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* Republicans loyal to Gov. Bruce Rauner, including legislators and the Tribune editorial board, have been lambasting former Gov. Jim Edgar lately for causing today’s budget problems by devising a pension payment ramp that pushed the solution into the future. Edgar responded on Rick Pearson’s Sunday radio show…
Edgar noted the pension law marked the first time that the state was required to pay the employer’s share of public pension costs for state workers, judges, teachers outside Chicago and elected officials.
“People are rewriting history a little bit on this,” Edgar said of the criticism he has received.
“We just came out of recession. We couldn’t put a whole lot of money in that — that down the road the payments were going to have to increase,” Edgar said. He added, “Everybody knew that and were on warning you have to prepare for that. Unfortunately, what happened was things I couldn’t control after I left office.”
Edgar noted pension holidays by his successors, a downturn in the stock market after the terrorist attacks of 9/11, and the Great Recession all combined to put Illinois in a hole with a nation’s worst unfunded public employee pension liability of more than $100 billion.
“You had to stay disciplined,” said Edgar, who noted the legislation passed with bipartisan support in his re-election year and led to support from credit-rating agencies and newspaper editorial boards.
One of those editorial boards was the Tribune’s, by the way.
The full interview is here.
posted by Rich Miller
Tuesday, Nov 3, 15 @ 11:16 am
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About time somebody stopped giving Edgar a free pass. Thompson, Edgar, and Blago need to be in the same sentence for why Illinois is in such a fiscal mess.
I’m no fan of Rauner, but he can’t go around the state pretending he was the Golden Boy of Illinois fiscal responsibility.
Comment by Almost the Weekend Tuesday, Nov 3, 15 @ 11:24 am
What I find comical is that these attacks on Gov. Edgar never refute the pointed criticism Jim Edgar, a former governor, is making as to where Bruce Rauner, Illinois’ currevt governor, is failing, and that Bruce Rauner, governor of Illinois, is choosing in today’s choices to hurt people as a governing strategy.
It’s glaring, and comical.
I’m with Edgar on the responsibilities and ownership of governors to the processes of governing and budgetary responsibilites.
That’s what Jim Edgar did in framing his pointed remarks. Raunerites didn’t like it.
Comment by Oswego Willy Tuesday, Nov 3, 15 @ 11:25 am
now we have a different crisis from back then. it seems we always second guess what happened in the past. sometimes rightfully and sometimes why bother.
Comment by Levois Tuesday, Nov 3, 15 @ 11:27 am
The ramp was backloaded. It meant more pain down the road, but at least it was a plan. The point was to fund the pensions, and before the ramp there was no plan. Blame should just as surely go to all the govs and legislators before and after him who failed to adequately fund pensions. His attempt didn’t work out because legislators neither stuck to the ramp nor did they make cuts or tax increases to prepare for the coming payments.
Comment by Me too Tuesday, Nov 3, 15 @ 11:29 am
—“We just came out of recession. We couldn’t put a whole lot of money in that — that down the road the payments were going to have to increase,” Edgar said. He added, “Everybody knew that and were on warning you have to prepare for that. Unfortunately, what happened was things I couldn’t control after I left office—
Translation: “I didn’t want to make the hard choices at that time and we just decided to kick the can down the road. Unfortunately, the good people of the State of Illinois had less of a spine than I did and decided to hire people that decided to put my plan on steroids and make it 10x worse. They were even so smart that we decided to do it on a Federal Level and make it 1000x worse.”
Who is re-writing history Mr. Edgar?
Comment by BIG R. Ph. Tuesday, Nov 3, 15 @ 11:32 am
== “We couldn’t put a whole lot of money in that” ==
You set the precedent, Governor Edgar.
That excuse would be used a number of times in the years to come.
Comment by Anonymous Tuesday, Nov 3, 15 @ 11:32 am
So Edgar is saying…because Madigan?
Comment by Casual observer Tuesday, Nov 3, 15 @ 11:34 am
===That excuse would be used a number of times in the years to come.===
Except because the ramp was enshrined in law, they knew it was coming.
Comment by Rich Miller Tuesday, Nov 3, 15 @ 11:35 am
There is an ebb and flow to the economy—for everyone. Businesses had to deal with downturns in the early 80’s. the early 90’s, after 9/11 and from 2008 till……..now.
