the more lawyerly types here.

Comment by PublicServant Wednesday, Feb 9, 11 @ 8:20 am
Rich, I read about the unfunded pension prolbems and have to ask is the fund for the General Assembly funded at a higher rate than say SRS or the Teachers Retirement systems. And also why do me have so many systems when the state is paying the bulk of the bill. Would it be less costly to roll these systems into one large system. I would think return on investments would be better with larger sums to invest.

Comment by nieva Wednesday, Feb 9, 11 @ 8:29 am
on the economist article, currie is so quick to dismiss! just because she may not check the website does not mean that others will not. she seems out of touch.

Comment by spartan Wednesday, Feb 9, 11 @ 8:31 am
How do Republicans expect to pay for the staff pay hikes they just authorized without more borrowing? What a bunch of hypocrites.

Comment by just sayin' Wednesday, Feb 9, 11 @ 8:33 am
- King Michael of Madigan doesn’t give a damn about something sillylike the state constitution. -

Yes, because an Appellate Court is the final say on constitutional matters.

Comment by Small Town Liberal Wednesday, Feb 9, 11 @ 8:35 am
The GOP keeps missing opportunities to be taken seriously. Put something down on paper, in bill form, and sell it.

Comment by wordslinger Wednesday, Feb 9, 11 @ 8:45 am
This is all posturing, even if there is a bill & support by all of the leaders. I don’t know what the triggers are, but I imagine that the austere plans being put forth would kick the state into Social Security.

I wonder where the state will find the money to pay into Social Security? The Feds won’t wait 6 to 9 months and they definitely won’t take a promise; they’ll want cash up front. Since the structural deficit includes the 6% the state has not paid for years, its easy to imagine the hole having to pay that to the Feds would blow in the budget.

Comment by Pot calling kettle Wednesday, Feb 9, 11 @ 8:48 am
Correct me if I’m wrong, but the interest rate on the $8.5 billion in bonding would certainly be less than the 24% interest we’re paying Medicaid providers under the Prompt Payment Act and the 12% interest we’re paying all other vendors.

One way or another, we ARE borrowing money. The only question is whether we’re going to borrow it from state vendors and pay credit card interest rates or borrow it from a bank and pay mortgage interest rates.

Seems like a no-brainer if you want to portray yourself as fiscally responsible.

Comment by Yellow Dog Democrat Wednesday, Feb 9, 11 @ 9:06 am
I’ll tell you what. I’ll agree to forfeit a substantial percentage of my hard earned pension when these wealthy politicians and “chicago civic committee” money moguls agree to contribute the same percentage from their million dollar portfolios. Or do they only want to fix the problem on the backs of the working middle class?

Comment by james martin Wednesday, Feb 9, 11 @ 9:10 am
YDD is 100% correct.

For a party that portrays itself as being “experts” in finance, and “fiscally responsible” the GOP is using fuzzy math and living in a fantasy world.

There should be some name to associate with this silly GOP fiscal policy. GOPmath or something like that.

Comment by Walter Mitty Wednesday, Feb 9, 11 @ 9:12 am
As opposed to the Quinn ,madigan and cullerton math that shows we have a constitutionally mandated balanced budget every year.

Comment by Fed up Wednesday, Feb 9, 11 @ 9:23 am
I beleive most of the cuts would come at the expense of a largely Democrat constituencies. Republicans appear to be smart in not being specific. Let the Democrats bring down the hammer.

Comment by Trusth Seeker Wednesday, Feb 9, 11 @ 9:46 am
Yeah,Fed, and we also have a constitutionally mandated guarantee that pensions will not be impaired or diminished. The US constitution, as interpreted by the US Supreme Court, also guarantees the contractual rights of current employees and pensioners. So go ahead,legislators, and violate both constitutions with this stupid idea and then you can all impeach yourselves. This will only cost, not save,the state money.

Comment by Bill Wednesday, Feb 9, 11 @ 9:53 am
I’ll be the first to admit I’m not a borrowing expert, but what is wrong with borrowing the money and paying it back over 10 years? Take 2 billion from the income tax increase for the next 4 years and pay down the debt, and then structure the rest for the remaining 6 years. Won’t that cost the state a whole heck of a lot less money in the long run.

Comment by Jaded Wednesday, Feb 9, 11 @ 10:26 am
Aside from messing with current employees, the bill reads like one more set of empty promises to “fully fund” (90%) the pension fund by 2045. Where have we heard that before?

