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We’re number one! And that’s not a good thing

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Illinois

* Oy…

Illinois has the worst funded public pension system among the 50 states, according to a Pew Center on the States study released Monday.

The Land of Lincoln joined Connecticut, Kentucky and Rhode Island for having among the poorest funded public pension systems in the nation.

In 2010, the most recent year data for all 50 states is available for the study, each of those four states had an unfunded pension liability of at least 55 percent, according to the report.

“For states that do face really severe funding challenges … it’s a competition between raising taxes, cutting services or finding ways to reduce the costs for both current employees and retirees,” David Draine, senior researcher for the Pew Center on the States, a nonprofit that studies issues facing state governments.

It’s a sentiment that Gov. Pat Quinn and others have been reinforcing. Quinn often says that as public pension costs in Illinois rise, they squeeze out other areas of state government.

“How much more information do we need from independent, outside entities to tell us we must make this giant step?” Quinn said during a news conference Monday.

The full study is here.

* One of the ways of reducing the state’s costs is by shifting some of them down the food chain to local school districts, universities and community colleges. The latter two have already agreed to paying the employer portion of the pension costs. The school districts have not, and they’re being back-stopped by the House and Senate Republicans.

As subscribers already know, the governor’s office generated a list that purports to show that most school districts can handle the cost-shift. The Sun-Times also had a story today…

More than half of Illinois’ 800-plus school districts have more than one year’s worth of operating cash on hand, suggesting some downstate and suburban school systems might be able to shoulder part of the funding burden for educators’ pensions.

Those numbers from the State Board of Education were released Monday as Gov. Pat Quinn and the four legislative leaders prepare for a round of late-week negotiations on a package to help solve Illinois’ $83 billion pension crisis.

A Quinn aide Monday night said the results demonstrate that shifting some pension costs away from the state to school systems won’t pose a catastrophic financial hit to them.

“The bottom line is school districts can certainly afford to have a stake in the contracts they negotiate, and overall the numbers make it clear there is no excuse not to do pension reform and do it quickly,” Quinn spokeswoman Brooke Anderson said. […]

In its analysis, the State Board of Education cautioned that its figures are dated and don’t account for continued delays in state payments, a cut in the state education budget of $258 million and a possible diversion in corporate personal property replacement tax revenues to fund pension obligations, as some in the Legislature have advocated.

Taking those all into account would leave 128 of the state’s school systems in the red with no cash reserves by next June, the agency reported.

“A point-in-time measure from one year ago can’t be used as a measure of any district’s wherewithal or ability to sustain an ongoing liability,” said Mary Fergus, a spokeswoman for the State Board of Education. “These figures do not account for rising expenses, declining local revenue or a district’s long-term plans for these funds.”

* But a subscriber who works at a school district sent me this e-mail today…

Payroll and benefits for most districts is paid on a 12 month basis due to tax law. And, the 180 days is days in ession, not counting weekends. In reality, costs do not go down when not in session. The summer is when a great deal of maintenance work is performed, as well as purchasing for the upcoming year. We really are a year-round operation.

Also, keep in mind that many districts received 40+% of their revenue just days before the fund balances are reported to the state due to property tax receipts. Only a small portion of our revenue is received throughout the year. You really need to look at cash flow, which is an entirely different thing. I’m not disputing 313 days is still likely significantly more than needed, but it’s not entirely what it seems.

* Publicly, at least, the Republicans are still opposing the cost-shift idea…

Democrats say the proposal would force schools to be more accountable when they dole out pensions to employees. Republicans agree but say it also would drive property taxes up as schools look for money to cover the pension costs. Quinn argues that the shift would have an “imperceptible impact” on schools if it is phased in over 10 years or longer.

Senate Republican leader Christine Radogno, of Lemont, said it’s a policy conversation worth having but that the plan should not be tied to larger pension reforms that lawmakers agree on. Radogno contended that Democrats are purposely trying to delay broader pension changes until after the November election so they can avoid angering unions that typically support them at the polls.

“This is a stall tactic,” Radogno said.

Quinn said politics should not factor into the equation.

