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Spiking, living large and the Supremes

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Illinois

* Riopell writes about a little-noticed Bruce Rauner proposal from yesterday…

Rauner wants to change a state law that makes local school districts pay penalties if they give big end-of-career pay raises to teachers and administrators.

School districts can still give the pay raises, but the state says local officials have to pay for the pension consequences.

Now, school districts have to pay penalties if they give late-career pay raises of more than 6 percent. Rauner wants to enact penalties for those pay raises if they’re greater than the rate of inflation, which lately has been around 1 percent. […]

Most districts avoid big penalties, even writing in a 6 percent pay raise cap into their contracts with teachers. But 1 percent is a lot lower, of course.

“While a so-called reform was enacted in an effort to prevent pension spiking, teacher contracts in recent years have made the six percent cap a floor rather than a ceiling,” Rauner spokesman Lance Trover said.

Whew.

* Meanwhile…

The ABC7 I-Team has been looking into a mind-boggling statement made by the Gov. Bruce Rauner on Wednesday.

“One out of every four dollars taken from taxpayers by the state goes into a system that is giving more than 11,000 government retirees tax-free, six-figure pensions worth as much as, in one case, $450,000 per year,” Rauner said. […]

The person receiving a $450,000 pension went unnamed, but the I-Team has learned he is a man named Tapas Das Gupta, a doctor retired from University of Illinois Chicago Hospital. Currently taxpayers are footing his annual pension of $452, 843, but what the governor didn’t mention is that the No. 2 top pensioner also makes about that much. […]

Runner-up top state pensioner is Dr. Edward Abraham, a UIC orthopedic surgeon educated in Beruit, Lebanon, who retired at age 66 and receives a $439,000 a year pension.

Even as he receives that pension, Dr. Abraham has been hired back here at UIC part-time. It’s double dipping that is perfectly legal in Illinois and that other state pensioners take advantage of.

* And…

The Illinois Supreme Court has announced it will hear oral arguments in the state’s landmark pension-overhaul case on March 11.

Arguments will begin at 2:30 p.m. in the high court chamber in downtown Springfield.

posted by Rich Miller
Thursday, Feb 19, 15 @ 1:28 pm

Comments

What most people don’t realize is the “anti spiking” includes any pay that is received. For example, if a teacher picks up an extra assignment - a coaching position or something - that counts and would probably lead to “spiking.” If a teacher teaches summer school (and didn’t the year before), that counts and would be spiking. ALL income (no matter for extra work or a promotion) is included in considering the spiking if it is in the last four years prior to retiring.

And - you don’t know when someone is going to retire. Hard to go back four years and undo what is already done.

And how do you prevent someone from earning more than a percent or two than they did last year in their last four years? Do you say nobody over age 55 can have any extra assignments, or teach summer school? Hmmm, no age bias problem there.

Comment by archimedes Thursday, Feb 19, 15 @ 1:35 pm
What Gov. Onepercent Bruce failed to mention Is what the Average pensioner makes! All this from a Billionaire who makes $250,000 an hour buying companies and sending them overseas. Proof that greed is infinite!

Comment by good cop bad cop Thursday, Feb 19, 15 @ 1:38 pm
The double dipping,end of career sweeteners, and the like didn’t cause all of the problems, but they certainly don’t help. If our leaders want public buy in to fix the pendion problem, that needs to be addressed because it is seen as a giant trough for the political insider class.

Comment by The Way I See It Thursday, Feb 19, 15 @ 1:38 pm
“While a so-called reform was enacted in an effort to prevent pension spiking, teacher contracts in recent years have made the six percent cap a floor rather than a ceiling,”

Interesting rhetoric, but on its face, the statement makes no sense. It is a ceiling…period.

Comment by veritas Thursday, Feb 19, 15 @ 1:38 pm
And his attacks on those making modest incomes continue. Still waiting for his rich friends to be included in this “shared sacrifice.”

Comment by Demoralized Thursday, Feb 19, 15 @ 1:40 pm
– educated in Beirut, Lebanon –

What does that have to do with anything, Chuck? Are you trying to imply something about Dr. Abraham and his Beirut connection?

I know Chuck’s mind is easily boggled, but a little context on the world market for surgeons at teaching hospitals would be enligtening.

And “six figure” pensions start at 100K, after a lifetime of employee contributions. That might cover Chuck’s annual tanning booth nut.

Comment by Wordslinger Thursday, Feb 19, 15 @ 1:41 pm
And the real rub is that if the anti spiking legislation becomes law and effective 7/1/15, the raises are in the existing contract so school districts can’t do anything to avoid the penalties until the next contract. When the 6% provision became law, it had a rather long implementation period to prevent this issue.

Comment by Salty Thursday, Feb 19, 15 @ 1:42 pm
The doctor’s pension is literally 100 times less than Rauner’s income last year, but above the $30k a month he’s paying his budget consultant to tell him trickle-down works.

