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* Subscribers learned of this development yesterday afternoon…
A coalition of labor leaders said Wednesday that House Speaker Michael Madigan is considering asking for a vote on pension cuts for lawmakers and state workers — but not teachers — when lawmakers return to Springfield for one day next month.
Legislation that has already been approved by the Illinois Senate would cut back annual pension benefit increases if workers wanted to keep state-subsidized health care.
Teachers weren’t included in the package because a deal couldn’t be reached over shifting future pension costs of teachers from the state to local schools — an idea Madigan has backed.
Lawmakers are planning to head to Springfield Aug. 17 to debate the possible expulsion of state Rep. Derrick Smith, a Chicago Democrat indicted on bribery charges. But they could do pension work, too, if they wanted to.
Subscribers also found out a lot more this morning about what’s going on.
* React…
A coalition of unions representing state employees issued a statement Wednesday slamming the proposal as “unfair” and “unconstitutional.”
“This bill would gut the provision allowing retirees on fixed incomes to keep up with rising costs. It would burden retirees with the overwhelming share of the state’s pension debt, punishing middle-class public servants for the sins of politicians,” according to the statement from the We Are One coalition.
Gov. Pat Quinn has been urging action on pension reform since lawmakers left town in May, but he wants lawmakers to act on a plan that includes pension changes for schoolteachers and university employees.
“I’d like to get to the finish line completely. I think everyone understands the importance in Illinois of comprehensive pension reform,” Quinn told reporters Tuesday. “It’s our moment, and I would really like to see the legislature roll up their sleeves and get the job done sooner rather than later.”
On Wednesday, Quinn spokeswoman Brooke Anderson added, “The governor would like to see all the necessary steps taken to eliminate the unfunded pension liability and restore fiscal stability to Illinois.”
The bill will require a three-fifths vote to pass, so its future is, as they say, “in doubt.”
Thanks to Erickson for the hat tip, by the way.
Discuss.
posted by Rich Miller
Thursday, Jul 26, 12 @ 10:11 am
Sorry, comments are closed at this time.
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What retirement systems were covered in the Senate bill? Does it include SURS or only SERS?
Comment by Redeft Thursday, Jul 26, 12 @ 10:14 am
SERS and GARS only.
Comment by Rich Miller Thursday, Jul 26, 12 @ 10:15 am
Pat Brady is really going to go nuts if Madigan accomplishes something good for the state.
What is the IL GOP going to have to scream about going into November?
Comment by too obvious Thursday, Jul 26, 12 @ 10:27 am
Did I just see the Tribunes “ohh face”?
Comment by Obamas Puppy Thursday, Jul 26, 12 @ 10:36 am
Maybe the AG workersa have the right idea.
I wonder what the Democratic National Comittee thinks about The Dems of the President’s home state alienating unions going into a highly contested election. This Gov and his cohorts have taken a whack at seniors, the disadvantaged, unions, children in high risk situations. How does that all play out on the national scene? And our Dem Governor is soliciting the help of the CCC and the IPI in his efforts. I think he is working the wrong side of the street.
Comment by Irish Thursday, Jul 26, 12 @ 10:37 am
The north shore-which until recently had been dominated at the state legislative level by folks like garret, schoenberg et al, right now is swamped in signs for Arie Friedman and other republican candidates like I haven’t seen in a very very very very long time, even more than any of the congressional candidates and there are some hot races. Madigan can do what he wants, his people don’t realize how much ill will they have in the formerly swing areas of the suburbs. This is not going to change his situation, at least in the north suburbs this fall.
Comment by Shore Thursday, Jul 26, 12 @ 10:53 am
I have been a retired teacher for 7 years. I was told I would get a 3% cost of living increase every year, and be able to join the state health care insurance program, at cost to me, upon retirement in writing. The state also took an extra 1% out of my check for this health care insurance, in addition to the 9% for my pension. Now they want me to choose between my health care and cost of living increase. As a retired teacher I do not qualify for medicare. I retired because they told me this is what I would have in retirement, and now they want me to choose between health insurance and cost of living increase. A clearly unconstitutional plan, and I hope the teachers’ unions sue the state!
Comment by Billy Thursday, Jul 26, 12 @ 10:56 am
If such a bill were to pass, how would that affect the state’s budget, specifically, the pension payment. Would the annual payment be reduced in the expectation of reduced pension costs? Would that free up money for other things? Paying down debt? Or new programs? The thought of this legislature and Quinn with “extra” money makes me nervous.