“I really don’t see the Election Day as really the key date. I think the date is really right away for pension reform,” Quinn said. “It’s beyond me how you can let this one issue hold up a fundamental overhaul of our public pension system that has been in the waiting for three decades.”

* Even so, at least one local school district decided not to wait for the cost-shift to take effect…

Democrats’ chief argument in trying to shift pension costs to local schools after decades of the state paying the bill is that school boards, by raising teachers’ salaries, hike pension costs without having to pay for it.

[Warrenville Unit District 200 Superintendent Brian Harris] said the District 200 school board has heard that argument loud and clear.

He helped finalize a contract just last week that takes away automatic 6 percent raises for teachers at the end of their careers that help raise their retirement benefits. Many school districts still have such provisions.

posted by Rich Miller
Tuesday, Jun 19, 12 @ 10:29 am

Comments

–“This is a stall tactic,” Radogno said.–

That doesn’t make any sense. State workers are plenty honked at Dems for their proposed pension changes. They’re not getting points for the holdup.

The stall is coming from the suburban GOP who want to keep Downstate and Chicago taxpayers footing the pension bills for their six-figure teachers and quarter-million-dollar superintendents.

Comment by wordslinger Tuesday, Jun 19, 12 @ 10:40 am
Oh boo hoo.

All Illinois taxpayers are footing the bill for Chicago pensions because of how the funding formula was changed to send more money to the Chicago schools. The per capita funding for Chicago children far exceeds the amount sent to the rest of the state. Much of that is diverted to pensions.

The so called fairness is just another slight of hand to force a tax increase on to the citizens while making the State’s bottom line look better. To the taxpayer a tax is a tax regardless of which of the 7000+ Illinois taxing authorities is sending the bill.

Comment by Plutocrat03 Tuesday, Jun 19, 12 @ 10:47 am
I read that the Teachers Retirement System (TRS) Board was currently in meetings to determine, among other matters, whether the plan would reduce its expected annual rate of return. Doing so would increase the state’s contribution amount. I understand this sort of increase would be shifted onto the local school districts’ books according to the pension-cost-shift idea.
Considering that the returns projected by most public pension plans are laughably high, has anyone projected the cost to school districts (property tax payors) going out say 10 years as the pension plans adopt an incremental step-down of their numbers to match reality?
Also, has anyone projected out 10 years or so as to the impact of this additional burden on local property tax payors and the value and marketability of their homes?
I see Rep. Louis Lang blogging here once in a while. Rep. Lang, the Niles Township HS system pension plan (your district) is at 50% pension funding according to Maria Pappas’ web-site. Do you have a projection what a cost shift will do to homeowners in your district in say 10 years?

Comment by Cook County Commoner Tuesday, Jun 19, 12 @ 10:47 am
This is a perfect example of the duplicity of the General Assembly. When they want more control, they rail about how local government and school districts only exist because the state created them. When that philosophy becomes too expensive or problematic, then the the GA wants the locals to provide and fend for themselves. What a great system for the GA!

Comment by One of the 35 Tuesday, Jun 19, 12 @ 10:50 am
Warrenville Unit District 200 Superintendent Brian Harris] said the District 200 school board has heard that argument loud and clear.

He helped finalize a contract just last week that takes away automatic 6 percent raises for teachers at the end of their careers that help raise their retirement benefits. Many school districts still have such provisions.

A smart fiscally responsible move. So rare in Illinois.

Comment by downstate hack Tuesday, Jun 19, 12 @ 11:00 am
Here’s a solution, put the TRS pension funding back under the category of “education funding” and distribute the pension money the same as General State Aid.

Comment by Michelle Flaherty Tuesday, Jun 19, 12 @ 11:01 am
Does Governor Quinn think we are stupid or what. First he raises the proposal of the pension cost shift to school districts and the Speaker puts himself and several suburban Democrats in the hot seat during hearings defending the concept, then suddenly the Governor abandons his support for the bill in favor of the Republican idea of pension reform without the cost shift. The Speaker hands the Governor and the minority leaders the bill and it fails, case closed.