Comment by Retired Non-Union Guy Wednesday, Feb 9, 11 @ 10:26 am
===Republicans appear to be smart in not being specific.===

Of course, people who can spell their names correctly probably appear to be smart to you too. You’ve set the bar pretty low with that typo.

The House GOP doesn’t want to propose anything and doesn’t want to vote on anything. That’s not smart, it’s lazy and self-serving. And it’s not what they were elected to do, which is to legislate.

Comment by 47th Ward Wednesday, Feb 9, 11 @ 10:27 am
- 47th Ward - Wednesday, Feb 9, 11 @ 10:27 am:-

Cross has introduced an actual bill on pension reform that would affect current and future IL employees. It’s a system that would allow current state employees to choose from three different plans, all of which would result in lower costs to the state. Cross’ spokesperson reported that Cross has already had preliminary discussions with Spkr. Madigan about this plan.

One of the linked SJR articles states “Madigan’s spokesman, Steve Brown, said the speaker did not have any specifics in mind when he made his comments [regarding all the tough issues that need to be tackled this session].”

So who is posturing and who is actually rolling up the shirt sleeves and proposing legislation?

Comment by lawyerlady Wednesday, Feb 9, 11 @ 11:06 am
As for the pension reform last year that was supposedly a ‘major step’ towards fixing the structural deficit, if you’ve read any analysis by economists on this, you’ll realize that those reforms won’t help us until long AFTER the pension system runs out of money. So, no, this problem isn’t what I would call solved.

Comment by lawyerlady Wednesday, Feb 9, 11 @ 11:10 am
would love to hear what Commissioner Fritchey thinks about the proposed cuts from Alvarez. Hear it got a bit hot in the Board room yesterday between Commissioners and Alvarez. Is she bluffing with her moves? Cause from the read it does not seem like she’s cutting where she could really cut.

Comment by amalia Wednesday, Feb 9, 11 @ 11:23 am
Yello dog Democrat,

I agree with you. I am a very fiscally conservative gent, but the borrowing needs to be done now. My only concern is that it should be front loaded rather than rear loaded so the Governor and legislators recognize NOW, this is no final fix. We will still need massive costs cuts even with the tax increase and this borrowing.

Comment by downstate hack Wednesday, Feb 9, 11 @ 11:25 am
Change it to when you retire you pay the same percentage of your health care as you did working. It will take a barganing chip off the table for the union and save the state a lot of money.

Because.. if you retire and then pay much higher health cre premiums, then when you were working, the union (as they did on their pension contributions) will just recoup it all back with an extra cost of living raise. This will make it fair for everyone.

One of the biggest problems this state has gotten itself into thanks to Blago and John Filan is an unsustainable salary table. example; at 3% annual raise for 5 years positions that have very limited (in IDOC shift resposibility … Major). This position will retire out at approx. $140,000 per year. There are about 150 of these positions in the IDOC. Not just picking on that position as there are many more examples in the state.

Comment by Suggestion Wednesday, Feb 9, 11 @ 11:40 am
Memorandum on the legality of pension reform for current state employees:

http://www.senatedem.ilga.gov/phocadownload/PDF/PensionDocs/sidleyaustinpensionmemo.pdf

Comment by Worth It Wednesday, Feb 9, 11 @ 12:37 pm
=== There should be some name to associate with this silly GOP fiscal policy…===

voodoo economics? or maybe Reganomics…..

Comment by Ghost Wednesday, Feb 9, 11 @ 12:49 pm
Remember how the fear of opening up this very issue was a big reason why the con-con referendum failed in 2008? Well, it looks like it’s going to have to be opened up anyway, just in a far more costly, confusing and painful manner involving years of court battles….

Comment by Secret Square Wednesday, Feb 9, 11 @ 12:54 pm
That memo is R. Eden’s viewpoint. Abner Mikva’s viewpoint, supported by most legal experts, is the exact opposite in that changing prospective benefits is diminishment and is therefore unconstitutional.

Comment by PublicServant Wednesday, Feb 9, 11 @ 12:59 pm
The reluctance to move on the pension bill is probably caused by both sides trying to figure out how they can apply these reductions to the TRS and SRS plans without diminishing the plan which applies to legislators and judges.

Comment by Irish Wednesday, Feb 9, 11 @ 1:17 pm
I understand that there are differing opinions on the legality of the issue and a challenge is guaranteed. However, reading this blog for some time now, it has been stated that such reforms are unconstitutional when in reality, like much law, it is not settled or a slam dunk and will be up to the court’s interpretation. Because the matter is not entirely settled the debate on further reform should not be taken off the table.

