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Pension reform session date eyed

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Illinois

* I told subscribers about this yesterday afternoon…

A top aide to House Speaker Michael Madigan told Illinois lawmakers Wednesday to be ready for a special session in Springfield in December, emailing them shortly after legislative leaders met to discuss solutions to the state’s $100 billion pension crisis.

Madigan Chief of Staff Tim Mapes told Democrats in the email to reserve time for a “possible” session beginning Dec. 3. He also asked them to “keep other days that week available.” Senate President John Cullerton later sent an email to Senate Democrats, asking them to keep Dec. 3-4 open.

Voting on a pension plan isn’t specifically mentioned in either email, but Madigan spokesman Steve Brown told The Associated Press that pensions were “the likely reason” that the legislature would return. […]

Dec. 3 is the day after the deadline for candidates to file paperwork for the 2014 campaign, including anyone challenging incumbents. The timing is important because scheduling a vote on a divisive issue such as pension reform after the filing deadline would remove the threat for some lawmakers of a primary challenge based on their decision.

* Finke…

House Republicans also received the email.

A spokeswoman for Senate Minority Leader Christine Radogno, R-Lemont, said the leaders are still waiting for actuaries to verify what the potential savings could be from various reform proposals, a practice referred to as “scoring.”

“The numbers are what determine whether these concepts work,” said Patty Schuh. “We are still awaiting numbers.”

“The leaders continue to make progress,” said Vicki Crawford, spokeswoman for House Republican Leader Jim Durkin of Western Springs. “They are still waiting on scoring from the systems. We are simply telling members to be prepared for a possible return to Springfield.”

* McKinney…

The date that the leaders are zeroing in on is significant on the political calendar. Candidates seeking a spot on the 2014 primary ballot have to file their nominating petitions with the state by Dec. 2.

While there is no deal yet on pensions, incumbents in both parties would be spared the possibility of labor-driven primary challenges if they are asked to vote on pension-reform legislation after the nominating petition filing deadline. […]

Durkin spokeswoman Vicki Crawford said there is no consensus yet, but the aim is to strike a deal by the end of the year.

“They’re making progress. We’re still waiting for numbers,” she said. “No deal yet.”

The leaders have been meeting since the first week of veto session and they’re making progress. This vote is fast becoming a reality.

posted by Rich Miller
Thursday, Nov 14, 13 @ 10:24 am

Comments

Given that most of the proposals we have seen so far are very probably unconstitutional, I hope somebody is also preparing to request a stay until a court challenge is decided. Otherwise retirees will shortly have to adjust their next year’s budgets to account for a cola reduction possibly starting in January. The upper income tier won’t feel it much, but most government retirees are far from the upper income tier. They are part of the country’s shrinking middle class.

Who would have thought the Democrats would take up middle class bashing. Only in Illinois, I guess.

Comment by Cassandra Thursday, Nov 14, 13 @ 10:41 am
Many legislators in both parties have sought union backing over the years. Those legislators filled out questionaires pledging to protect pensions and to oppose attempts to emasculate earned benefits. We’ll soon find out how many stick to their word.

Comment by reformer Thursday, Nov 14, 13 @ 11:04 am
Scheduling the special session after the primary filing date is predictable, but disappointing. Profiles in cowardice …

Comment by Sir Reel Thursday, Nov 14, 13 @ 11:06 am
=== Who would have thought the Democrats would take up middle class bashing===

I thought it particularly ironic when Quinn said he wouldn’t sign any tax breaks for ADM unless the GA passed pension reform. In other words, “I’m not going to give more tax breaks to wealthy, highly profitable corporations unless you stick it to those middle class moochers first.”

Very Democratic.

Comment by TwoFeetThick Thursday, Nov 14, 13 @ 11:10 am
The timing doesn’t just protect legislators from being primaried - doesn’t it also protect Quinn? Is it at all possible that someone at this late date could mount a serious primary challenge to Quinn based on the pension deal outcome?

Comment by dupage dan Thursday, Nov 14, 13 @ 11:20 am
- Is it at all possible -

No.

