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* AP…
Rauner said Illinois could save more than $2 billion by moving all state workers to a less-generous pension system lawmakers approved in 2010 for employees hired after Jan. 1, 2011. Workers also would have the option of moving to a 401(k)-style plan. He said firefighters and police would be able to keep their current benefits.
Projected savings from any pension changes aren’t likely to be realized in the next fiscal year, however. Even if Rauner could get a bill through the legislature, the state’s powerful labor unions — with whom Rauner has clashed repeatedly since taking office — would challenge it in court.
Those unions and retirees already have sued over a 2013 pension overhaul that cut benefits. A lower court found the measure unconstitutional, and the Illinois Supreme Court is considering the case.
* Sen. Daniel Biss, who helped craft the current pension reform law, agreed via press release yesterday…
“It is completely irresponsible to claim to balance a budget through pension reforms that would surely be litigated. An inevitable lawsuit will leave the state in financial limbo while the proposal meanders its way through the judicial system, and banking the savings of such a plan during that process puts us at risk of further damaging the fiscal condition of the pension systems.”
* And so did Senate President John Cullerton…
Governor Rauner leaves a $2.2 billion hole in the budget by relying on unrealistic revenues from a questionable pension proposal. Even as the courts review a significant test case, the governor’s plan banks phantom savings for a pension plan that may fail key legislative and judicial tests. When we passed pension reform last year, we took care to exclude possible savings from budget plans pending a legal resolution. The governor’s plan rejects that wisdom.
* Speaker Madigan piled on…
Madigan said the governor shouldn’t be balancing his budget with money from a pension reform plan that has yet to pass, let alone be tested in court.
“I think the governor proposes to engage in conduct which I would consider reckless,” Madigan said.
He said Rauner’s plan cuts benefits, unlike the pension reform bill he championed that he said only cut increases in benefits going forward. Also, Madigan said the state did not count on any savings from the pension reform bill, which is currently being heard by the Illinois Supreme Court.
* But I agree with Mark Brown…
On Wednesday, House Speaker Mike Madigan renewed his call for an income tax surcharge on millionaires, which I don’t regard as either serious or responsible
The truth is, nobody is being serious about this budget. Not Rauner and not Madigan. The Democrats have been completely unserious for way too long, and the new governor clearly demonstrated yesterday that he’s not above the same sort of ridiculous sleight of hand games that the Democrats have played for years.
posted by Rich Miller
Thursday, Feb 19, 15 @ 9:58 am
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This is a great example why many of us are so disappointed with this Governor.
Even though I didn’t vote for him, I was OK with him being elected. I thought he would govern as a fiscal conservative, and one who could work across the aisle to get things done.
Unfortunately, despite his date nights, he’s governance style is closer to Blagojevich than Thompson. He’s tossing out plans that have zero chance of success, but that get him favorable coverage in right wing media.
He’s acting like the job of Governor is about putting on a show for a select audience rather than getting stuff done.
It really is too bad. We had high hopes for real progress.
Comment by Gooner Thursday, Feb 19, 15 @ 10:11 am
Rauner is relying on the Sidley minority opinion about being able to cut unearned benefits. Based on existing rulings, I don’t see how this can pass the constitutionality test.
So with a $2.2B hole in the FY16 budget, is Rauner going to ask for a revenue increase or is he just going to use those extraordinary budget powers he wants and short the pension fund contributions by $2.2B?
Or will he try to cost shift all current TRS / SURS pension costs onto local government units, which will result in a propoerty tax increase? Maybe that is why he wants a property tax freeze; to prevent property taxes going up after he does that shift?
Comment by RNUG Thursday, Feb 19, 15 @ 10:11 am
I was very sorry to see Rauner coming out of the gate with union attacks. I hoped that he would be a moderate on labor, but he and his very wealthy supporters are on a national crusade to weaken unions. He is creating ill will at a time that we all desperately need to work together to dramatically improve our fiscal situation.
Rauner is doing it again with pension reform that is legally shaky.
I learned something today about the millionaire surcharge, that it could be unconstitutional as a progressive tax. I thought a surcharge and a tax could technically be different. Bad assumption and bad on me for not exploring further.
I am still trying to remain hopeful that our elected representatives can come up with something that is not draconian or demonizing to any group.