Comment by cassandra Thursday, Jul 26, 12 @ 10:57 am
Billy——–since the rules may change, say your decision to live on reduced retirement has changed too. Demand your job back!
Comment by geronimo Thursday, Jul 26, 12 @ 11:02 am
HoW about the opportunity for another “structured roll call”? Think about it. They already know on a poll basis who’s in trouble.they can structure a roll call that requires an enhanced majority that they know won’t pass. Besides, know that the Roberts court has made this the law of the land, everyone, including existing state employees will Have obamacare anyway eventually. The essence of this bill was to make annuitants choose;now the choice has evaporated. The only thing I see out of this is another run on an underfunded pension system, something that is penny wise but pound foolish.
Comment by Madison Thursday, Jul 26, 12 @ 11:03 am
Cassandra,
There’s no effect in the current budget because the so-called “choice” employees would have to make wouldn’t take place until the second half of the fiscal year. There could be savings in next year’s budget, but those savings would most likely be in the form of the pension payment not going up as much as it would otherwise.
Comment by Michelle Flaherty Thursday, Jul 26, 12 @ 11:03 am
Since the odds of the Senate amendments to the House bill being passed by 3/5ths of the House are about nil, Madigan has again shown his brilliance. Now Dems can run as trying to be reformists on pensions while actually doing nothing, Dems will blame and denigrate Republicans as being obstructionist, unions will not actually see any changes in benefits (wink wink nudge nudge) and the whole mess will be kicked down the road until after November at the cost of $13M a day.
Comment by Cincinnatus Thursday, Jul 26, 12 @ 11:03 am
===We reiterated to him today our willingness to work with the legislative leaders to develop a fair pension solution.===
We Are One - what does this solution include? Let’s hear it.
Comment by Foxfire Thursday, Jul 26, 12 @ 11:08 am
Will be interesting to see the actual savings once folks make their choice…. Increase vs Health Care. I am opting for the Annual pension increase. However, I am unclear on one aspect…. Will current state employees opting for the annual pension increase when they retire… Be denied access to state health care plans prior to their retirement?
Comment by Albert... Thursday, Jul 26, 12 @ 11:08 am
Madigan may bring this up for a vote, but will he encourage support for its passing?
Comment by Wensicia Thursday, Jul 26, 12 @ 11:19 am
Cincy, are you still a believer that the Dems are taking all this heat to protect unions? Amazing.
What’s the grand conspiracy behind the facility closings?
The only ones being protected right now are rich school districts who don’t want to pay any pension costs on the six-figure salaries they dole out.
Shore, if yard signs decided elections, Ron Paul would be a shoo-in for his second term right now.
Comment by wordslinger Thursday, Jul 26, 12 @ 11:23 am
Firefox, The IEA has proposed the members take on an increase percentage of salary payment in exchange for the state pass legislation that brings the state funding under the constitution protection. The supreme court has already ruled the pension benefit is guaranteed but the legislature can fund pensions any way they want.
The senate strategy appears to be to give Quinn bargaining power with the union and to set the issue up for a court test.
Comment by Liberty First Thursday, Jul 26, 12 @ 11:31 am
Cassandra / Michelle,
You’re confusing the effective date of SB-1313 with the new bill. PA-97-0695 was effective “immediately” but as a practical matter will be close to Jan 1, 2013 and could affect the last half of the FY13 budget.
The effective date of the new bill is July 1, 2013, beginning of the next fiscal year. So the savings, if any, would show up in FY14. If everyone opts to keep the COLA, there will be zero effect on the pension fund. The insurance is paid out of the State’s annual revenues, basiclaly GRF, so any savings would be there. If the numbers I’ve seen thrown around are accurate, that would be a maximum of $800M for all the retirees and somewhat less for just GARS / SERS.
Comment by RNUG Thursday, Jul 26, 12 @ 11:35 am
It would be premature with the lawsuits against SB-1313/PA-97-0695.
If the courts rule the health insurance for 20 years of service are protected, all the new bill would do is offer a choice between two protected benefits. With no consideration in the choice, it wouldn’t pass muster.
Heard about some of the probable rates. I won’t go in to all the details other than to say it looks people with dependents may have to pay the entire dependent cost. That tells me the State is hedging its bet and maybe thinking they will lose the lawsuits … so if they can’t get money out of the retirees, they’re going to get it out of the dependents. All this may be still subject to whatever deal the unions can make.
Also, re Obamacare / ACA, it doesn’t begin to take effect until 6 months after the choice deadline in this bill. So right now ACA isn’t a solution either.