So now the Tribune article has the Governor stating that the shift would have an “imperceptible impact” on schools if it is phased in over 10 years or longer. Then it quotes the Governor: “It’s beyond me how you can let this one issue hold up a fundamental overhaul of our public pension system that has been in the waiting for three decades.”

The Governor is rolling around like a rock’em sock’em robot, he is equivocating, and he is not driving home his policy position. Quinn should have backed the Speaker in the last two days of the Spring session and forced the Republicans to explain to their right wing tea party base why they are supporting local school districts handing out pension deals to suburban school district employees out of all state resident’s income taxes. Politics is what this is all about and the Governor needed to get directly political, he failed completely on this issue.

Comment by Rod Tuesday, Jun 19, 12 @ 11:07 am
Well, the nice thing about being the worst is that we can only improve from here. Right?

Comment by 47th Ward Tuesday, Jun 19, 12 @ 11:18 am
Sen. Radogno. the money has to come from *somewhere,* doesn’t it? If not local property taxes, then where? Where? A proposal anyone? Hello?

Comment by Ray del Camino Tuesday, Jun 19, 12 @ 11:19 am
So as a tax payer I am paying the new taxes from the recent state income tax increase. A lot of this was supposed to cover pension issues. Now the solution after the GA stiffed the pension funds for several years is shovel the problem off to the local district so I get to pay some more through property taxes at the local level. Just put the state tax at 6% and be done with it and cut the shell game. GA can claim whatever nonsense they want. I am still going to get billed at the federal, state, and local level.

So the GA and Gov feel justified in this shift because schools have reserves? What good business does not have reserves? Who fixes that roof, replaces HVAC systems, covers the insurance increases, and all the other immediate costs that hit a business? Maybe I should go to my local grocer and say I will just take those steaks since you have a reserve? I should not have to pay, my neighbor will cove the cost.

Comment by zatoichi Tuesday, Jun 19, 12 @ 11:20 am
Word - I’m not a pension expert by any stretch, but isn’t it the case that downstate districts don’t pay the employer part either, therefore Chicago taxpayers are footing the bill for their teachers’ pensions as well?

I tell ya, somebody (downstate and suburban legislators) cut a heckuva deal on that one. For the life of me, I can’t understand why, as a Chicago taxpayer, I have to pay property taxes to help pay the employer portion for Chicago teachers AND income taxes to fund the employer portion for downstate and suburban teachers. If the taxpayer roles were reversed, can you even imagine the outrage in those areas of the state? It would be off the charts.

Comment by Thoughts... Tuesday, Jun 19, 12 @ 11:27 am
Wordslinger @10:40,

Mega Dittos!

The best solution is to freeze property taxes and shove the pension down to the local level.

This will finally force every school board and municipality to make the decisions us little people have had to contend with since the gravy train ended in 2007-8.

There is no reason for any local employee to out earn the governor of the state, and it’s time some one either forced those cuts - possibly even codifying such a salary cap.

Comment by Bruno Behrend Tuesday, Jun 19, 12 @ 11:33 am
Does every school district receive the same $/child from the state?

Comment by Downstate Tuesday, Jun 19, 12 @ 11:36 am
So in the Article it says Stevenson has almost $73 mil in cash reserves… That is a ONE school district. Not 10 schools in the district ONE. Perhaps instead of consolidating schools in the red, start with the ones in the black…. The salaries paid for one school are ridiculous… Start with inequities of the one school districts… Get those kingdoms solved and build up… Money could be saved…

Comment by WOW! Tuesday, Jun 19, 12 @ 11:36 am
The truth as to why Chicago pays for its teacher pensions while the State picks up the tab for everyone else isn’t as sinister as some here are making it out to be. Chicago created and funded a pension system for their teachers before such a system existed statewide. When the State created its system, since Chicago already had one it was left out. That’s all. No sneaky, backroom deal. Chicago was already covering itself, so the State created a system to cover everyone else.

Comment by TwoFeetThick Tuesday, Jun 19, 12 @ 11:50 am
=== One of the ways of reducing the state’s costs is by shifting some of them down the food chain to local school districts, universities and community colleges ===

@Rich -

There’s a fair — and I think well-founded — argument to be made that the Democratic proposal is to END cost-shifting.

