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* Bloomberg…
Less than two weeks after Illinois lawmakers broke through decades of gridlock and passed a bill to bolster the worst-funded U.S. state pension system, taxpayers are already seeing the benefits.
The state sold $350 million of taxable general-obligation bonds yesterday to pay for work on roads, bridges, schools and public transportation. Debt due in December 2038 priced to yield 5.65 percent, data compiled by Bloomberg show. The 1.84 percentage points of extra yield above benchmark Treasuries was almost a third less than in a comparable sale in April, Bloomberg data show.
The 29 percent reduction from eight months ago saves more than $20 million over the life of the securities, according to Abdon Pallasch, assistant budget director for Illinois, which has the lowest credit grade among states. Standard & Poor’s signaled this week that the accord on retirement costs could trigger a ratings increase.
“The market recognizes that this is a clear improvement and that the credit risk of the state is diminished as a result of this pension action,” said Chris Mier, chief municipal strategist at Loop Capital Markets in Chicago.
That’s kind of a bit of fun with numbers. If the biz powers that be hadn’t opposed Senate President Cullerton’s “A-B” plan over a year ago, we’d be much further along with this process by now.
* Umm…
But the Democratic governor’s glee over the savings was tempered by Republican Treasurer Dan Rutherford, who estimated the state could have saved $70 million more if its credit rating was top-notch and not the worst in the nation.
“We are several tens of millions of dollars worse because we’re not triple-A,” said Rutherford, who is running for governor in the March GOP primary.
I tend to side with Rutherford on the bill’s constitutional questions. However, left up to Rutherford, that bill would not have been signed into law. I don’t know how he intends to get us to AAA ratings with New York by refusing to play New York’s game. And pension reform was definitely a NY game.
* From a Sen. Bill Brady press release…
(A)ccording to State Senator Bill Brady (R-Bloomington) the interest rates Illinois got are proof that passing pension reform, while the tough choice, was the right choice.
“Voting for pension reform last week was by no means an easy vote, but today’s bond rates are proof that we made the right decision,” said Brady. “With this latest bond sale our penalty decreased by 29%. That’s huge improvement and good news for Illinois.”
* More from the Trib…
“This is a tangible, positive development — a positive dividend of (pension) reform for taxpayers,” said Matt Fabian, managing director of Connecticut-based Municipal Market Advisors. “It’s hard to see this as anything else.”
* Meanwhile, the Illinois Policy Institute’s Scott Reeder threw the kitchen sink at the pension reform law in his most recent syndicated column…
After all, is freedom really worth dying for?
Yes, it is.
The men who charged the beaches of Normandy knew that all too well. So did those who gave their lives at Hue and Iwo Jima.
Imagine where we would be today if George Washington had chosen to compromise rather than fight. British tyranny would have prevailed and the greatest nation on earth would never have been born.
Dr. Martin Luther King Jr. recognized the temptation to compromise and addressed it in his great “I Have a Dream” speech:
“We have also come to this hallowed spot to remind America of the fierce urgency of now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice.”
Dr. King knew some things just were non-negotiable.
Nowhere in that speech will one find the soothing balm of compromise.
Those who are regular readers of this column know that I don’t often take a middle ground.
As they say in Texas, “The middle of the road is a fine place to be – if you’re a dead armadillo.”
Some things in life are non-negotiable.
In a recent column, I was blunt in explaining why the recent pension compromise was bad for our state and will do little to resolve the Land of Lincoln’s ongoing fiscal ailments.
I wish I was wrong.
But I cannot remain silent on a matter that imperils the future of this great state.
posted by Rich Miller
Friday, Dec 13, 13 @ 10:52 am
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As a taxpayer, I’m glad the bond sale went well. The State better hurry up and, right now, sell whatever bonds they need to sell over the next several years because it will be a different story after the courts start to weigh in.
Comment by RNUG Friday, Dec 13, 13 @ 11:05 am
Dear Scott Reeder:
The word “compromise” can be used in another context…as in being compromised by a conflict of interest. Like a self described “journalist” having his salary indirectly paid by a candidate for governor parroting that candidate’s talking points in a newspaper column — all while claiming to be independent.