The legislators didn’t deal with it and here we are.
Comment by anon Tuesday, Nov 3, 15 @ 11:37 am
www.illinoisissues.uis.edu/archives/2010/02/pension.html
But the 1995 plan also was seriously flawed. Contribution levels were set too low in its early years to cover the costs of benefits earned each year plus interest on the unfunded liability, the sum needed just to maintain the status quo. Under its funding schedule, the deficit is projected to continue to grow until topping out at $150 billion in 2031, before dropping to $35 billion in 2045, when the systems would be 90 percent funded.
Comment by Formerly Known As... Tuesday, Nov 3, 15 @ 11:37 am
==The ramp was backloaded.==
A ==ramp==? As Ralph Martire said this year, it was more of a ==ski slope==
==Then they compounded the problem by passing a 50-year “pension funding ramp” in fiscal 1995 that created an amortization schedule so back-loaded it looked like a ski slope—with annual payments ballooning to the $16 billion range. For the first 15 years following its enactment, the pension funding ramp actually codified borrowing against the pensions to pay for services, ballooning the unfunded liability from $17 billion in fiscal 1995 to around $54 billion in 2008—when the Great Recession hit and financial markets crashed.==
Comment by Formerly Known As... Tuesday, Nov 3, 15 @ 11:41 am
The critics don’t understand what a ramp is. Their complaint is that it is a ramp - payments began low, then built up. They are focused upon a foolish belief that there shouldn’t have been a ramp, but just a demand that no one needed to pay the pensions. They have forgotten their history. They have forgotten that it was passed with strong bipartisan support. They have forgotten that all the opinion makers favored it.
The critics are fools.
The Edgar ramp was not inflexible. It didn’t have to be ignored. It didn’t have to be small payments. It didn’t have to paid using the increments originally proposed.
What Edgar did was make pension payments a part of the budget - then everyone piled on the idea as a way to do those payments. Once Edgar’s term ended, the ramp was ignored.
Rauner’s supporters don’t believe in serving Illinoisans. They don’t believe in paying what they owe Illinoisans who served in government. They believe that public servants didn’t earn their pensions. They don’t like how they have fallen behind those who served in government, but still have to pay. The Rauner supporters believe that public servants should be just a little more respected than the people they serve - whom these same Rauner supporters don’t like either.
Every time you hear someone talking about taxpayers instead of citizens - they are really saying that citizens should not be served based upon their citizenship or rights as citizens. Every time you hear someone talking about running our open government like a closed business, they are stating that citizens shouldn’t be treated equally, but by what they are worth.
Edgar believed in serving Illinoisans. Rauner believes in serving taxpayers. Edgar is inclusive in his approach to government. Rauner is exclusive in his approach to government. It must bug the crap out of Edgar to try and explain to his students why we are seeing a governor who refuses to serve or govern all equally.
Comment by VanillaMan Tuesday, Nov 3, 15 @ 11:43 am
In other words, the plan would’ve worked if everything stayed perfect with the economy and nothing ever happened to weaken it for decades. Yeah, smart planning there.
Comment by Anonymous Tuesday, Nov 3, 15 @ 11:46 am
Well said, Me Too. Brief, and right to the point.
Comment by Big Joe Tuesday, Nov 3, 15 @ 11:47 am
Go back to Thompson and Jones in 89 with the compounded 3% They all benefited from that and still are!
Comment by highspeed Tuesday, Nov 3, 15 @ 11:48 am
“Except because the ramp was enshrined in law, they knew it was coming.”
Enshrined? Lol.
Notwithstanding the law (enshrined or otherwise) it was absolutely codified “kick the can down the road.” Period.
Edgar likes to offer advice but apparently doesn’t want to hear criticism? Sorry, it doesn’t work that way, Governor.
Comment by Georg Sande Tuesday, Nov 3, 15 @ 11:50 am
Well, we just came out of a terrible recession and that didn’t excuse us from having to sock a bunch of money into the systems.
Comment by Shupter Tuesday, Nov 3, 15 @ 11:55 am
The problem politically, psychologically and fiscally is that The Edgar Ramp not only kicked the can down the road, it declared the problem solved while kicking the can down the road.
When the budget was booming in 1997 - 2001, not one person suggested we should increase our payments to the pension system. No one questioned George Ryan’s enshrined pronouncement that 51% of all new revenues should go to education.