Comment by Bull Moose Thursday, Feb 19, 15 @ 1:45 pm
The thing about academic doctors who make that much is that they usually have a fairly low base pay and the rest of the salary they earned is based on the grants they receive. For example the base pay at Washington University is about $40,000 per year for an academic MD. These two doctors ABC identified likely brought in millions in grants to U of I. They may have created intellectual property owned by the university as well. Are they double dipping? In some sense, but they are also likely working on a grant at the same time so they are bringing in more even as a retired worker. Let’s scapegoat some of the most productive people in Illinois government.

That’s not an easy story to explain, but the details matter.

Comment by ArchPundit Thursday, Feb 19, 15 @ 1:47 pm
Hopefully Tapas gets the 3% cost of living adjustment this year, cause $452, 843 a year tax free simply wont do in the crazy 1% inflation world we live in.

Comment by Very Fed Up Thursday, Feb 19, 15 @ 1:47 pm
Or in other words, get rid of retirement incentives and keep the expensive teachers on the books for a longer period of time. Incredibly short sighted proposal that will lead to the $200,000/year gym teacher who will be 67 years old. Nice job, Bruce. You just raised my property taxes again!

Comment by Now What? Thursday, Feb 19, 15 @ 1:50 pm
To add a small bit–these doctors may have made the money in practice partially as well and in that case they bring in a ton of money as well.

Comment by ArchPundit Thursday, Feb 19, 15 @ 1:50 pm
Following up on ArchPundit, most doctors at U of I earned far less than they would have in private practice, in order to train med students and residents, and also treat the lower-income patients that the U of I hospital serves. The pension was part of the compensation package for the doctors.

$400K is not typical, of course.

Comment by Anonymous Thursday, Feb 19, 15 @ 1:53 pm
===but the details matter===

No to Chuck Goudie.

Comment by 47th Ward Thursday, Feb 19, 15 @ 1:57 pm
*Not*

Comment by 47th Ward Thursday, Feb 19, 15 @ 1:57 pm
Instead of cherry picking the top 1% of the top 1% of state retirees, lets cherry pick the top 1% of the top 1% of the uber rich and see how the can help a little bit more in funding lower income programs that are being gutted. A little shared sacrifice would be nice, across all clases please.

Comment by Anonymous Thursday, Feb 19, 15 @ 2:01 pm
Anonymous–yes, most don’t make that much. Gupta has done an incredible amount of research on cancer and works on drug trials so while he’s not the norm, there is a reason he’s so well compensated.

https://www.researchgate.net/profile/Tapas_Gupta

I’m pretty literate when it comes to biological science and even with that his titles lose me.

Comment by ArchPundit Thursday, Feb 19, 15 @ 2:01 pm
Arch, enough already with your fancy mind-boggling!

The guy went to school in Beirut, get it?

Comment by Wordslinger Thursday, Feb 19, 15 @ 2:08 pm
The limit to one’s salary eligible for pension should have been the Governors’ salary. That should have been done a long time ago and indeed it was proposed in the past.

Rather than attacking lesser pensions this would have made more sense. The employee (usually medical and law faculty and high level administrators)would still have handsome pension and any amount the Governor’s salary would not be paid into the pension system by the employee.

Now it is desperation time!

Comment by Federalist Thursday, Feb 19, 15 @ 2:13 pm
Guessin’ the docs paid in the usual % for their time on the payroll..or is BVR claiming the swindled state?
BTW how a list of the town with the $15 billion BVR talked about?

Comment by Anonin' Thursday, Feb 19, 15 @ 2:15 pm
At 1.67% per year how much would I have to make for how many years to take home a pension over $425,000 per year?

Comment by Yatzi Thursday, Feb 19, 15 @ 2:15 pm
The state pays nothing for the pensions of professors or doctors who are paid from the grants they recieve to do research. The prof/Dr. pays in 8% to SURS and the grantor picks up the employer/State match plus health insurance and all other benefits, i.e., grant is assessed 30% of prof salary to cover all benefits that the state is otherwise obligated to pay for other state employees paid from appropriated funds.

Comment by Anonymous Thursday, Feb 19, 15 @ 2:17 pm
Here’s a constitutional solution-tax retirement income. I will enjoy watching the arguments in the ISC.

Comment by Demise Thursday, Feb 19, 15 @ 2:19 pm
Hmm………….450K vs 60 million. All I can say is thank God it wasn’t anyone in Education because everyone knows how worthless that job is! (of course when your children are involved, you want the best, right?) How did those doctors get to where they are? School? Education? Anyway, there continues to be a feeling that somehow these pensions are gifts. The people earning the pensions contributed alot from their income to be able to receive that retirement benefit. And besides, I thought being highly educated, working hard (and harder than most) was American…..a good thing? People will defend Bruce’s income as industrious, savvy and bright and look how much more he earns. No one seems to begrudge his earnings. Are these doctors slackers and unworthy….is that the implication?