Comment by Small Town Liberal Thursday, Nov 14, 13 @ 11:22 am
Any money on how Dillpickel and Tracy will vote. We middle class retirees are going down. But, Yet today I got a letter asking for money for both of them for gov/ ltgov. Are they blind in one eye and can’t see out of the other. These two are a joke in the making. Go Big Bill

Comment by Quincy Thursday, Nov 14, 13 @ 11:24 am
Now would be the time for a moderate Republican to get the support of teachers/public workers. The Dems have abandoned them and people such as Rauner and Brady have them firmly in their cross hairs.

Comment by ash Thursday, Nov 14, 13 @ 11:43 am
The unions are gearing up for the filing of a lawsuit. Plaintiffs are already with the union lawyers. Now we wait and see for the bill and the gov signing it into law.

Comment by Nearly Normal Thursday, Nov 14, 13 @ 11:46 am
Could it also be that they are trying to beat the Maag ruling? No matter how the ISC rules, it seems like a complication. Upholding the law may embolden some to seek much deeper pension cuts, which would ultimately hurt the Democrats. Rejecting the health benefits reductions and stating that such matters must be negotiated would throw a wrench into any of the pension reduction plans under consideration.

Comment by east central Thursday, Nov 14, 13 @ 11:59 am
The public service union leadership has made some very strategic errors in judgment from Jump St. on pension reform. Retirees ought to be upset with the current rank and file who’ve never worried about protecting the current retirees, but just their own demands. The “no compromise” strategy just isn’t playing in the public square. I have sympathy for retirees, but the rank and file active workers should know better. This thing is going to be more drastic because of all of the delay. It didn’t have to be this way. Those unions need new leadership.

Comment by A guy... Thursday, Nov 14, 13 @ 12:05 pm
A Guy

I am really unclear exactly what you are accusing the union of doing. Any changes in the pension effect all of us, retired or future retirees.

“The public service union leadership has made some very strategic errors in judgment from Jump St. on pension reform. Retirees ought to be upset with the current rank and file who’ve never worried about protecting the current retirees, but just their own demands. The “no compromise” strategy just isn’t playing in the public square. I have sympathy for retirees, but the rank and file active workers should know better. This thing is going to be more drastic because of all of the delay. It didn’t have to be this way. Those unions need new leadership.”

Comment by AFSCME Steward Thursday, Nov 14, 13 @ 12:25 pm
My guess, if the GA does manage to pass pension “reform”, is it won’t get enough votes to be effective immediately. If it was to have an effective date of 7/1/14, that would have several strategic political advantages.

1) With a 7/1/14 effective date, no “harm” would occur to retirees until either that date or 1/1/15 when the AAI is skipped / reduced … so there would be no basis for claiming filing a law suit. With a law suit not filed until 7/1/14 or later, there is no way it would be resolved before the general election … and the whole goal of this exercise is to make it past the general election without voting for a tax increase.

2)Knowing it would be effective 7/1/14 would be good enough for Quinn to craft a FY15 budget incorporating the “savings” and to claim the tax increase could sunset. Once again, this is all about getting past the general election without having to take a hard vote to raise taxes.

I’ll tell you right now that Quinn’s FY15 budget will say the tax increase can sunset because of the pension “savings” and because of some across the board budget “cuts” … until it all falls apart 1/1/15 when he’ll have to tell the truth and ask for the needed tax increase.

Comment by RNUG Thursday, Nov 14, 13 @ 12:29 pm
If this “reform” is deemed unconstitutional, are there any other suggestions to help mitigate the problem? Does the State reduce the number of employees, reduce payments to Cities, Townships and Counties even more than they have? Either have to find additional income or reduce expenses and I think it will be hard enough to keep the income tax at 5% let alone raise taxes any higher.

Comment by Bourbonrich Thursday, Nov 14, 13 @ 12:52 pm
AFSME Steward, with sincere respect, your question is better put to a retired member of the teacher’s union. They’re a very upset bunch I meet in every canvassing effort. I’m not avoiding your question, I just believe you need to hear directly from this group just how upset they are with current teachers in the union and their leadership.

Comment by A guy... Thursday, Nov 14, 13 @ 1:02 pm
But how many savings can the Quinn admin claim (with a straight face) from pension “reform” next fy. Nowhere near the $7 billion the income tax increase brings in. Maybe they think nobody out here in the citizenry can count. But pension “reform” in any guise so far is not going to cover that $7 billion plus (with improved economy) annually.