Can you think of anyone who has compromised in such a fashion?
Comment by Richard Friday, Dec 13, 13 @ 11:07 am
Scott Reeder wants to wage an actual war over pension debt? Wow. These people are dead serious in their hatred of unions and compromise.
Reeder has the audacity to cite MLK, who died right after supporting striking AFSCME members.
Guess what, Reeder, even Republicans have began slapping you people around now. I say “slapping you around” because I’m using your lingo. John Boehner lashed out at the super-wealthy think tanks, who would truly destroy this country through defaulting on debt and shutting down the government. They also wouldn’t compromise, and now even friendly politicians are getting fed up. Look at the latest budget deal in the U.S. House. It passed with solid bipartisan support.
You want to see a traitor you can fight, Reeder? Look in the mirror.
Comment by Grandson of Man Friday, Dec 13, 13 @ 11:11 am
Dear Mr. Reeder,
Our soldiers who fought at Normandy and Iwo Jima also fought to preserve such things as federal and state constitutions, and rights under contract law.
A dictator could have solved the pension issues in a day. But in a democracy, such things as Constitutions and contract law prevail. At least one hopes they would.
Comment by Joe M. Friday, Dec 13, 13 @ 11:12 am
Comparing the pension deal to WWII or the civil rights struggle makes it difficult to take Mr. Reeder seriously.
Comment by Snucka Friday, Dec 13, 13 @ 11:15 am
Dear Reeder: compromise is what has made this nation so great, and will continue to do so. Compromise protects the minority from the majority. Actually, compromise is what has made my marriage last so long; and that is definately a positive.
Comment by Jim'e' Friday, Dec 13, 13 @ 11:15 am
There are compromisers in government who get things done for the people, and those who refuse to compromise, and thereby bring all progress on any issue to a halt.
It’s clear as a bell where Illinois policy Institute stands.
Comment by walkinfool Friday, Dec 13, 13 @ 11:17 am
Funny thing about Texas Hold ‘em is that there’s no rule that says you have to sit at the table and play to begin with. Important decisions that affect so many people’s lives shouldn’t come down to a “stand off”. Being bold means creating and following good policy decisions from the beginning. There’s a bit of a new start to build off of here that doesn’t need to lead to either/or solutions.
Comment by A guy... Friday, Dec 13, 13 @ 11:22 am
After all, has Scott Reeder really jumped the shark?
Yes, he has.
Comment by 47th Ward Friday, Dec 13, 13 @ 11:22 am
Scott Reader hasn’t seen the ball since the kickoff. What makes Reader think he is smarter than the bond houses that just lowered Illinois rate of borrowing. Please.
Comment by dogboy Friday, Dec 13, 13 @ 11:25 am
Scott - Really? - Quote mining is a lazy and ineffectual way to make an argument. You’ve really sunken to a new low. (And that’s against a strong field).
Comment by veritas Friday, Dec 13, 13 @ 11:28 am
I would assume Scott Reeder would know a lot about compromise. That’s what he did with whatever integrity he had when he signed up with the Illinois Policy Institute.
Comment by Michelle Flaherty Friday, Dec 13, 13 @ 11:28 am
I thought Reeder’s article was interesting until I went back and read his other pieces. Now I realize that he’s just misinformed or wearing blinders.
You can’t compare all public pension plans with a private pension plan. For many pensioners there is no social security — that’s all you get. There’s also no PBGC for public pensions. And I could go on and on.
Comment by Stuff happens Friday, Dec 13, 13 @ 11:29 am
What in the world is wrong with Scott Reeder?
He didn’t feel a tiny bit of shame comparing his “fight” to the burdens of American revolutionaries, WWII GIs and Dr. King?
Is that a gag? Did someone hack him and put that out in his name? If not, he’s a navel-gazing lunatic.
Don’t worry, Scott, I don’t think you’ll have to risk your life “fighting” for your beliefs on pensions.