Comment by AnonymousOne Thursday, Feb 19, 15 @ 2:22 pm
===The guy went to school in Beirut, get it?

Yeah, thank you. I wanted to point that out to, but four in a row was a bit much.

Comment by ArchPundit Thursday, Feb 19, 15 @ 2:27 pm
===The prof/Dr. pays in 8% to SURS and the grantor picks up the employer/State match plus health insurance and all other benefits, i.e., grant is assessed 30% of prof salary to cover all benefits that the state is otherwise obligated to pay for other state employees paid from appropriated funds.

I guessed this was the case as well, but didn’t want to assume about the Illinois system.

Comment by ArchPundit Thursday, Feb 19, 15 @ 2:28 pm
I smell another EO!

I’m waiting for Rauner’s edict saying muffins in the statehouse cafeteria have to have the same number of blueberries in each one.

Comment by Jocko Thursday, Feb 19, 15 @ 2:30 pm
As a teacher. Go ahead and take 6% incentive away. I will just work another five years or so that will cost the district and the state more money in the long run.

Comment by sparky791 Thursday, Feb 19, 15 @ 2:33 pm
Dr. Das Gupta is a world renown cancer specialist who has saved the lives of many women in Chicago and beyond. My daughter and son’s school Principal told me verbatim that he saved her life. He could have practiced any where in the world, but he chose to stay @UIC. Consider the women and their the families of those women he saved from a painful slow death, some of them in their prime and then we’ll talk….

Rauner has a ton of gall for calling this out….what has he personally done to better the fortunes of his fellow man and/or alleviate pain and suffering in his business ventures? Bruce’s golden parachute is worth way more than Tapas’ I’m willing to bet…scoundrel…

Comment by Loop Lady Thursday, Feb 19, 15 @ 2:36 pm
How is working after retirement “double dipping”? They are working for the pay. How does that cost more then someone else doing the job and getting paid for it?

Comment by DuPage Thursday, Feb 19, 15 @ 2:37 pm
Sparky. How will working longer cost TRS more money. You max out after hitting if I recall 34 years. Also-every year your are active is one less year of pension benefits paid. If every teacher worked 39 years my guess is the unfunded liability would be favorably impacted.

Comment by Sue Thursday, Feb 19, 15 @ 2:41 pm
==six-figure pensions worth as much as, in one case, $450,000 per year==

Governor Rauner keeps using the most extreme examples to try to make his case. If you keep that up pretty soon people realize your tellin’ half truths.

Comment by Sangamo Sam Thursday, Feb 19, 15 @ 2:44 pm
I mean, I guess he could get a job as a greeter at walmart…many retirees do, but then he wouldn’t be being utilized to his greatest potential then would he?

Comment by PublicServant Thursday, Feb 19, 15 @ 2:45 pm
*you’re

D’oh!

Comment by Sangamo Sam Thursday, Feb 19, 15 @ 2:47 pm
Don’t the have a federal equal employment opportunity commission or something like that to which the good doctor complain if he weren’t able to even apply for the job like anyone else could? Just asking.

Comment by PublicServant Thursday, Feb 19, 15 @ 2:47 pm
Demise,

Taxing retirement income always comes up and if it were to include all retirement income, social security, pensions, railroad retirement, IRAs, etc. people would balk but of course, would pay. The folks who seem to get most upset with that idea are those collecting social security.

Comment by AnonymousOne Thursday, Feb 19, 15 @ 2:53 pm
Dr. Gupta, the latest star in the Rauner vilification campaign. It doesn’t matter that the man has taught hundreds (?) of doctors or saved x number of lives. He’s a former state employee and current state retiree. My god, what a horrible thing. I’m sure the state employee hating neanderthals out there will get an extra charge out of his heritage.

This from a man who couldn’t name one - remember the debate - ONE job he created in Illinois.

Yes, villify a life-saver and celebrate a billionaire’s ability to order expensive aides to cut services to the mentally ill, kids, seniors, etc.

Comment by Norseman Thursday, Feb 19, 15 @ 2:54 pm
Rauner makes much more and ruins — and has ruined — many lives. His companies have killed people.

Gupta saves lives.

You tell me who deserves the pension (and zero grief from the so-called “I-Team”).

Comment by Macbeth Thursday, Feb 19, 15 @ 2:55 pm
Anon-just one more reason for people to leave after they retire. Illinois was one of only two states to actually see its population decline in recent years. That’s staggering

Comment by Sue Thursday, Feb 19, 15 @ 2:56 pm
-Sue-
I guess on TRS front you could be right. Also, I know a lot of districts that are dropping this incentive as we speak. They are worried that state is going to push cost back on them, which looks like that is where we are headed.