Comment by Cassandra Thursday, Nov 14, 13 @ 1:10 pm
Bourbonrich @ 12:52 pm:

If you haven’t done so, spend some time on the CTBA web site reading their spending and budget analyses. They lay out a detailed picture of where the money comes from and where it goes. You might want to start with their “Flawed Tax Policy” or “Case for Graduated Tax” reports. Make no mistake, CTBA has their agenda (more revenue via a progressive income tax replacing the flat income tax), but they do good job breaking down the budget numbers.

When you are done with all the reading, I suspect you will reach the same conclusions they did. There isn’t that much left to cut, there is a structural deficit based on the way revenue is collected in Illinois, pension “reform” isn’t going to solve the problem (at best it is a 1 - 3 year patch), stealing from revenue sharing, etc. is again only a short term patch, and the only real solution is complete overhaul of revenue generation in Illinois.

If you reach that conclusion, the only discussion points are exactly where and how to generate the needed additional revenue and they have their proposals. Also, lots of proposals have been floated the last year or two on this blog.

All this pension “reform” stuff is just the opening act in an attempt to get someone else to be blamed for the budget problem.

Comment by RNUG Thursday, Nov 14, 13 @ 1:20 pm
Cassandra @ 1:10 pm:

Actually, since part of the tax increase was permanent, the gap that needs to be filled is more like $5.4B. Claim about $3B in pension “reform”, claim about $3B in “savings” from 10% across the board budget cuts, toss in another optimistic $1B in extra tax revenue from an improving economy next year, and presto … you have filled the hole AND have $1.6B you can spend on new programs to buy votes for the 2014 general election.

And, like I keep saying, it will all fall apart after the election.

Comment by RNUG Thursday, Nov 14, 13 @ 1:28 pm
I’ve been reading that they are looking for $130 billion in savings yet the system has a $100 billion liability. Why are they trying to over fund the system? Usually you shoot toward an 85% funded system as those funds will never be collected at the same time.

Comment by Bulldog7 Thursday, Nov 14, 13 @ 2:15 pm
It looks like this year’s legislative Christmas or other holiday gift to public workers and retirees will be pension reduction. A gift that will keep on taking if not stopped by the SC.

Comment by Norseman Thursday, Nov 14, 13 @ 2:16 pm
=== Why are they trying to over fund the system? ===

You’re looking at two different things. Total payments will be something like half a trillion. The savings are off that, not the unfunded liability.

Comment by Rich Miller Thursday, Nov 14, 13 @ 2:18 pm
The public may well be able to swallow the continuation of the income tax they’re already paying if they see Pension Reform. I think Quinn and Madigan are counting on a few slightly bold and very safe Republicans to join that vote. The truth is; most Illinoisans don’t believe for a second that it’s temporary anyway. If they have to keep paying, but get no pension reform, they will go nuts. Quid pro quo on the continued tax for a $100B+ solution to Pension Reform would probably be palatable. Yep, a GOPer just said that.

Comment by A guy... Thursday, Nov 14, 13 @ 2:55 pm
Norseman,

If that happens, maybe all us retirees can come up with an appropriate gift for them …

I’d suggest that as a QOTD except Rich would have to spend the entire day censoring the comments.

Comment by RNUG Thursday, Nov 14, 13 @ 3:00 pm
A guy… @ 2:55 pm:

That might be palatable … but it’s nothing more than a short-term budget fix. We’ll be right back here in 2 or 3 years with the same fundamental spending / revenue mis-match and the same $10B in unpaid general obligations that gets pushed from FY to FY.

Comment by RNUG Thursday, Nov 14, 13 @ 3:07 pm
Heard from more than a few house members last week that signature gathering was more difficult than ever. Lots of slammed doors. The public is really starting to hate the GA the way they hate Congress. I think more and more members are sick of the pension debate and want it to end.

Comment by Tony Thursday, Nov 14, 13 @ 3:10 pm
Might be because the longer the pension “reform” attempt gets drawn out, the more the public learns the main cause of the problem is/was the GA’s failure to properly fund the pensions.