Personally, as a non-Medicare retiree with a dependent, those proposed rates will cost me a ton. Told the wife last night we need to get divorced and for her to give me her share of the house; then she’ll qualify for Medicaid coverage.
Comment by RNUG Thursday, Jul 26, 12 @ 11:40 am
RNUG - You’re wrong. HB1447 has an immediate effective date.
Comment by Anon Thursday, Jul 26, 12 @ 12:06 pm
It seems to me that, especially now that ACA is safe, retirees who have to choose between cola and health insurance would, by a substantial majority, choose the cola. I wonder if any polling has been done on this issue. In any case, in this scenario, there could be a huge drop in retiree health care expenditures charged to the the GRF. What will we do with all that money.
One thought-JBT may be right when she says that ACA will bring about a big increase in Medicaid costs, as a result of the “woodwork” effect. So any savings might get taken up by Medicaid costs, however much our pols might prefer to spend the savings on patronage and “new programs.”
Comment by cassandra Thursday, Jul 26, 12 @ 12:09 pm
“This bill would gut the provision allowing retirees on fixed incomes to keep up with rising costs. It would burden retirees with the overwhelming share of the state’s pension debt, punishing middle-class public servants for the sins of politicians,” according to the statement from the We Are One coalition.
So instead they want to punish private sector employed taxpayers with higher taxes and absolve themselves and their union bosses from all complicity in the union-politician cabal that created unsustainable benefits for government employees.
Comment by Cook County Commoner Thursday, Jul 26, 12 @ 12:09 pm
About the 3/5th vote to approve. I think it was said previously that they can vote to approve with a simple majority, it is just that the bill would not be able to take effect until July 1 2013.
Comment by Makandadawg Thursday, Jul 26, 12 @ 12:19 pm
But RNUG, wouldn’t you still be better off keeping the COLA and buying a short-term health insurance policy to cover you until ACA starts?
Comment by cassandra Thursday, Jul 26, 12 @ 12:19 pm
Anon @ 12:06,
You’re right. I was looking at one of the other versions and missed it in the one amendment
Comment by RNUG Thursday, Jul 26, 12 @ 12:20 pm
And yes, I’ll keep the COLA … and the insurance once the courts decide it is part of my deferred compensation.
Comment by RNUG Thursday, Jul 26, 12 @ 12:24 pm
You’ll have better luck trying to predict the U.S. Supreme Court than trying to predict what Speaker Madigan is going to do, let alone dissect his long term strategy.
Comment by Yellow Dog Democrat Thursday, Jul 26, 12 @ 12:50 pm
Cinci
Republicans will wear the collar for failure only if Cross can’t put up his half the votes. We know Poe, Brauer and Watson won’t vote to emasculate SERS.
Winsi
I bet Madigan puts half the required YES votes on it. Can Cross do likewise?
Comment by reformer Thursday, Jul 26, 12 @ 1:42 pm
Cassandra, There would be no short term budget savings because the state has skipped so many payments to the retirement system. This is only an attempt to keep the bills from growing.
Comment by Liberty_First Thursday, Jul 26, 12 @ 2:00 pm
I’m still not sure how giving two choices that are both unconstitutional make this constitutional. Is it like multiplying two negatives making it a positive? If I were to go in to rob a bank and I asked the teller if they wanted to be shot or pistol whipped, does the fact that I gave them a choice make it legal.
Comment by jericho Thursday, Jul 26, 12 @ 2:10 pm
CCC - “So instead they want to punish private sector employed taxpayers with higher taxes and absolve themselves and their union bosses from all complicity in the union-politician cabal that created unsustainable benefits for government employees.”
The assertion that benefits, rather than skipped contributions, now render the public pension system “unsustainable”, is patently false.
The high dollar folks who have conspiried with politicians for decades to keep tax exemptions on luxury services have benefited. Blaming some imaginary bogey man or rank and and file employees doesn’t even make sense.
Crony capitalists have been so accustomed to ripping-off private sector workers, simply asking them to pay back what they borrowed from their public employees is now viewed as “punishment”. -sheesh
Comment by Crime Fighter Thursday, Jul 26, 12 @ 2:12 pm
State and local government employees are taxpayers too. Don’t those private sector employees know that? Or do they think they all get to skip out on tax day?