When the recession rolled around, it seemed like we were only skipping pension payments a little bity, because we were already skipping a lot.
Still, the criticism of the Edgar Ramp is a half truth.
The other half is that the Edgar Ramp was an alternative to the Netsch Plan. If Netsch had one and Illinois had enacted the Netsch Plan, we would would not be here today.
Now, we are facing a tax hike that makes the Netsch Plan seem fiscally conservative by comparison.
The Tribune should chew on that.
Comment by Juvenal Tuesday, Nov 3, 15 @ 12:05 pm
Under its funding schedule, the deficit is projected to continue to grow until topping out at $150 billion in 2031, before dropping to $35 billion in 2045, when the systems would be 90 percent funded.
2045 will be here before you know it.
Comment by Six Degrees of Separation Tuesday, Nov 3, 15 @ 12:07 pm
===“You had to stay disciplined,” said Edgar,===
In my lifetime, I have literally never seen a state or federal legislature or executive “stay disciplined,” especially not over the course of more than five years. Agencies, sure. But the guys who set the budget are not capable of staying the course and it’s madness to pass legislation that requires a legislature to act like anything other than unattended toddlers in a candy store. It has to be self-funding in a way they can’t mess with, or it has to be able to be shut down in instants when the legislature decides it’s tired of paying. You can’t set something up that’s going to require 20 or 30 years of OPTIONAL payments. There no market for legislatures who “stay the course.” You can’t sell that or make commercials about it.
Comment by Educated in the Suburbs Tuesday, Nov 3, 15 @ 12:08 pm
If Netsch had (won) and Illinois had enacted the Netsch Plan, we would would not be here today.
Assuming future gov’s and GA’s would have stuck to her plan better than they stuck to the Edgar ramp?
Comment by Six Degrees of Separation Tuesday, Nov 3, 15 @ 12:10 pm
So Edgar should be ignored because the Edgar ramp was too soft on contributions in the early years. But even these inadequate contributions were not made. We could have skipped larger scheduled contributions just as easily.
I am not hearing a loud call for a tax increase to fund the pensions.
Comment by Last Bull Moose Tuesday, Nov 3, 15 @ 12:18 pm
Ralph also explained that Illinois has the same $ problems as it did under Gov Edgar and Speaker Madigan. Pols have been passing the buck for decades, which is partially why the ==Edgar ski slope== ==passed with bipartisan support==.
==There were many moments, but two stand out. The first was when Gov. Jim Edgar signed into law the initial “pension funding ramp” in fiscal 1995. Back then, the aggregate unfunded liability across all five state pension systems was $17 billion. If decision-makers had opted to fund the systems to healthy levels over the next 30 years using sound actuarial practices and a level dollar payment schedule, they could have saved taxpayers hundreds of billions in principal and interest payments.
That would have required actually addressing the already long-standing structural imbalance between revenue growth and service cost growth. Even back then, the state’s poorly designed and antiquated revenue system couldn’t sustain existing service levels. And that created a real problem for politicians, since $9 out of $10 the state spends on services goes to education, health care, social services and public safety. So politicians chose to avoid undesirable service cuts and tax increases by simply writing $17 billion worth of IOUs to the pension systems.==
Comment by Formerly Known As... Tuesday, Nov 3, 15 @ 12:18 pm
===What Edgar did was make pension payments a part of the budget - then everyone piled on the idea as a way to do those payments. Once Edgar’s term ended, the ramp was ignored
Exactly. That the ramp was imperfect misses the point–it made the payments as a part of the budget and while we may have had to change the schedule in some way, it was a reasonable way forward. Simply, would you rather be in a situation where we made the ramp payments or not?
Comment by ArchPundit Tuesday, Nov 3, 15 @ 12:25 pm
==We just came out of recession. We couldn’t put a whole lot of money in that==
Did Edgar think there wouldn’t be another recession or two? In 1995, we were 5-6 years away from the next one.
Edgar setup a payment plan where his leadership would be required to spend less on pensions than all other governors following him. It was Can-Kicking 201, the class you take after passing CK101, which was not making payments at all. Any back-loaded plan essentially charges younger folks for services they never consumed. So his plan was immoral from the get-go.