Comment by RNUG Thursday, Nov 14, 13 @ 3:22 pm
“RNUG” and “A GuY….”

Very good analysis. I think the players in this show have finally tipped their hand as to their plan and strategy.

Will be interesting….

Comment by skeptical spectacle Thursday, Nov 14, 13 @ 4:02 pm
GA is in a tough spot….the PACs are watching this like a hawk.

Comment by OLD BRASS Thursday, Nov 14, 13 @ 4:08 pm
I’ve been reading that they are looking for $130 billion in savings yet the system has a $100 billion liability.

No you have it right this is really about continuing to rob the employees of their pensions so they can spend the money on the general budget spending. Even SB2404’s savings doesn’t go back to pay the debt %70 of it is just not spent on the pension debt. Take $130 billion or $200 billion same thing they will just spend it somewhere else.

Comment by pension truth Thursday, Nov 14, 13 @ 4:13 pm
A Guy 12:05, I don’t go along with your characterization of the unions as taking a “no compromise” position.

The unions did negotiate with Cullerton on SB 2404. That bill passed the Senate and would have probably passed the House if Madigan had allowed a vote on it.

Under contract law, if one party wants to change the terms of a contract they have to negotiate with the other party. Other than Cullerton’s SB 2204, there has been no attempt of the General Assembly or the Governor to negotiate with the teachers, state and state university employees or those groups retirees. So far the General Assembly has spent most of their time negotiating with themselves.

They really need to start negotiating with the employees and retirees, instead of giving the unions and retirees “take it or leave it” legislation that will force the unions and retirees to go to court.

Comment by Anonymous Thursday, Nov 14, 13 @ 4:15 pm
pension truth, your handle is not consistent with your comment. Rich explained the “truth.” Don’t restate wingnut points and confuse people who come here looking for legit information.
RNUG, I agree with your analysis of the “pension reform”
endgame and how it fits into the tax repeal. I just don’t know if they can come up with a plan that “saves” $3 billion in the first year without some serious actuarial mumbo-jumbo. Maybe Filan will get called back in as a consultant.

Comment by Arthur Andersen Thursday, Nov 14, 13 @ 4:48 pm
The tax increase is here to stay, I have no hope for pension reform. Maybe next year.

Comment by Anonymous Thursday, Nov 14, 13 @ 4:53 pm
Anon, the union spokesmen/leaders have been doing their bidding in the press from the start. The Cullerton bill is a non-starter. He knew it, everyone who voted for it in the Senate knew it. Most of all MJM knew it and made sure his caucus members and supporters of SB 10 knew it. The union leaders only blessed that plan after seeing the other one. They put all their muscle behind it and it didn’t. budge. an. inch. It we are to maintain defined benefits pensions (I don’t think we should), there’s a number of places where the money has to come from. Everyone’s gonna have to feel an equal amount of pain. I’ve seen many on this blog state that Illinois taxpayers have it easy, we’ve been under taxed, everything pointing to simply telling the taxpayers to pay more. They’re saying “no”. outside of the public sector has been a difficult place since 2008. There’s no sympathy (and there should be some, especially for some retired teachers who made 7K a year when they started). Pass a bill and go to court if that’s what’s meant to be. We’ll see what happens. If the system goes bust, that copy of the Constitution isn’t going to feed our house anyone. There’s a fix if realistic people help it occur.

Comment by A guy... Thursday, Nov 14, 13 @ 4:55 pm
“a guy…”

Your words echo emerging trends in the public at large.

Comment by skeptical spectacle Thursday, Nov 14, 13 @ 5:11 pm
skeptical spectacle — It is no accident that the public is not supporting public workers. There is a well-funded nationwide campaign to turn them against us. It is not just the so-called Civic Committee in Chicago. This is going on in many other locations, all aimed at busting public unions and destroying pension systems. And after they have turned all of us into 401K plans with huge profits for Wall Street, then they will be going gangbusters after Social Security.

Comment by kimocat Thursday, Nov 14, 13 @ 5:45 pm
RNUG
I think you are pretty much right on with your analysis. However, your timeline is off just a bit. Retirees and current employees would not have to wait for a missed or diminished cost of living increase to bring suit. In fact the diminishment would begin the day the law becomes effective since it presumably impacts the accrual of benefits as well as cost of living. We’ll probably get a good idea of where this is going when the Maag suit ruling is announced, probably February. Any bets?