Comment by geronimo Thursday, Jul 26, 12 @ 2:13 pm
This is playing out very very well and just exactly as our legislators would like it to go. Private fighting with public…………all the while deflecting the anger from them. They, who shamelessly stole funds from the pension coffers that would be absolutely FINE if they hadn’t diverted and outright stole from them. As long as they have us picking at each other, they remain in the background. The blame lies with our elected officials. Some say, well, that’s all done and we now have a financing problem. Numerous tax study organizations have pointed to our regressive tax structure, onestill in place that only a handful of states in the US still cling to. Of course, those who have more resources LIKE it that way. But cutting pensions, health care, cutting programs will not replace the missing money. No one is talking about more taxation. DIFFERENT taxing strategies are the answer, but no one wants to listen. They like all the disord amongst us. Keeps them safe.
Comment by geronimo Thursday, Jul 26, 12 @ 2:33 pm
I’am a Retired state worker. Now I have to choose Between WELFAR or Health care. WELFAR sounds better. That way I can set on my front porch. Drink Bud Beer and get good Health care nad get a good check to FOR FREE. Thanks TEAMSTERS and JILL TRACY FOR VOTING FOR THIS THE FIRST TIME. People like you with money don’t have nothing to worry about like we do
Comment by quincy Thursday, Jul 26, 12 @ 2:50 pm
quincy, if you’re going to post here about how you’re going on welfare, learn how to spell the word, especially since you’re capitalizing it.
Normally, I’d just delete you, but I think I’ll leave your comment up so everyone can see how weird your comment is.
Comment by Rich Miller Thursday, Jul 26, 12 @ 2:53 pm
http://preaprez.wordpress.com/
Please read Inbox.
And by the way, I thought Quincy’s comment was amusing. Lighten up!
Comment by geronimo Thursday, Jul 26, 12 @ 3:07 pm
Once again, the state wants to resolve the pension system, that they failed to fund, on the shoulders of state employees - who for years have paid their share into the pension fund for investing, only to have it raided so legislators could buy votes with pork projects. Didn’t Bernie Madoff go to prison for stealing from his investors?
Comment by Rusty618 Thursday, Jul 26, 12 @ 3:19 pm
Cinci: let me get this straight — if Madigan brings this difficult compromise to the floor, which hurts traditional Dem allies but helps the fiscal situation, and it fails to get enough votes because too many GOPers don’t support it, it is still Madigan’s fault?
It’s like Madigan saying “I am going to stab myself so I can show that some of my opponents forgot their first aid training”. A masterful plan!
Actually, my guess is he will be agreeing with the Gov that we need a more comprehensive plan, so as not to allow this half-step to become the last step.
Comment by walkinfool Thursday, Jul 26, 12 @ 3:23 pm
Speaker Madigan,
Avoid the blame of all this - let the unions see where the public stands - allow a vote on repealing the constitutional amendment that is causing so much angst. If the unions have so much support on this issue, let them prove it at the ballot box.
That threat should help nicely with negotations.
Comment by Downstate Thursday, Jul 26, 12 @ 3:26 pm
Sorry, about the spelling Rich. But, I’am just P O at tracy for her vote on this the first time. I don’t have the money she has. And now I may have to go out and get another job and tha will keep someone else from getting it. Again Sorry for the spelling
Comment by quincy Thursday, Jul 26, 12 @ 3:26 pm
@Downstate - Repealing the current Constitutional protection of the state employees would not help much. Repealing it would not retroactively undo it.
Comment by titan Thursday, Jul 26, 12 @ 3:46 pm
Rusty618
Yes he did. Why wasn’t he smart enough to blame all of his investors instead? It’s working for our legislators now, isn’t it?
Comment by geronimo Thursday, Jul 26, 12 @ 3:53 pm
===who for years have paid their share into the pension fund for investing, only to have it raided===
Your money went into the fund. The state’s share is what didn’t get invested.
Comment by Rich Miller Thursday, Jul 26, 12 @ 3:57 pm
“Normally, I’d just delete you, but I think I’ll leave your comment up so everyone can see how weird your comment is.”
Sorry, Rich. Not everyone can be an erudite, professional word smith as yourself.
Comment by Anonymous Thursday, Jul 26, 12 @ 4:00 pm
The state’s share is what didn’t get invested. Meaning the taxes that every working Illinois resident paid (yes, even public employees too). Why isn’t everybody raging mad at that? Not just public employees, who now are doubly screwed, as they paid a percentage of their own check into that fund, but ALSO their tax money—–but we’ve ALL been duped! Why is accountability not being demanded? The clowns just get a pass?