I think journalists have been inconsistent in this regard. When we found out that the taxpayers were footing the bill for the pensions of non-government employees, no one accused the state of “cost-shifting” to end the practice.

Its hard to argue that ending the practice of state government paying the pension costs of non-state government employees is any different.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 12:23 pm
@Downstate -

The short answer is “Yes”, although its distributed in two categories, General State Aid and Poverty Grants.

I’ve argued that the Simple Solution is to raise the school funding levels for both to the Education Funding Advisory Board’s recommended levels (right now they are 23 percent underfunded), but fund the poorest school districts first.

When the money runs out, the money runs out.

Sorry, Plainfield and Kenilworth.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 12:27 pm
==I can’t understand why, as a Chicago taxpayer, I have to pay property taxes to help pay the employer portion for Chicago teachers AND income taxes to fund the employer portion for downstate and suburban teachers.==
As another Chicago taxpayer, I don’t understand this either. But I also can’t understand how the cost-shifting proposal will pass, since there are a lot more legislators from suburbs+downstate than Chicago. Assume all Chicago legislators vote for it; you still need quite a few folks to vote against the self-interest of their constituents.

Comment by Robert Tuesday, Jun 19, 12 @ 12:28 pm
Shifting the payments to the payroll of the school districts and universities is a must to ensure the payments are made in the future. The problem is the politicians refuse to follow up with funding. IEA has proposed a cut in benefits in exchange for a funding guarantee which would then come under the constitutional protection but the politicians refuse this option. Instead the are trying to pass a constitutional amendment to muddy the legal waters around the pension guarantee.

Comment by Professor Tuesday, Jun 19, 12 @ 12:33 pm
Why does a cost shift have to be all or nothinhave theg? Some districts have the funds on-hand to be able to absorb these costs without a tax increase, and some don’t. Why can’t ISBE annually review each district’s finances and determine how much each district will pay based on how much it has? Districts in the red don’t pay, those in the black do, provided doing so won’t put them in the red and force a tax increase. Districts in the middle could pay a portion and the State would continue to pay for a portion.

Comment by TwoFeetThick Tuesday, Jun 19, 12 @ 12:49 pm
Geez, swype really massacres things sometimes. That first sentence should read: “… all or nothing?”

Comment by TwoFeetThick Tuesday, Jun 19, 12 @ 12:53 pm
” Why can’t ISBE annually review each district’s finances and determine how much each district will pay based on how much it has?”

So a school district would benefit by tinkling away its reserves?

Comment by Happy Returns Tuesday, Jun 19, 12 @ 1:14 pm
@TwoFeetThick -

Which is my solution is so elegant.

If you fund schools proportional to their property tax base — those with the lowest property tax base per child get fully funded and those with the wealthiest property tax base per child get the least — then you automatically account for a school district’s ability to pay.

Your solution, on the other hand, would either encourage schools to:

1. Squander money, as Happy Returns points out;

2. Continue to offer lavish salaries to administrators;

3. Keep their property taxes as low as possible, knowing the state will bail them out.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 1:31 pm
=== He helped finalize a contract just last week that takes away automatic 6 percent raises for teachers at the end of their careers that help raise their retirement benefits. Many school districts still have such provisions. ===

Do we need a stronger argument for the Madigan provision?

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 1:32 pm
My local district is listed as having 196 days cash on hand. That is as of June 30, 2011. During the month of June, they received $97 million property taxes. So, just a few weeks before that end of the fiscal year, they had 51 days of cash on hand. Just some perspective on those cash balances…..

I agree with the cost shift (then we know it will get paid, and there needs to be some give from all parties in the pension game), with a lengthy phase-in. I also agree that the General State Aid should be increased at the same time (this formula benefits the poorer districts)- maybe increase GSA 50 cents for every dollar of the cost shift.