Comment by Old and in the Way Thursday, Nov 14, 13 @ 5:49 pm
Oh I don’t want anyone to turn against anyone. I think the concept of “shared pain” is the perspective with which to view this mathematical problem we have here in Illinois.

Everyone is going to have to get a little less than they expected and give a little more to get out of this mess.

I think the idea of unfairly excepting certain portions of the population to these efforts (pension reform, revenue increases, cost cuts) is what must be avoided.

This will be much more difficult than it sounds and will require courageous leadership.

Comment by skeptical spectacle Thursday, Nov 14, 13 @ 6:08 pm
And as always, RNUG is always somewhere close to the truth.

Comment by skeptical spectacle Thursday, Nov 14, 13 @ 6:09 pm
In a mailing from AFSCME today
“Nobody knows yet what this new agreement is, but rumor has it that the final bill will be very close to SB 1, the plan backed by House Speaker Michael Madigan that would slash your pension benefits by more than 30%.
Now it looks like all four legislative leaders are prepared to put the squeeze on rank-and-file legislators who’ve stood with public employees and retirees in the past. It’s going to be critically important that your legislators hear from you—and that they know how strongly you oppose any bill that makes drastic cuts to your pension benefits.

Comment by second street Thursday, Nov 14, 13 @ 6:17 pm
a guy

You suggest there will be some GOP votes for an income tax extension. I’d be surprised, since opposition to the temporary income tax hike unites the Republicans more than opposition to same sex marriage. I could see it happening only if a Republican governor asked for their support.

Comment by reformer Thursday, Nov 14, 13 @ 7:30 pm
==Everyone is going to have to get a little less than they expected and give a little more to get out of this mess.

I think the idea of unfairly excepting certain portions of the population to these efforts (pension reform, revenue increases, cost cuts) is what must be avoided. ==

Since state employees are also taxpayers, raising taxes to pay the pension debt is sharing the pain. If you really think that sharing the pain must include welshing on pension obligations, why doesn’t it include welshing on bond indebtedness and obligations to pay vendors?

Comment by Anon. Thursday, Nov 14, 13 @ 7:52 pm
The great pension fund hoax.
http://www.knowthelies.com/node/6921

Comment by fastcat Thursday, Nov 14, 13 @ 8:03 pm
Arthur Andersen @ 4:48 pm:

If you toss out my (partially tongue in cheek) suggestion of $1.6B in new spending to buy votes, then instead of $3B you only have to come up with around $1.4B in pension savings the first year. Should be able to claim that just as easily as the $1B claimed in revenue growth.

Comment by RNUG Thursday, Nov 14, 13 @ 9:17 pm
This may also just turn into an oppertunity for each legislator to cast a vote they want to run on in the election. Yes, I do beleive the leaders are truly trying to come up with a deal, but not sure of the goals for that deal. I guess they would like it to pass if they have the votes but may just be another political road they follow as they solve a legal and ethical issue within their political framework.

Comment by facts are stubborn things Friday, Nov 15, 13 @ 7:37 am
From the Chicago Tribune 10/21/13:

Illinois Senate President John Cullerton said Sunday that the state’s massive public employee pension debt is not a “crisis,” but instead an issue being pushed by business-backed groups seeking lower income taxes at the expense of retiree benefits.
“People really misunderstand the nature of this whole problem. Quite frankly, I don’t think you can use the word ‘crisis’ to describe it at the state level,” Cullerton said in an interview on WGN-AM radio.

Comment by Iearnedit Friday, Nov 15, 13 @ 9:34 am
@Iearnedit - Friday, Nov 15, 13 @ 9:34 am

= I don’t think you can use the word ‘crisis’ to describe it at the state level,” Cullerton said in an interview on WGN-AM radio. =

I wonder if that statement will be in the Union’s legal brief’s before the IL SC??

Comment by facts are stubborn things Friday, Nov 15, 13 @ 11:01 am
Probably be right next to a copy of the State’s testimony in the ‘Maag’ appeal describing the pension protection clause …

Comment by RNUG Friday, Nov 15, 13 @ 12:28 pm