Just think of all the accrued interest and gains if he front-loaded his plan. Of course, that would’ve meant fiscal restraint in 1995. No one was interested back then. Seems like no one is now either.
Comment by nixit71 Tuesday, Nov 3, 15 @ 12:25 pm
Edgar should have enacted a more generationally fair payment plan
Ryan should never have offered the Early Retirement
Blago should have made the payments
Also the legislature is responsible for all 3
Not to mention the regressive income tax at a relatively low level that doesn’t tax retirements, not sure who that falls on.
Comment by Name/Nickname/Anon Tuesday, Nov 3, 15 @ 12:35 pm
“We just came out of recession. We couldn’t put a whole lot of money in that — that down the road the payments were going to have to increase,” Edgar said. He added, “Everybody knew that and were on warning you have to prepare for that. Unfortunately, what happened was things I couldn’t control after I left office—
Illinois has been “Kicking the Can” for years-
Now it can not kick the can any longer (not nearly as easy). At some time there is going to be a reckoning - It is just starting.
These prior deals were never funded - all parties are error to think they ever could have been.
Fix the problem.
Comment by Cannon649 Tuesday, Nov 3, 15 @ 12:39 pm
==Once Edgar’s term ended the ramp was ignored==
If this isn’t Exhibit A for why we need term limits, then there is no evidence clearer on this earth to illustrate it!
Comment by DuPage Don Tuesday, Nov 3, 15 @ 12:41 pm
=== ==Once Edgar’s term ended the ramp was ignored==
If this isn’t Exhibit A for why we need term limits, then there is no evidence clearer on this earth to illustrate it!===
What is your point? Is there a point?
Comment by Oswego Willy Tuesday, Nov 3, 15 @ 12:42 pm
Rich -
The criticisms seem a little flat considering Rauner’s budget would have borrowed $3.3 billion from the pension system by skipping pension payments based on his cockamamie reading of the pension clause that thinks that the only promises you have to keep are the ones that you have already kept, not anything forward-looking.
A view that even the Tribune had to admit the courts would reject while Rauner dug a deeper hole.
Comment by Juvenal Tuesday, Nov 3, 15 @ 12:44 pm
Any back-loaded plan essentially charges younger folks for services they never consumed. So his plan was immoral from the get-go.
There are many things you pay for as a citizen that you do not directly benefit from. That is why there is a government. It pays for the things we all need to function as a citizen, even when we don’t directly benefit from it. Don’t live near a flooding river? You still pay for flood control and relief. Don’t attend the State Fair? You still pay for it.
The pension goes to the people who serve, and have served, all citizens within Illinois. If you moved here from another state - you still pay, even though you didn’t live here.
Honestly - quit thinking that you are shopping and selecting undies at JCPenney. You are a citizen, not a customer. Claiming it is immoral to pay government pensions because you don’t believe you “benefitted” from it is selfish.
You live in a free country - so you don’t want to pay for those who fought, died and left behind their families for us to support because you didn’t like the war they fought in?
Your logic is illogical - worse, it is immoral.
Comment by VanillaMan Tuesday, Nov 3, 15 @ 12:45 pm
=Not to mention the regressive income tax at a relatively low level that doesn’t tax retirements, not sure who that falls on.=
Voters. Anyone who taxed services and/or retirement would be punished at the voting booth as a “tax & spend” politician. Instead the voters get what they wanted the “spend” without the “tax”.
Comment by Qui Tam Tuesday, Nov 3, 15 @ 12:46 pm
More irrelevancy. What is this, nyah nyah? You were one too? That was yesterday and yesterday is gone. Is Edgar on target saying Rauner is goofing up? Yes he is. What Edgar, Thompson, Blago and whosit did yesterday is no excuse for what goes on today. And guess what kids? The Illinois Supreme Court has deliberately avoided the pension fund funding. Know why? It doesn’t matter, the Constitution says pay it…..and that means even if it comes out of the annual general revenue fund directly to pensioners. That is the ultimate legal reality.
Comment by ottawa otter Tuesday, Nov 3, 15 @ 12:56 pm
== VanillaMan ==
You miss the point entirely. A pension is not immoral. Socializing expenses is not immoral.
Our government has customarily worked by funding expenses based on whether they are long term or short term obligations. Short term obligations are paid by current taxpayers. Long term obligations are paid on a pro rata basis by taxpayers over a long period of time. When you create a benefit in one generation than have that benefit paid for primarily by a future generation, that is immoral.