Comment by Grandson of Man Thursday, Feb 19, 15 @ 10:18 am
The pension proposal and banking the savings is flim flam. Quite a punt after all that campaign talk.
Until this fiscal, the budgets during the Quinn years were based in reality: a combination of increased revenues and cuts, full boat pension payments, unpaid bills knocked down by about $4 billion.
Comment by Wordslinger Thursday, Feb 19, 15 @ 10:19 am
Shifting the pension costs to local governments, with implementation over a 10 year period, seems a sensible way to address the pension issue.
Comment by Apocalypse Now Thursday, Feb 19, 15 @ 10:19 am
I guess Dorothy was wrong—it appears that we now are in Kansas or at least South Wisconsin.
Comment by HL Thursday, Feb 19, 15 @ 10:24 am
== the millionaire surcharge, that it could be unconstitutional as a progressive tax ==
I’ve always assumed it would require a constitutional amendment to implement for that reason.
I also suspect a tax on retirees with a high deductible, such as the proposed $50K, might wander into a questionable area vis a vis the flat tax provision.
I haven’t taken the time to run any numebrs but one idea that might be interesting to propose and see how it faired under the flat tax rule would be raising the income tax to between 6% and 10%, eliminating all deductions, and exempting the first $50K or so of income for everyone.
Comment by RNUG Thursday, Feb 19, 15 @ 10:28 am
Other states have tried to do what Rauner mentions with not so good results. This is from an email received from TRS:
NIRS [National Institute on Retirement Security]: Shifting to DC [Defined Contribution] did not save money for states
By Hazel Bradford | February 10, 2015 2:12 pm | Updated 2:18 pm
Three states that shifted to defined contribution from defined benefit plans did not save money, said new case studies from the National Institute on Retirement Security.
NIRS researchers looked at Alaska, Michigan and West Virginia, which switched new employees to defined contribution-only accounts to deal with pension underfunding and rising costs. After looking at demographic changes, benefit costs, actuarially required contributions, plan funding levels and retirement security, NIRS found the switch exacerbated pension funding problems and increased pension costs to employers and taxpayers.
“People still have this misperception that switching will save you money. Switching to a DC plan does not solve the problem,” said NIRS Executive Director Diane Oakley in an interview. “The real problem is you’ve got to find a way to fund the plan.” She added that DC plans cost more for sponsors when providing a similar level of retirement security as participants get from a DB plan. “It will save you money only if you significantly cut benefits,” Ms. Oakley said.
In 2006, Alaska moved all new employees into DC accounts to address unfunded liabilities caused in part by inadequate employer contributions. The total unfunded liability has since doubled to $12.4 billion.
In 1997, Michigan closed its overfunded DB system to new state employees, who were offered a DC plan. The DB plan’s funded status dropped to about 60% by 2012 but has been improving in recent years, while retirement security for DC participants has decreased, NIRS said.
In 1991, West Virginia closed its teachers retirement defined benefit system to new entrants, who were offered a DC plan. The DB plan was reopened to all teachers in 2008 after a study showing that providing equivalent benefits would be less expensive in the DB plan. Because of improved funding, the teachers’ pension plan is expected to be fully funded by 2034 and projected to save $1.2 billion within 30 years by moving participants back to the DB system.
The case studies are available on NIRS’ website.
www.nirsonline.org/storage/nirs/documents/Case%20Studies/public_pension_resource_guide_-_case_studies_of_state__pension_plans_that_switched_to_defined_contribution_plans.pdf
Comment by Nearly Normal Thursday, Feb 19, 15 @ 10:30 am
I believe the Governor really tried his best for his first budget with just a month to put together. Unfortunately, but rather fortunately, those entities who were negatively impacted by his budget proposal can now demonstrate to the legislature and public over the coming months why their state funding is important. Hopefully, all those who believe there is so much “waste” in government can see that such state funding really does impact people’s lives and livelihood. To me, the Governor (and Donna) will hopefully see the real compassionate side and need of state government.
Comment by My take ... Thursday, Feb 19, 15 @ 10:35 am
The knowledgeable critics of Rauner’s numbers and budget blueprint on this blogs, have all along said we cannot simply cut our way to a balanced budget. It will need more than extreme cuts to spending. The arithmetic is unforgiving.