But it sure is fun pretending, isn’t it?
Stomach-turning, megalomaniacal b-s. Some of the worst I’ve ever seen.
Comment by wordslinger Friday, Dec 13, 13 @ 11:31 am
Nearly speechless here over Reeder’s comments.
There are many combat veterans of both genders employed by the state as well as retirees. We didn’t pay the ultimate price as many of our brothers and sisters did, but we do understand what being in the frontline for freedom means.
As a combat veteran and state retiree, I find his comparisons to be extremely insulting.
Comment by redleg Friday, Dec 13, 13 @ 11:31 am
Scott Reeder would have made a great mine detector on Omaha Beach on June 6, 1944.
Comment by John on the spot Friday, Dec 13, 13 @ 11:32 am
Back on Planet Earth after a nasty trip into the mind of Scott Reeder, the Illinois bond sale is a sweet deal.
Take some of that year-end stock market profit and roll it into undervalued securities.
Comment by wordslinger Friday, Dec 13, 13 @ 11:35 am
“after a nasty trip into the mind of Scott Reeder”
Word -
Well done!
After reading the full article with Rich’s link, my only regret is the little bit of peace that was stolen.
Comment by redleg Friday, Dec 13, 13 @ 11:39 am
This is the same guy who uses his kids in his column to help push the IPI agenda. He sold out long before he left the Small newspaper group. He courted the big corporate cash and now he’s laughing all the way to the bank. The only amazing thing is these newspapers who help sell his spin for free.
Comment by in residence Friday, Dec 13, 13 @ 11:40 am
“I knew Hue, and that pension bill is not Hue.”
How’s that for a quote, Scott?
Some things are indeed worth fighting to the death for, but IPI knows none of them.
Comment by walkinfool Friday, Dec 13, 13 @ 11:41 am
In this edition of Tea Party Mad libs Reeder chose for war imagery: World War II; famous forefather: George Washington; misrepresented quote: Martin Luther King; and the folksy quote: something from Texas.
Well done, see ya next week!
Comment by Sun Friday, Dec 13, 13 @ 11:42 am
Bite me Reeder. My dad and father in law both fought overseas in WWII and that experience took its toll. Besides your other areas of obvious ignorance, you have no clue how real people think or feel. My disgust grows
Comment by Former Merit Comp Slave Friday, Dec 13, 13 @ 11:45 am
Reading this diatribe from Reeder, I couldn’t help but think of one of Willy’s favorite sayings:
This guy is a DOPE!
Comment by Norseman Friday, Dec 13, 13 @ 11:53 am
Scott Reeder is part of a battalion of right wing writers known as the Keyboard Kommandos. They are fierce in their bravery while they peck away in the glow of screens - lionizing those like redleg who actually did put it all on the line in the hopes that reflected glory will accrue to their intellectually shameful arguments and purple prose. Pass the ammunition? Nay, brother, pass another bag of Cheetos and the Mr. Pibb, for the dark lords Pelosi and Reid ride in force tonight.
Comment by Willie Stark Friday, Dec 13, 13 @ 11:53 am
Reminds me of Bluto Blutarsky’s “Germans Bombed Pearl Harbor” speech in Animal House. What a clown.
Comment by Ray del Camino Friday, Dec 13, 13 @ 11:54 am
Scotty, I hardly knew ye. Hope that IPI payday makes up for the sale of your integrity.
That bond sale had to be waay oversold at those rates. Good for investors and good for the State.
(Rauner Family Holiday Gift Exchange: “Kids, I didn’t know what to get you this year so I bought you each a $10 million Illinois Bond, or as I call it, a down payment.” “Oh, Dad, you shouldn’t have. But isn’t the State going broke?” “Not after I shake up Springfield! Come on everyone, Hammer and Shake! Hammer and Shake!” “Mom! We told you to keep him out of the Adult Egg Nog!” “Sorry, kids. And this is a much better gift than when he bought you that glass company in Freeport and awful people kept sending us hate mail.”