Comment by archimedes Tuesday, Jun 19, 12 @ 1:50 pm
From the SJ-R newspaper article:

“1. Illinois: Had 45 percent of the $138.8 billion it owes long-term. Consistently failed to make its full pension contribution from 2005 to 2010. Lowered pension benefits for future employees in 2010. Now officials are negotiating a proposal to reduce cost-of-living increases for both current and future employees.”

It says Illinois consistently failed to make its full pension contributions between 2005 - 2010. This appears to be an attempt to make it look like this is a ‘recent’ problem only caused because the State skipped out on funding for 5 years.

Rich - Any idea how many times Illinois fully funded their pension obligations between 1970 and 2004?

Comment by Jechislo Tuesday, Jun 19, 12 @ 1:51 pm
==Just put the state tax at 6% and be done with it and cut the shell game.==
Finally, a common sense, ethical, constitutional, and fair solution and don’t forget about taxing services like they do in Wisconsin.

Comment by Anonymous Tuesday, Jun 19, 12 @ 1:55 pm
YDD, I like your idea as long as they fix the TIF loophole in the funding formula.

Comment by yinn Tuesday, Jun 19, 12 @ 1:59 pm
http://teacherpoetmusicianglenbrown.blogspot.com/2012/04/view-of-illinois-pension-dilemma-pt-i.html

Glen Brown’s article tells the history of funding under each of the governors.

Comment by Inactive Tuesday, Jun 19, 12 @ 2:11 pm
zatoichi @ 11:20 am:

The last income tax increase was only intended to pay the pension contributions for two fiscal years. Now, that wasn’t necessarily the message the taxpayers received from the news coverage, they made it sound like a complete, permanent solution to the long term pension underfunding but when you took the time to read all the way to the end of the proposal and news stories at the time, the truth was there. At lot of the increase was just to keep on spending as usual. 1/2 of 1% of that increase is permanent and was intended to pay off bonds the State never approved / issued to pay off the “ongoing bills backlog”.

The blunt truth is just going to 6% probably isn’t a large enough increase given the inability to seriously prioritize & cut on the spending side. Much more drastic cuts Than what has been done so far are going to be needed before it is all over with.

Comment by RNUG Tuesday, Jun 19, 12 @ 2:13 pm
@Happy Returns

If a superintendent is going to tinkle away $73 million of a district’s reserves to avoid paying the cost shift, they are not going to keep their job.

@YDD

You and I are essentially saying the same thing: districts that can afford it should pay it. Those that can’t shouldn’t be forced to raise additional taxes to do so. If you want to use EAV to determine who can pay and how much, that sounds good to me.

My point is it doesn’t have to be all or nothing.

Comment by TwoFeetThick Tuesday, Jun 19, 12 @ 2:20 pm
==Any idea how many times Illinois fully funded their pension obligations between 1970 and 2004==

The state never fully funded their pension obligations during this time period.

Comment by Bill Tuesday, Jun 19, 12 @ 2:21 pm
Any potential solution to any of the pension systems are short term as long as the governor and general assembly have their hand in the cookie jar. As long as the gov and the GA control the benefits, the funding and most importantly the investments, any change is doomed to fail. The solution is an evolution to an IMRF type system free of direct political control. IMRF is much more solvent because it has actually been managed like a pension program. Employer rates are set annually based on an actuarial analysis on each individual unit of government. Direct state funding of TRS should be phased out over time with the same dollars going into general state aid. Then downstate and suburban districts would fund their pensions as does Chicago, with general state aid funds.

Comment by Taxhound Tuesday, Jun 19, 12 @ 2:25 pm
@TwoFeetThick -

Glad to hear we agree. My point is that it has to be based on ability to pay. Not “willingness.”

My proposal also neatly attacks the decades-old problem of school finance reform. Rather than trying to achieve a tax increase that provides property tax relief and raises funding across-the-board across the state, simply fund schools according to their property wealth.

There is simply no reason for Illinois to be providing either property tax relief or school funding for the state’s wealthiest school systems, especially at the expense of care for low-income seniors and people with disabilities.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 2:37 pm
@Yinn -

I’m not sure what you mean by TIF “loophole”, but I’m sure its fixable.