Rauner proved these budget critics correct yesterday.
Even with all his cuts being passed — tough cuts by any standard — Rauner’s budget is still $2.2B short. He needs to count savings from a pension change, which cannot occur as scheduled, to pretend to balance. For 2015, he has asked for and needs $1.6B in funds transfers, of the sort he promised not to do.
I fell sorry for Rauner, because there are no magic bullets as some on the right love to pretend. His lower taxes will not magically produce higher tax revenues from economic growth, and he knows it. His budget numbers don’t work without new taxes, or not paying bills and pension payments.
Time to get serious.
Comment by walker Thursday, Feb 19, 15 @ 10:38 am
On the political side standing up to the Governor on his pension proposal provides an opportunity for the Democratic leadership to repair relations with important segments of their base, possibly even expanding it. A base whose support they will greatly need in the next two election cycles.
Comment by east central Thursday, Feb 19, 15 @ 10:39 am
===The truth is, nobody is being serious about this budget.===
That’s sort of how I explained it to my boss yesterday, who was a little freaked out about the possible cuts.
And he wonders why I’m so cynical about politics? Because I’ve been paying attention to this stuff for a long time.
Comment by 47th Ward Thursday, Feb 19, 15 @ 10:40 am
If those 6 figure pensions are eating him alive why didn’t he propose to tax them?
Comment by foster brooks Thursday, Feb 19, 15 @ 10:41 am
==conduct which I would consider reckless==
Nothing could be more reckless than the current Quinn Madigan and Cullerton budget. Glass houses and all that.
Same goes for Rauner. He went to the Madigan school of imaginary budgeting on the pension ==savings==.
Comment by Formerly Known As... Thursday, Feb 19, 15 @ 10:43 am
The six figure pensions bother him so much……probably what he spends on himself in a month. Greedy people always begrudge anyone else having so much as one penny.
Comment by AnonymousOne Thursday, Feb 19, 15 @ 10:47 am
The most interesting thing to me is that his proposal is not focused on moving employees to 401k. They must have figured out that such a wholesale move would be a financial disaster.
Comment by Norseman Thursday, Feb 19, 15 @ 10:50 am
Rauner is a hypocrite. Gunning to rob the pensions of moderately paid clerks and teachers while refusing to touch the pensions of police and firefighters.
I think he’s banking on those two groups protecting him when the masses have had enough.
Rauner might want to read up on French history, circa 1790.
Comment by See the forest Thursday, Feb 19, 15 @ 10:57 am
The millionaire surcharge might be unconstitutional. Just as the supporters of SB1 said “only the opinion of the ISC matters, and no one else knows”, we should test the millionaire surcharge by passing it and overriding the sure plutocrat veto. Guess it’ll be the millionaire’s turn in the barrel then, huh Rich?
Comment by PublicServant Thursday, Feb 19, 15 @ 11:05 am
==Rauner might want to read up on French history, circa 1790==
The whole US, if not the world right now, might want to read up on French history circa 1790.
Comment by Formerly Known As... Thursday, Feb 19, 15 @ 11:19 am
==The millionaire surcharge might be unconstitutional.==
The language of the constitution and the statements made at the convention regarding the prohibition against graduated rate taxes are a lot clearer than anything regarding retirement. Not a chance that the millionaire’s tax proposals would be constitutional.
Comment by Anon. Thursday, Feb 19, 15 @ 11:23 am
A good governor wouldn’t bank on savings based upon a favorable court decision which has a very poor chance of going his way. A good governor wouldn’t even allow room in his brain to think he would be so fortunate.
Shifting state employees hired before the Tier Two system was put into place is unconstitutional. These state employees have been earning that unpaid pension, by their monthly payments into that system for the past several years. It is clearly unconstitutional to alter the contracts that have been monthly adhered to by state employees.
Finally, I believe that if theses 401Ks the Tier Two lose value - that would also be unconstitutional. You see, citizens of Illinois who provide services for wages and pensions from the state of Illinois, cannot have a future General Assembly, or Governor - for political reasons only benefitting themselves or their policies - not fulfill the contractual obligations.