During the Thompson years and then Edgar years, taxpayers did not pay their pro rata share, their taxes were artificially low, subsidized by the taxpayers of future generations.
Basically, Thompson and Edgar said: “we’ll enjoy things now and let our children and grandchildren make major compromises like defunded public education, lack of infrastructure investment and cripplingly high taxes.
Comment by Mekong Cafe Tuesday, Nov 3, 15 @ 12:59 pm
Sorry - but we have both kinds of music and they’re not mutually exclusive. Edgar is 100% right that Rauner is holding the budget hostage. And Edgar critics are 100% right that the Edgar ramp is a major contributing factor to the mess we’re in and it was, as someone above said, Can Kicking 201. Dawn warned us this would happen and she was 100% right. But those criticisms of Edgar are simply an attempt to deflect ownership of the current budget crisis and that ownership belongs squarely at the feet of one Bruce Rauner.
Comment by Chicago Cynic Tuesday, Nov 3, 15 @ 1:04 pm
- Chicago Cynic -
You’re on it. Your case is well made, but your point;
===But those criticisms of Edgar are simply an attempt to deflect ownership of the current budget crisis and that ownership belongs squarely at the feet of one Bruce Rauner.===
… is well said.
Comment by Oswego Willy Tuesday, Nov 3, 15 @ 1:07 pm
VanillaMan - I never said a pension was immoral. I said shifting the cost from those who consumed the resources to those that did not is immoral.
Pensions should have been funded up to 100% levels (not that bogus 80% rate that is floated out there as actuarially sufficient). The assumed discount rates used should have been lower than 7.5-8% that has been used for decades. Even retiree health insurance should have been prepaid. By doing all those things the proper way, it would have assured that the folks that consumed those services paid the true cost.
Better yet, the true cost of the total compensation package would have been there for all to see. Current staffing levels would have beenore heavily scrutinized and undoubtedly reduced. Probably would have had a slightly higher tax rate. Or somewhere in between.
Make no mistake. The current pension payment solution is very much immoral.
Comment by nixit71 Tuesday, Nov 3, 15 @ 1:32 pm
Basically, Thompson and Edgar said: “we’ll enjoy things now and let our children and grandchildren make major compromises like defunded public education, lack of infrastructure investment and cripplingly high taxes.
No one said anything like that, in private or in public. Claiming they did is just plain weird.
It seem to fit your conspiracy theory that governors thirty years ago somehow knew what the economy was going to do between their years in office and today.
Would you rather be overtaxed? If you are now demanding that governors plan recessions, then they ought to demand higher taxes expecting them, right?
No one had a crystal ball. No one wants to pay more than they need to. Finger pointing at governors from 30 years ago doesn’t make today’s problems easier to solve. Claiming that governors from 30 years ago didn’t tax enough - is crazy talk.
You know, basically.
Comment by VanillaMan Tuesday, Nov 3, 15 @ 1:34 pm
Make no mistake. The current pension payment solution is very much immoral.
The Illinois Supreme Court already heard your arguments and have ruled that your position is even more immoral.
Comment by VanillaMan Tuesday, Nov 3, 15 @ 1:41 pm
From Edgar’s transition report when he left office: ““The governor approved the most significant increase in pension benefits for state workers in a quarter century.”
Comment by Anonymous Tuesday, Nov 3, 15 @ 2:08 pm
From 1991 to 2001, the average starting pension for a career TRS educator (30-34 years) increased by approx. 102%, more than triple the increase in inflation over the same period.
Since 2001 the same starting teacher pension has increased slightly over 2% per year, or about the rate of inflation.
Count me among those who would say that Madigan, Edgar and Thompson are the three men most responsible for the current pension shortfall. That said, it’s entirely possible that some of the things Edgar is saying now about state government make sense.
Comment by Anon Tuesday, Nov 3, 15 @ 2:18 pm
VanillaMan - Yes, the ILSC also confirmed that each immorally spiked pension also be paid in pull. So you’ll forgive me if I take lessons on morality from another source.
Comment by nixit71 Tuesday, Nov 3, 15 @ 2:31 pm
@VanillaMan - Yes, the ILSC also confirmed that each immorally spiked pension also be paid in pull. So you’ll forgive me if I take lessons on morality from another source.