Comment by Arthur Andersen Friday, Dec 13, 13 @ 11:57 am
Thank you, Reeder, for today’s moment of surrealism.
Comment by PolPal56 Friday, Dec 13, 13 @ 12:18 pm
WOW!! Has Scott Reeder gone off the deep end?
I was speechless trying to read this. And they pay him to write this dribble?
Comment by Ready To Get Out (soon) Friday, Dec 13, 13 @ 12:21 pm
The pension reform bill not going far enough = fascism and segregation? Okkkkkkk.
And this is why discourse in our great state and country are at an all time rock bottom. Move on.
Comment by Boone's is Back Friday, Dec 13, 13 @ 12:23 pm
If anything, this shows how small an issue bond ratings are. We cut, what, $160B from pensioners to save $20M on a bond deal? At 0.0125% of the pension reform savings, that just shows that pension reform was more about freeing up money for future spending than it was about saving money on bonds.
Comment by thechampaignlife Friday, Dec 13, 13 @ 12:25 pm
I’m sure Reeder would want to steal the pensions of the soldiers who charged the beaches at Normandy.
Comment by wtf Friday, Dec 13, 13 @ 12:51 pm
Mr. Miller-
Somehow, you left this out of your quote from Bloomberg: “The extra yield investors demanded on general obligations due in 10 years instead of AAA munis fell to 1.58 percentage points on Dec. 11, the lowest since August.”
So, we’re back to where we were in August. Whoopee.
Thanks t,o things like this, your last poll on the Guv race and your coverage of Rauner, your reputation for objectivity is now exactly zero.
Comment by Mark Glennon Friday, Dec 13, 13 @ 1:12 pm
“I wish I was wrong.”
Oh, there’s no wishing about it.
Comment by Michelle Flaherty Friday, Dec 13, 13 @ 1:14 pm
An improvement, but still shows how much more we need to do. An almost 2% penalty or over 40% greater than other States is unsustainable in the long run. Let’s hope our legislators don’t just pat themselves on the back and ignore the great work we still have to do to bring our fiscal house in order.
Comment by Anonymous Friday, Dec 13, 13 @ 1:30 pm
===Somehow, you left this out of your quote from Bloomberg===
Actually, I mentioned it myself.
Comment by Rich Miller Friday, Dec 13, 13 @ 1:37 pm
As for the rest of your ill-informed comment, bite me.
Comment by Rich Miller Friday, Dec 13, 13 @ 1:38 pm
–Mr. Miller-
Somehow, you left this out of your quote from Bloomberg: “The extra yield investors demanded on general obligations due in 10 years instead of AAA munis fell to 1.58 percentage points on Dec. 11, the lowest since August.”–
LOL, or crying out loud, dude, it’s in the first paragraph!
You need somebody more reliable to do your reading for you.
Here’s a question: In conversation, do you listen, or do you wait to talk?
I think I know. Can you dig it? I knew that you could.
Comment by wordslinger Friday, Dec 13, 13 @ 2:09 pm
See how easy it is for the rich and powerful to manipulate bond prices and interest rates. Then they say” Look what good has been done!” How dumb do they think we are? How much were the last two issues oversubscribed? We’ve got to get that money for the Capital Budget. No new contracts, no new donations!
Comment by vttk17a1 Friday, Dec 13, 13 @ 2:33 pm
Upgrade for now.
Downgrade when the bill is found unconstitutional.
That’s going to be a painful bounce in bond rates.
Comment by Formerly Known As... Friday, Dec 13, 13 @ 2:37 pm
A sure tonic for one’s mental health is to avoid reading right-wing journalists, bloggers and other opinionaters. What’s the point of ridiculing, refuting or even acknowledging their drivel?
Apparently this Reeder guy used to have some legitimacy, but the consensus is that he sold that off a while back. So stop reading anything he has to say and you’ll feel 25 percent better in no time.
Use the same prescription for the other 99,000 of them out there and you’ll be fit as a fiddle.
Comment by DuPage Dave Friday, Dec 13, 13 @ 3:48 pm