Rauner wasn’t governor when the General Assembly started failing their fiduciary responsibilities to state employees, but his plans so far are making the victims be victimized again by denying them their constitutional rights as Illinoisans.
Budgeting upon this is pathetic and un-gubernatorial. For the first budget out of the gate during this time of crisis, Governor Rauner is demonstrating that he can’t fix this problem without legal magic that is clearly unconstitutional.
Comment by VanillaMan Thursday, Feb 19, 15 @ 11:24 am
HL @ 10:24
We are not in Wisconsin or Kansas. We are in Oz, where the man behind the curtain remains MJM. There is a new mayor of Munchkinland, however…
Comment by Toto Thursday, Feb 19, 15 @ 11:31 am
==The millionaire surcharge might be unconstitutional==
Which means we should pass it, count the ==savings== in our budget and spend it immediately, right? /s
Good question yesterday about the pension savings, @PublicServant. I did not get a chance to reply on that thread but also understand it as a budget gimmick like so many others we have seen. Budgeting using large amounts of unreliable projected revenue, like the budget we have now, is not shaking up Springfield but more of the same.
Comment by Formerly Known As... Thursday, Feb 19, 15 @ 11:34 am
According to the governor’s budget address, starting July 1, 2015, all workers pension(s) (SERS, TRS & SURS) will be frozen & will be switched to a 401K (no money into the pension fund = no money out). Plus… if the State does not make it’s pass- due payments into the pension fund, our pensions will have no money to draw from. I’m not sure if SS can be frozen or not (some state employees pay into SS too). I do not know if the legislature or judges’ pension will be frozen and switched to a 401K too. His budget will affect the retirees after the funds dry up.
Comment by Mama Thursday, Feb 19, 15 @ 11:38 am
Madigan…said Rauner’s plan cuts benefits, unlike the pension reform bill he championed that he said only cut increases in benefits going forward.
This statement is demonstrably false. Madigan’s pension plan, SB1, gutted the money purchase formula in SURS for anyone retiring after July 1, 2014 who was not eligible to retire on July 1, 2013. By changing the prescribed rate of interest from 7.75% to less than 4%, annuity factors would rise substantially and initial benefits under the formula would be drastically reduced, by about 30% for a 60-year old retiree, based entirely on past, not future, employee and employer contributions. And this is, of course, on top of the drastic cuts to future accumulations under the money purchase formula and the massive AAI cuts in SB1. Rauner’s proposed pension changes appear to have far less impact on most SURS employees than SB1, but of course all of the details have probably not yet been disclosed.
Comment by Andy S. Thursday, Feb 19, 15 @ 11:42 am
FKA, the proposed “savings” from SBI were never budgeted, unlike Rauner’s pension “plan.”
Comment by Wordslinger Thursday, Feb 19, 15 @ 11:43 am
@FKA, while I agree that we couldn’t count those funds responsibly as a revenue source in a budget, Madigan looks like he’s behind an attempt to pass a bill and override a veto to prompt a court fight none the less. Let’s get on with that.
Comment by PublicServant Thursday, Feb 19, 15 @ 11:45 am
RNUG 10:28 — I believe Rauner ran for office specifically to stop that type of taxation model and the millionaire surcharge.
Comment by Anonymous Thursday, Feb 19, 15 @ 11:47 am
Sorry, meant to say Madigan looks to be willing to advance the Millionaire Surcharge bill.
Comment by PublicServant Thursday, Feb 19, 15 @ 11:47 am
I think he just took another very large step to bolster and increase Union membership (word is that’s already begun) and pave the way for either a return to last years temporary tax rate or if he makes enough people mad, continue the push for a progressive income tax. What he just doesn’t get is government is the polar opposite of the private sector where he is king. Quinn got fired because he made enough voters mad, even his own party. How does Rauner think he will fare any better, especially with opposite party majorities? This pension reform proposal is beyond ridiculous which is exactly how it made him look.
Comment by Former Merit Comp Slave Thursday, Feb 19, 15 @ 11:55 am
I just can’t pile on overmuch here though, on either Rauner nor Madigan.
Neither one of them is being honest. But both of them are operating under a Constitution that is more of a hindrance than a help. And if either of them said -that- truth, I predict they’d get pilloried for it.