Comment by nixit71 Tuesday, Nov 3, 15 @ 2:33 pm
Under its funding schedule, the deficit is projected to continue to grow until topping out at $150 billion in 2031, before dropping to $35 billion in 2045, when the systems would be 90 percent funded.
2045 will be here before you know it.
And Speaker Madigan will still be in charge…..
Comment by BIG R. Ph. Tuesday, Nov 3, 15 @ 2:48 pm
So you’ll forgive me if I take lessons on morality from another source.
Whatever makes being a scofflaw comfortable for ya.
Comment by VanillaMan Tuesday, Nov 3, 15 @ 3:02 pm
If the Raunerites want to keep saying that a Republican Governor who endorsed their guy is really responsible for the budget problem, well, OK then.
Comment by Arsenal Tuesday, Nov 3, 15 @ 3:13 pm
==I said shifting the cost from those who consumed the resources to those that did not is immoral.==
Pretty much a textbook collective action problem.
Comment by Arsenal Tuesday, Nov 3, 15 @ 3:17 pm
Arf, Arf, they are all dogs!!
Comment by Barrystreet Tuesday, Nov 3, 15 @ 3:44 pm
==That the ramp was imperfect misses the point==
With respect, that is ==the point== imho. It was intentionally ==imperfect==.
Gov Edgar was able to ==avoid undesirable service cuts and tax increases== with a pension ==reform== that ==actually codified borrowing against the pensions to pay for services== while leaving future governors to handle the repercussions.
Decades later, as the ==real== ramp and payments begin, he is criticizing a successor dealing with budgetary aftermath of the can Gov Edgar kicked 20 years ago.
When a prior tenant leaves the gas on, then maintains he was ==helping== and criticizes your attempts to put out the house fire, it is natural to doubt his fire fighting wisdom as well as his advice to pursue what is ==doable==.
Comment by Formerly Known As... Tuesday, Nov 3, 15 @ 3:44 pm
===he is criticizing a successor dealing with budgetary aftermath ===
I think you completely missed the point of the criticism.
Comment by Rich Miller Tuesday, Nov 3, 15 @ 3:46 pm
-OW- If you have the same people at the helm for five decades running the state into the ground, term limits at least brings new blood and new insights into the mix……I know, why blame Madigan for this, You’ll say, but sometimes the answer is clear as the nose on your face! No interest in being a supporter of the surrender caucus at this point…..
Comment by DuPage Don Tuesday, Nov 3, 15 @ 3:59 pm
Geez, Raunerbots, check your flux capacitators and fire up tne DeLoreans. We’re going Back to tne Future, 1991!
Beats dealing with November, 2015, in some circles.
Because in November 2015, for the Fiscal Year that started July 1, you’re $6 billion short on what’s “funded,” and short about another $3 to $4 billion on core services that have been funded, but are now abandoned.
That’s a $10 billion short in just a few months.
Talk about a Turnaround!
Where did you get the idea that your victim complex for decisions made decades ago was a license for scatter-brained destruction today, in the name of “reform” and “doing things different?”
Comment by Wordslinger Tuesday, Nov 3, 15 @ 5:59 pm
I realize Edgar has been critical of Rauner in the media. but one year ago he endorsed, campaigned and served on Rauner’s transition team. he didn’t have to do that then, or give his advice now. to me Edgar is playing the elder statesman in a period of turmoil.
Rauner wanted him and his advice then, but not now? and when Edgar expresses his opinions now, its deemed unworthy, or that he was part of the problem decades in the making? if true then why was Edgar on the transition team? no one can be that sure of themselves that they have all the answers and everyone else is part of the problem. if I acted like that in my job I would be considered an obstructionist or even delusional.
I remember when Nixon offered his advice, mostly from behind the scenes, to Clinton on Russia and other foreign policy matters. The fall of the Soviet Union could have been much more frightening. Clinton took that guidance to heart and was grateful. And I’m sure 20 years earlier, Bill and Hilary both would have been delighted to see Nixon go to jail. Jim Edgar is not the problem, and what happened 20 years ago should not be used as a distraction from what is happening right now. I wish Rauner would be more grateful that others are coming forward to provide some guidance.