As far as I know, property in a TIF district is still counted as part of the property tax base of a school district, even if the district doesn’t receive a penny from increased valuations.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 2:40 pm
- Yellow Dog Democrat - Tuesday, Jun 19, 12 @ 2:37 pm:

“There is simply no reason for Illinois to be providing either property tax relief or school funding for the state’s wealthiest school systems, especially at the expense of care for low-income seniors and people with disabilities.”

Amen to this. However, I’d take it further. There is no reason to provide free “education” for anyone that can afford it regardless if the entire district is wealthy or not.

Comment by Bobby Hill Tuesday, Jun 19, 12 @ 2:57 pm
“simply fund schools according to their property wealth.”
YDD-
If you seriously don’t see any problem with this proposal, your partisan blinders are so thick you are blind to the world in front of you.

Comment by Anonymous Tuesday, Jun 19, 12 @ 2:59 pm
“There is no reason to provide free “education” for anyone that can afford it regardless if the entire district is wealthy or not.”
You, too, Bobby. You may love wealth redistribution but not all your neighbors agree with you.

Comment by Anonymous Tuesday, Jun 19, 12 @ 3:01 pm
Longtime neighbors on my block had an informal get together last weekend to celebrate the return home and return to health of one of us after a serious surgery. Our county’s first installment real estate tax bills had just been due and the subject arose of how they had gone up quite substantially since last year. One said they had discussed it and were about $2000 away from the max tax tipping point of selling out and leaving the state. Two different homeowners who have lived in their houses here for a while, and have satisfied their mortgages, said they were now paying more in real estate taxes per year than they had paid for 12 months of mortgage payments. This is not right and it is not sane. It cannot continue.

Comment by Responsa Tuesday, Jun 19, 12 @ 3:07 pm
–There is no reason to provide free “education” for anyone that can afford it regardless if the entire district is wealthy or not.–

Article X, Section 1, Illinois Constitution.

Comment by wordslinger Tuesday, Jun 19, 12 @ 3:08 pm
@Jechislo -

Pew has only been doing pension analysis since 2007. Although you’re correct that its misleading, I wouldn’t read anything nefarious into their reporting.

According to a story in the SJ-R way back when, pension deficits date back at least as far as the 50’s.

The bigger problem with the news coverage not just with Statehouse News but all the way “up” to the Tribune editorial board is this stubborn fact:

“Investment losses suffered by pension funds during the Great Recession have been a key driver of growth in states’
unfunded liabilities…Most plans projected a gain of 8 percent in 2008; instead, the median loss was 25 percent.”

In fact, as of 1999, Illinois’ pension system was 89% fully-funded.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 3:08 pm
- Anonymous - Tuesday, Jun 19, 12 @ 3:01 pm:
“You, too, Bobby. You may love wealth redistribution but not all your neighbors agree with you.”

Huh? Me either. I don’t think my neighbors should pay for my kid’s education if I can pay for it myself.

Comment by Bobby Hill Tuesday, Jun 19, 12 @ 3:08 pm
If the people talking about pension shift jacking up property taxes were serious, they would be helping downstate counties pass PTELL referendums.

Comment by Allen Skillicorn Tuesday, Jun 19, 12 @ 3:23 pm
Warrenville D-200 did away with the 6% end-of-career raises. Just the threat of a cost shift is already having a therapeutic effect.

Comment by reformer Tuesday, Jun 19, 12 @ 3:24 pm
- wordslinger - Tuesday, Jun 19, 12 @ 3:08 pm:

Article X, Section 1, Illinois Constitution.”

Pardon me for implying others should not get what they are entitled, sick and old be damned.

Comment by Bobby Hill Tuesday, Jun 19, 12 @ 3:24 pm
@Anonymous 2:59 -

First of all, I’m not sure what’s so partisan about it. Most of the poor in Illinois are rural and white.

This is not a Democratic plan, its a fiscally conservative plan.

Rather than every school district in Illinois taking a haircut just so that we can continue to send some money to the wealthiest school districts in the state, we should make sure that those school districts that have the greatest need are fully funded.

This is really not very different than the approach that we just took with Medicaid, lowering the eligibility threshold.

Let’s take Kenilworth, for example.