Rauner can’t govern, because what he wants to do (punish pensioneers) is unconstitutional under the Pension Clause.
Madigan can’t govern, because what he seems to maybe want to do (progressively tax the wealthy) can be accomplished one day but not anytime soon.
So you can say, “Well they should govern realistically in the now, given the impositions that the IL Constitution provides.” And I get that. Governing is about the art of the possible, and we face problems now that have to be addressed. But the long-run follow-up should be, “But, they are unwise impositions!” Constitutions should protect fundamental civil liberties like the right of free speech, civil rights like freedom from racial discrimination. When constitutions try to guarantee special _economic_ civil rights, whether for the very rich (not to be taxed overmuch) or for state retirees (for their payments to be protected with a much stronger guarantee than every other Illinoisan who receives money from Springfield), we can wind up … pretty much where we are. And let me stress that I’m not opposed to paying state retirees to afford them dignity and comfort. But stating that a 3% compounding COLA should possess effectively the same constitutional status as free speech, or the free exercise of religion … I just can’t go there.
Rich has said a couple of times that IL needs its own “model” for how to move forward. Well, Rauner has a model, and Madigan may now have a model. But constitutionally, neither of them can actually implement it. So we muddle on. Rant over.
Comment by ZC Thursday, Feb 19, 15 @ 11:57 am
Counting on savings from pension diminishment that is unlikely to survive a court battle and cuts to health insurance that hasn’t been negotiated yet is like spending tomorrow’s lottery winnings today.
Comment by AC Thursday, Feb 19, 15 @ 11:59 am
I have been a Democrat for decades and will probably always be, formally, but if there were a viable Grown-Up’s Party, I would defect to it in a flash.
Comment by jake Thursday, Feb 19, 15 @ 12:00 pm
- Mama -
The way I read it, Rauner is proposing forcing all “Tier 1″ into “Tier 2″ and wants to offer the 401K as a voluntary option. So there will still be money going into the 5 pension funds, just $2.2B less than under the existing environment under the mistakne assumption the IL SC will agree his plan is legal.
SS is a federal program that Rauner has no control over. In fact, the Feds insist the State pay their SS obligations to SSA every month.
Comment by RNUG Thursday, Feb 19, 15 @ 12:05 pm
Obvious question: if it was this easy to switch current employees from Tier 1 to Tier 2 — why wasn’t it done in 2010 when Tier 2 was established?
Comment by Macbeth Thursday, Feb 19, 15 @ 12:08 pm
- Anonymous - @ 11:47 am:
I’m sure he did.
In fact, while I’m not big on conspiracy theories, I’m starting to think that a certain section of the GOP has adopted a plan the Libertarian Party once proposed: to take over a State by moving there and voting their own people in to achieve their goals. In this case, it seems we’re seeing an attempt to just flat out buy the State. I kind of see why they would try Illinois with its’ strong executive office and line item veto power but I don’t really get why they think they could succeed in a left leaning state.
Time to put the tin foil hat back on ….
Comment by RNUG Thursday, Feb 19, 15 @ 12:13 pm
== if it was this easy to switch current employees from Tier 1 to Tier 2 — why wasn’t it done in 2010 when Tier 2 was established? ==
Because it clearly violates the Constitution’s pension clause
Comment by RNUG Thursday, Feb 19, 15 @ 12:15 pm
=== jake - Thursday, Feb 19, 15 @ 12:00 pm:
I have been a Democrat for decades and will probably always be, formally, but if there were a viable Grown-Up’s Party, I would defect to it in a flash ===
Me too. A pox on all of them.
Comment by dupage dan Thursday, Feb 19, 15 @ 12:17 pm
The sad fact that a “defined contribution plan” can cost more depending on the amount of the contribution. The way most private sector companies work it is that they don’t commit to certain MATCHING contributions to a 401K until the first quarter of a new year. If its a bad financial year, sometimes there’s no matching contribution.
Don’t underestimate the cost saving value of making “matching” contributions (50% of the first 6% of salary contributed is typical) instead of “defined” contributions that are deposited whether the employee contributes or not. A LOT of employees choose not to contribute to their 401K.Not smart, but it reduces pension costs to the employer significantly.
That DEFINTELY should be part of the pension plan.