Comment by sparky791 Thursday, Feb 19, 15 @ 3:02 pm
As a pensioner I agreethere are some things that should be stopped and can be stopped without violating the constitution. Let us start with a simple one. If you are receiving a pension and any other form of remuneration from the State your pension should be reduced dollar for dollar.

Comment by HL Thursday, Feb 19, 15 @ 3:05 pm
Sue, if you’re talking about taxing retirement as a shove out the door of this state, I get that. But as someone who doesn’t need to live here, I’d be gone if taxed on my retirement but there are other just as compelling reasons to leave. This environment is toxic.

Comment by AnonymousOne Thursday, Feb 19, 15 @ 3:06 pm
Government pensions are NOT “tax free” !!

Comment by forwhatitsworth Thursday, Feb 19, 15 @ 3:07 pm
The pensions are federally taxable, just free from state tax.

Comment by Name/Nickname/Anon Thursday, Feb 19, 15 @ 3:13 pm
Illinois sends so many tax dollars to DC and gets relatively few back.

Many professors at research universities each bring in millions of federal grant dollars per year. Does the State really want to encourage them to leave so that Illinois gets even fewer of its federal tax dollars back?

National competition for these professors is intense. Public universities in Illinois now have by far the worst pension benefit of any university in the Big Ten.

Comment by east central Thursday, Feb 19, 15 @ 3:22 pm
I read overview of Dr. Das Gupta experience and qualifications. His pension was well earned. If you want good people you have to pay them. Where did I hear that?

Comment by Bigtwich Thursday, Feb 19, 15 @ 3:25 pm
How is the threat to work longer supposed to cost more money? Yes, their salary will increase, but they won’t be taking a pension each year they work. I would imagine that their pension plus the salary of a new hire would be greater than the cost of the veteran salary, especially with caps on increases in final years.

Comment by Creative Nickname Thursday, Feb 19, 15 @ 3:26 pm
Gov Rauner is trying to make a Meal from Tapas. This trick is similar to Tribbies’ & Sun-Times’ successful bogus attacks on public pensions.
The papers would use examples like this Dr.’s or Gov. Edgar’s pension to lead into a story against pension benefits for union workers. The public fell for it then and will probably fall for it again.

Comment by Qui Tam Thursday, Feb 19, 15 @ 3:28 pm
Yes, I suppose Rauner’s objective in mentioning 6 digit pensions is to shame people like Dr. Gupta. I guess the doctor has such a big heart— he should not only work for the people for free, but should live in poverty in his old age. There’s the thanks you get.

Comment by AnonymousOne Thursday, Feb 19, 15 @ 3:40 pm
If we are about spiking and abuse of the pensions system by local school districts, why not just do the cost shift - then the State doesn’t pay it.

Make the cost shift revenue neutral - we’re trying to cure the abuse, not save the State $$. Put the money that would have gone into TRS normal cost from the State and give it to the schools.

Comment by archimedes Thursday, Feb 19, 15 @ 3:53 pm
Here is the reply brief in the pension litigation. I’ve been out of touch, so please forgive if it has already been posted elsewhere:
http://www.appellatestrategist.com/wp-content/uploads/sites/498/2015/02/Brief-of-ISEA-RSEA-Heaton-and-Harrison-Plaintiffs.pdf

Comment by Bobbysox Thursday, Feb 19, 15 @ 4:00 pm
“Government pensions are NOT “tax free” !!”

And Illinois incomes are not flat taxed.

This a discussion of the IL budget; federal taxation is essentially moot.

Comment by Chris Thursday, Feb 19, 15 @ 5:20 pm
Lets put all retirees on the website so all can see who makes top dollar. I think then all of IL can see who makes what instead of Rauner’s extreme pension claims. My guess is the “groups” he wants to exclude fall within the $100,000.00 + a year retirement. Put it out there for all to see.

Comment by Showmethemoney Thursday, Feb 19, 15 @ 10:15 pm
“How can the cost of pensions go up if you work longer?” Answer- your pension rate increases 2.2 for each year worked. Work an additional five years, your rate of pension increased 11% Not to mention your yearly salary most likely increased during that time. You are now paying a teacher at the high end of salary for years of service versus a young teacher at the low end. Do the math. Much more costly to keep teachers from retiring.

Comment by Rauner Wronger Thursday, Feb 19, 15 @ 10:30 pm
== your pension rate increases 2.2 for each year worked ==

Actually, while 2.2% is true for teachers under the one formula, for others that rate varies between 1.67% and 5%, depending on the retirement system, Tier, and in one case years.

Comment by RNUG Thursday, Feb 19, 15 @ 10:37 pm
- Showmethemoney -

Use the Goggle. It’s all online at multiple sites.

Comment by RNUG Thursday, Feb 19, 15 @ 10:38 pm