The $300K per year that state government spends there may not be much.

In fact, it doesn’t go too far in Kenilworth at all, where less than 36% of tax dollars end up in the classroom because the average administrator makes $156K a year…nearly 50 percent more than the state average.

Currently, Kenilworth is taxing itself at a rate of 2.5% for their schools.

In Springfield, by contrast, property owners are taxed at 4.6%.

The reason for the disparity is that Springfield has a EAV per pupil of $138K while Kenilworth’s is $829K. In other words, Kenilworth has more than 6 time the property wealth that Springfield has.

If you think homeowners in Springfield should shoulder higher property taxes of low-income parents should be kicked off of Medicaid just so Kenilworth can afford to pay a couple of administrators $150K each, I’d love to hear the rationale.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 3:32 pm
@Wordslinger -

From the Illinois Constitution:

“The State has the primary responsibility for financing
the system of public education.”

Currently, Illinois provides 27 percent of the funding for Springfield schools, and is funding education at well below the recommended levels for all school districts - rich and poor - across the state.

Educational advocates have always argued that the Constitutional interpretation is that 51% of the funding for local school districts should come from the state.

All I’m suggesting is that an equally defensible position is that 100% of the funding for 51 percent of school children should come from the state, and from a public policy perspective it makes more sense to fully fund the needs of the poorest districts before funding the wealthiest a single penny.

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 3:42 pm
Rich has a link to a great article from Paul Simon in 1971 warning about the underfunded pension system.

capitolfax.com/PaulSimonpensioncolumn.pdf

People seem to have no clue that politicians have contributed less to the pension system than the social security contribution they are not required to pay.

Comment by Liberty_First Tuesday, Jun 19, 12 @ 4:22 pm
I couldnt get the link to open. How underfeunded in 1971?
I have questions about numbers?
In 2010 the Pwe reports says we are 75 nillion underfunded. Since 2010 payemnets have been made and there has been no crash so how is it now 83 billion?
We also have a teir 2 pension that was sold at the time as closing the long term gap and saving 100 billion. What happened to those savings?
The pew repoat said that 80 percent is a good funding ration for a state for Illinois it would mean we are much less short

Comment by western illinois Tuesday, Jun 19, 12 @ 4:31 pm
http://www.capitolfax.com/PaulSimonpensioncolumn.pdf

The problem is really simple, for the entire life of the systems the state is supposed to put in about 9%. with the employee contributions that money should grow and compound. The state doesn’t pay much more than half its share, there is less money to compound. All the savings from the tier 2 are from the state having to pay less into the system for future employees- nothing makes up for the missed payments which is why they want to take the COLA and insurance away.

Comment by Liberty_First Tuesday, Jun 19, 12 @ 5:07 pm
Thanks Liberty. I see it was 34% then 75-80 was and still is considered good. 65 was OK I think it still would be. I think that could be done wo violating the constitution.
I am still trying to figure out how SURS began payiing more for its COLA many years ago

Comment by western illinois Tuesday, Jun 19, 12 @ 5:33 pm
This is a link to the Commission on Government Forecasting and Accountability set up by the general assembly which has all the pension info you need. Charts on starting on page 26 show major problem is lack of contributions. In 2007 before the crash when the market was riding high, the pensions were 62.6% funded

http://www.ilga.gov/commission/cgfa2006/Upload/FinCondILStateRetirementSysFY%202011Mar2012.pdf

Comment by Liberty_First Tuesday, Jun 19, 12 @ 6:00 pm
@Liberty -

As I’ve pointed out, back in 1999 the unfunded pension liability was a rather paltry and much more manageable $15 billion.

Since then:

1) The tech bubble crashed
2) 9-11
3) First Bush Recession - 2001
4) State revenues fall, Rod refuses tax hike, skips pension payments instead;
5) Second Bush Recession

Comment by Yellow Dog Democrat Tuesday, Jun 19, 12 @ 9:01 pm
The solution is obvious. Invest the state’s pension funds in high interest paying Greek bonds.

Comment by wishbone Wednesday, Jun 20, 12 @ 1:12 pm