Comment by Arizona Bob Thursday, Feb 19, 15 @ 12:23 pm
The police and fire unions must hire some of the best photographers in the world.
I say this because they must have ‘pictures’ on all such politicians who exempt them, and only them, from any pension cuts.
Don’t hear anything about judges pensions either? Am I wrong, or do they also have excellent photographers?
Comment by Federalist Thursday, Feb 19, 15 @ 12:30 pm
RNUG stated:
the millionaire surcharge, that it could be unconstitutional as a progressive tax ==
I’ve always assumed it would require a constitutional amendment to implement for that reason.
The millionaire tax waa a public relations gambit by Democrats to turn out the vote. If the backers had been serious they would have worked to put a Constitutional Amendment on the ballot.
I also suspect a tax on retirees with a high deductible, such as the proposed $50K, might wander into a questionable area vis a vis the flat tax provision.”
Excellent points.
The millionaire tax waa a public relations gambit by Democrats to turn out the vote. If the backers had been serious they would have worked to put a Constitutional Amendment on the ballot.
I too have wondered about taxing retirees who receive over a certain amount as being unconstitutional. It may or may not be considered different by the ISC. This angle gets a little dicey and personal opinion and politics among the judges might play a more prominent role in their decision- not certain.
Comment by Federalist Thursday, Feb 19, 15 @ 12:38 pm
- Federalist -
No, they just know where the bodies are buried …
Comment by RNUG Thursday, Feb 19, 15 @ 12:41 pm
The Speaker might be serious about passing an amendment that enables the surcharge. It could also be written in a manner that opens the door for a progressive tax rate.
Comment by east central Thursday, Feb 19, 15 @ 12:41 pm
Thanks RNUG.
I knew it had to be something, I just missed the real reason, but I was kinda’ close.
Comment by Federalist Thursday, Feb 19, 15 @ 12:45 pm
Quick question, if the State switches to a DC pension plan, will they still be exempt from collecting and paying FICA?
Comment by Leonard Skinner Thursday, Feb 19, 15 @ 1:05 pm
@ see the forest….
Rauner is a hypocrite. Gunning to rob the pensions of moderately paid clerks and teachers while refusing to touch the pensions of police and firefighters.
The firefighters have been standing alongside the rest of labor and have been very vocal in opposing Governor Rauner and his positions. You don’t think they know they will be the target after Rauner finishes with the other unions? They were one of the very first labor organizations to support the We Are One campaign and remain a fixture.
Learn your history-dope!
Comment by NewWestSuburbanGop'er Thursday, Feb 19, 15 @ 1:24 pm
== if the State switches to a DC pension plan, will they still be exempt from collecting and paying FICA? ==
First off, the State is already paying FICA for a lot of the SERS employees. The State is not paying FICA for the other systems: JRS, GARS, SURS (with some exceptions) and TRS
To answer the question, it’s going to depend on how the plan is structured and what claims the State makes about a proposed DC plan.
Comment by RNUG Thursday, Feb 19, 15 @ 1:26 pm
Leonard, in SURS since 1998 new employees have had a defined contribution option, to which the State contributes 7% of salary, and they don’t have to participate in SS. I think as long as the state contributes more than the 6.2% employer portion of the payroll tax, they could get away with not having to offer SS. But Tier 2 already costs the state about that, or perhaps even less, so there would be no savings from switching new employees, or Tier 2 employees, to a defined-contribution plan. The only savings would come from switching Tier 1 folks for future work, and this is likely unconstitutional based on previous court rulings.
Comment by Andy S. Thursday, Feb 19, 15 @ 1:34 pm
===House Speaker Mike Madigan renewed his call for an income tax surcharge on millionaires…===
The voters overwhelmingly approve of this tax surcharge on income over one million dollars. Madigan can use this to come to the rescue of the people of Illinois, who may soon regard the house speaker as a hero compared to the governor.
Comment by Enviro Thursday, Feb 19, 15 @ 3:12 pm
“The truth is, nobody is being serious about this budget.”
Rich, exactly what I was thinking when I heard the speech and the 4 Tops afterward; It will take alot of work to get out of the mess, and it won’t be quick - these guys are still in the political moments.