Comment by Poolguy Tuesday, Nov 3, 15 @ 7:07 pm
Still a lot of Edgar envy on here, huh? So many false “facts” it’s hard to keep track. For example, the ramp didn’t last “decades, it lasted 15 years. People didn’t ignore the ramp when Edgar’s term ended.: George Ryan’s budgets paid every cent due under the original statute. The discount rate, while objected to by a certain segment of economists, wasn’t too high based on actual performance, since the systems average annual rate of return exceeds them and has as far back as I’ve bothered to look, which is much more than 20 years. Also, I haven’t heard any outwelling of support from anyone for the notion that an 80% funding level is insufficient for a state government pension plan. And on and on. I never know whether we’re dealing with the “big lie” or the big ignorance.
In retrospect I see two significant shortcomings in the law. It didn’t make allowance for some sort of safety valve for times when state revenue fell significantly from year to year, and for multiple occurrences of that over short periods of time. I don’t really find that very surprising since it had not ever happened a single time in the state’s modern history. The other was somewhat more predictable. The funding formula called for estimates and certifications from the systems of the contribution necessary to keep the funding plan on schedule. When investment earnings overperformed the formula resulted in reduced state contributions which resulted in very large, much larger than anticipated, state contributions being required when earnings from assets declined.
Comment by steve schnorf Tuesday, Nov 3, 15 @ 8:17 pm
A few days late, but haunting the comments with the ghosts of admins past just the same. Dr. Mark DePue and I are at work on an oral history of the Thompson administration for the Abraham Lincoln Presidential Library, and some of you might be interested in my interview with Dr. Bob Mandeville.
Two themes to start with: learning how to govern (pp. 33-34 and 137 of the PDF), and Mandeville on pensions (pp. 238-244)
Direct link to the transcript: http://www.illinois.gov/alplm/library/collections/oralhistory/illinoisstatecraft/Thompson/Documents/Mandeville_Rob/Mandeville_Rob_4FNL_RED.pdf
Comment by Mike Czaplicki Tuesday, Nov 3, 15 @ 9:38 pm
If you really have to blame someone for the current pension funding mess(i.e. since 1970), there are at least groups of people who set this all in motion … and their names are NOT Thompson, Edgar, Ryan, Blago or Quinn … although all of them have some degree of responsibility for making it worse.
The REAL guilty parties are:
1) The delegates to the 1970 Constitutional Convention. They thought the Pension Clause, as worded, would ensure the General Assembly would be required to properly fund the pension systems on an annual basis once the clause was in place.
2) The General Assembly and Gov Walker who managed, between the 1970 Income Tax implementation and the FY75 budget proposal, to reach the point of spending more than was coming in in revenue, creating a structural deficit. Their solution was to short the pension funding for the 1975 Fiscal Year.
3) The Illinois Supreme Court, who found in IFT v Lindberg, that the Pension Clause only applied to the resulting benefits, not the funding itself. The General Assembly could choose to FUND the pension systems in any manner the GA deemed proper. The court also found that the actual pension benefits (the pensions themselves) had to be paid when due … so the Con-Con delegates were 1/2 right about the pension clause.
Everything since has just been a sequel to those three actions.
Comment by RNUG Tuesday, Nov 3, 15 @ 11:00 pm
Now specifically to the issue of the Edgar criticism of Rauner and the reverse …
Politics is the art of the doable, not the ideal. It requires compromises to get things done. The Ramp was one of those compromises. Lousy math but politically feasible … and it made the pension costs part of the budget.
Edgar knew what was politically possible and got it done. It wasn’t perfect (far from from it but better than nothing.
Rauner hasn’t yet figured out the possible from the impossible, politically speaking. He’s still in “order” mode, and until that changes, nothing will happen.
Comment by RNUG Tuesday, Nov 3, 15 @ 11:09 pm
Edgar should go back in his hole ..It was Edgar who gave Daley free Pass not to put more money in Pensions in late 90s .. Daley went ahead , wasted the money ..Now tax Payers on the hook.. Go just shutup loser Edgar
Comment by better days Tuesday, Nov 3, 15 @ 11:47 pm
Amazing that all the Edgar criticism about his ‘ramp’ is supposed to negate his clear, sound advice to deal with the budget and stop the increasing damage to IL citizens.
Comment by sal-says Wednesday, Nov 4, 15 @ 7:46 am