Note: I have not been able to find Mikva’s opinion where he specificly lists precedent (as Martin does), if there are specific cases he or others site please let me know where I can find them.

Comment by Worth It Wednesday, Feb 9, 11 @ 1:29 pm
Irish, I agree completely, that is the other way around the issue. Could other consideration be given that still equates to substantial long-term savings? I’m not sure how that would have to be balanced.

Comment by Worth It Wednesday, Feb 9, 11 @ 1:31 pm
Irish, sorry misread your comment…though your point is unfortunately also true.

My point is can they reduce pension benefits, while giving on pension related items that would make the “diminished or impaired” portion of the law left up to interpretation. ie) Was the total package of the pension truly diminished, just because monetary savings can be realized by the state. I doubt they would be able to thread that needle, if its even possible.

Comment by Worth It Wednesday, Feb 9, 11 @ 1:42 pm
The problem is that the pension systems are not the problem.

Its like trying to fix a broken bar door by selling your horses.

The State borrowed money from the penson for years by redirecting the contributions. The problem is the State needs to put back the money it borrowed, and be prohibited from not making the full pension contribution every year.

Pass a law to mandate that the pension payment has to be made. Pay back the fund the money that has been previously borrowed,and were done.

Most of the giant pension contribution is repayment of the previous borrowing, not a broken or overly generous plan. The General assembly did 10 billion in bonds to put back money in the various pension plans, then the general assembly approved spending plans which redirected the States contributions over the next few years out of the fund effectively zeroing out the extra money from thebonds! Just stop borowing from the pension payments and we are good.

Comment by Ghost Wednesday, Feb 9, 11 @ 2:31 pm
Oops. Dunno what happened. Earlier post was there, then not, now back. Sorry for the double post.

Comment by ExPress Wednesday, Feb 9, 11 @ 2:34 pm
To the partisans who constantly try to use the Rodeo as a big stick to whack Republicans: Please Stop the rhetoric. The rodeo is a revenue generatorfor the state and local economy. FACT!

Very simply, more money is brought into the state than is spent. Plain and Simple. And those “expenses” paid out by AG are re-spent over and over and over again in the local economy.

Quinn’s office cut the rodeo because it is held in republican districts. R’s have not been supportive of the borrowing so this is the short sided payback. All while business lose out on revenue and employees lose out on wages and the government loses out on related taxes. Sad state of affairs.

Comment by Disgusted now Wednesday, Feb 9, 11 @ 3:13 pm
It doesn’t matter if it is constitutional to change the pensions of current employees. The state cannot afford to make significant downgrades because any saving will be more than offset if the state fails to meet the Social Security Agency’s minimum retirement benefit requirements.

http://www.ssa.gov/slge/revenue_procedure_91-40.htm

The SSA’s minimum requirements include final and highest average pay formulas and only discuss defined benefit programs. “To meet this minimum retirement benefit requirement with respect to an employee, section 31.3121(b)(7)-2(e)(2)(i) of the regulations generally requires that a retirement system provide benefits to the employee that are comparable to those provided in the Old-Age portion of the Old-Age, Survivor, Disability Insurance program…”

Comment by Pot calling kettle Wednesday, Feb 9, 11 @ 3:31 pm
The layoffs were NOT based on seniority as reported. The layoffs were based on seniority within job classifications. This is a huge difference!! Employees who have worked for the county for 9+ years were let go while some employees who had only been with the county for 5, 4 or even 1 year were saved. The layoffs were unfair and have created a sense of mistrust. ASFCME informed their union members that although seniorty within job classifications was in the contract- it would be impossible for layoffs to happen because management had never fixed the problem with job classifications. Management had given their word and had 2 plus years to fix the problem with classifications-but it never happened. The job classifications had 2 employees doing the same job and in some cases literally sitting next to one another-doing the exact same work– but one employee made $30,000 while the other employee doing the same job made $63,000. Layoffs based on strictly seniority would have been the only fair way to do it… but that DID NOT happen. The layoffs were based upon seniority WITHIN job classifications NOT base seniority. This has allowed for some employees hired within the last 5 years to keep their jobs while those with 9 or 10 plus years to be let go. How is that fair??????????????

Comment by Shirley440 Monday, Feb 14, 11 @ 12:47 am