Comment by geronimo Thursday, Jul 26, 12 @ 4:03 pm
Rich, sorry to correct you, but some of the money that state employees (and teachers) paid into the pension system was removed to pay for other areas (projects). That has been proven.
Comment by Rusty618 Thursday, Jul 26, 12 @ 4:12 pm
To all those still advocating for state employees, while I appreciate your efforts to highlight the theft, the time for talking is pretty much over since democrats have decided that their state employee constituants are to be sacrificed. What I find funny is that the right-wingers here still are talking about the evil cabal of union/legislator lawmaking, with all the anti-union laws being passed. Kind of a bad way to treat the person you’re in bed with.
Anyway, the time for talking is about over. The only thing standing between us and the theft occurring now are the courts, so pass whatever laws you want, you thieves, and we’ll see ya in court.
Comment by PublicServant Thursday, Jul 26, 12 @ 4:31 pm
@Public Servant - == Kind of a bad way to treat the person you’re in bed with. ==
I saw a Chicago Reader recently. You wouldn’t believe the sort of bad ways big city Democratic folk treat each other in bed.
Comment by titan Thursday, Jul 26, 12 @ 4:43 pm
When Health Insurance rates change, every fund saves money; GRF cannot be credited with 100% of the savings. State contributions will decrease across the board, including those from federal and other state funds.
Comment by Scottish Thursday, Jul 26, 12 @ 5:10 pm
I was rather under the impression that the bulk of the unfunded liability problem was in the teacher’s portion of the pension fund. So how does this proposal help, other than to posture at the expense of the pensioners with the least political clout? Here we go with another half-way, poorly conceived solution based more on political expediency than any real desire to effectively govern this miserable state.
Comment by Skirmisher Thursday, Jul 26, 12 @ 5:20 pm
===So how does this proposal help===
There’s still a huge unfunded liability in the SERS.
Comment by Rich Miller Thursday, Jul 26, 12 @ 5:45 pm
Rusty618 is incorrect. Although contributions were reduced, skipped, and/or diverted by the State over the years, there were never any withdrawals or transfers out of pension fund assets to the State.
Comment by Arthur Andersen Thursday, Jul 26, 12 @ 5:55 pm
There are plenty of constitutional ways to address these pension problems. Increasing revenue should not be taken off the table. Neither should some sacrifice on the part of current recipients and active employees. Threatening current retirees with the loss of their increasingly expensive health care just when they need it the most is pretty unconscionable if not immoral. Taxing retirement income with an appropriate floor would be much more humane and constitutional. The cost shift is constitutional. Re-amortizing the Edgar ramp is constitutional. Extending sales taxes to services like they do in Wisconsin and Indiana would be constitutional. This phony choice thing probably is not. The Trib and their phony civic committees are more interested in hurting people than in solving the pension problems which they routinely exaggerate with the help of their Wall and LaSalle street cronies.
Comment by Bill Thursday, Jul 26, 12 @ 6:17 pm
Bill,
Very, very well said. As a retiree, I am very willing to pay additional money to help with the current situation - even though there would not be a current situation if the State had lived up to their legal obligation; but that can’t be fixed now. But for the State to threaten to take away the health insurance for me and my wife is unconscionable. I have been a $$$ donating Republican all of my life. If Cross continues to back this and to try to get a majority of Republicans to back it, it will be a cold day in hell before the Illinois Republican Party ever sees another dime out of me. They can KMA.
It’s going to be up to the courts. The courts will rule in favor of retirees. And both political parties in Illinois will have succeeded in peeving off a LARGE portion of a block of voters who always vote.
Comment by Jechislo Thursday, Jul 26, 12 @ 6:55 pm
@titan — i have no idea what you’re talking about, but I hear your barnyard mammals are quite fond of you.
Comment by PublicServant Thursday, Jul 26, 12 @ 7:09 pm
Bill, I must have missed your wonderful posts during the Blago era when you had the Bla-Go pom-poms in hand in which you cheered mightily for tax increases and expansions. I really wished I’d paid more attention then, because if that administration had paid more attention to this problem, gee, maybe we’d be about 6 years further down the road to solving it.
Shouldn’t you be in Colorado helping him fold laundry?
Comment by Michelle Flaherty Thursday, Jul 26, 12 @ 11:08 pm
Michelle,
You don’t have a very good memory, do you? That administration did pay attention and proposed many solutions most of which were ignored by your friends and the so-called democrats. Rod will do fine wherever he is. I wish I could say the same for the most vulnerable of our state’s citizens.
Comment by Bill Friday, Jul 27, 12 @ 6:29 am