Comment by Mister M Thursday, Feb 19, 15 @ 4:09 pm
If pension health care is eliminated from TRS what happens to the THIS payment that all teachers retired and active have paid over their careers.
Member THIS. (Insurance) contribution examples.
2011 0.88% 2012 0.92% 2013 0.97% 2014 1.02% of salary.
Should this not be refunded if the benefit is not provided and is this not a contractual payment for health care?
Comment by Griz Thursday, Feb 19, 15 @ 4:40 pm
I think the pension proposal is all about the upcoming contract negotiations. I think Rauner wants to use salary and other work related issues to win some concessions on pensions from those still working. He has a divide an conquer strategy leaving retirees off the table…I do agree with that but I think it is to make it all about those still working. I believe he realizes pensions can not be diminished without agreement from the employees in exchange for something else.
Comment by facts are stubborn things Thursday, Feb 19, 15 @ 5:01 pm
Facts, I think the pension and healthcare proposals were numbers picked out of the air when they figured out they were about $3 billion short of proposing an allegedly balanced budget.
Comment by Wordslinger Thursday, Feb 19, 15 @ 5:10 pm
== pensions can not be diminished without agreement from the employees in exchange for something else. ==
If the union cuts a deal like that, it will only last the amount of time fopr someone to file suit.
Comment by RNUG Thursday, Feb 19, 15 @ 5:12 pm
Griz, good question. Since the THIS fund contributions were spent as collected on current insurance subsidies, there is not a reserve of cash available to be refunded. You may want to consult with your Union rep if you are active/covered under a CBA.
Comment by Arthur Andersen Thursday, Feb 19, 15 @ 5:17 pm
TRS will refund lump sum without interest at your request. Will the Governor be paying compounding interest for 30 years of service to a 401K of my choice outside the State of Illinois control or access? Trust issue now…
Comment by Griz Thursday, Feb 19, 15 @ 5:42 pm
@NewGop: Rauner’s making the decision to exempt police and firefighters from pension cuts. He said so himself back in April 2014.
Rauner said that police and firefighters deserve the pension because they “should have a special deal that’s much better and different than voters, are police and firefighters because they risk their lives, and that’s a different arrangement.”
If the state’s so broke, it’s broke then. Cuts should be across the board, with no special favors.
In the World According to Rauner, a dignified retirement is only for a select few: police/firefighters, while everyone else should live under a bridge and eat cat food in their old age.
Rauner knows he can’t get police and firefighters p.o’d., not with the 9 houses he owns. He’s just looking out after his selfish, greedy rump.
What a soulless, venal man.
P.S. Read my earlier comment carefully and use some critical thinking skills before you start spouting off word like “Dope.”
Comment by See the forest Thursday, Feb 19, 15 @ 6:09 pm
P.S NewWestSuburbanGop: Rauner’s mentor, Governor Scotty Boy in Wisconsin, has yet to touch police and fire pensions.
Read the article “The True Origins of Police — Protecting and Serving the Masters of Society.”
Comment by See the forest Thursday, Feb 19, 15 @ 6:14 pm
What about judges and legislator pensions? Don’t hear about them either?
Comment by AnonymousOne Thursday, Feb 19, 15 @ 8:12 pm
Under his proposal, on July 1, 2015 members of
the four state sponsored pension systems
(excluding judges) hired before January 1, 2011,
commonly referred to as “tier 1,” who have not
begun to receive a retirement annuity will have
their benefits frozen as if they had terminated
service. No changes will be made to the benefits
that have already been earned (as well as COLAs to
which these employees will be entitled upon
retirement). The freeze of benefits will not apply to public safety employees.
Retirees also will not be affected.
Those members who had their benefits frozen will
earn future benefits for all service after July 1, 2015 under the benefits plan that currently applies to members first hired after 2010 (commonly referred to as “tier 2”). With this reform, going forward, all employees will be treated fairly, with equal benefits.
Comment by Griz Thursday, Feb 19, 15 @ 8:57 pm
===Madigan can use this to come to the rescue of the people of Illinois, who may soon regard the house speaker as a hero compared to the governor.===
Compared to the Governor, Mr. Potter is a hero…just sayin
Comment by PublicServant Friday, Feb 20, 15 @ 8:55 am