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* From a Thursday press release…
Providing Illinois social services with critical funding, and utilizing proposals currently available to fund higher education, were part of a proposal introduced today by Senate Republican Leader Christine Radogno (R-Lemont) and House Republican Leader Jim Durkin (R-Western Springs), both of whom called on Democrat leaders to stop playing games and begin working in a bipartisan manner to achieve results for residents of Illinois.
“Today, we are introducing legislation that will fund our most critical social services,” said Leader Radogno (R-Lemont). “The social safety net in Illinois is at a breaking point and we need to stop playing games and bring everyone together to demonstrate to Illinois taxpayers that we can put partisanship aside and do what is right for the most vulnerable in our state.”
The proposal introduced by Leaders Radogno and Durkin would fund Illinois’ most critical social services. The proposal, contains $433 million of General Revenue Funds (GRF) and $858 million of Other State Funds, which totals nearly $1.3 billion.
Senate Bill 3418 would support:
• Seniors in the Community Care Program;
• Veterans;
• Those with mental health issues and developmental disabilities;
• Homeless youth, homeless vets and homelessness prevention in general;
• Programs like Adult Redeploy that that are critical to our criminal justice reform efforts;
• Addiction treatment, sexual assault services and prevention; and
• The Special OlympicsThe Republican Leaders also reaffirmed their support for funding higher education, and noted there are a range of options available to secure funding, such as using procurement reform savings, using excess special funds, and giving the Governor authority to move money around. Unfortunately, notes Leader Durkin, there’s been zero consideration on these ideas from the Speaker. In fact, as Chicago State University prepares to close their doors, Democrat leaders won’t even come to a meeting to discuss bipartisan proposals to fix the problem.
“House Republicans are very concerned about funding for higher education, and we’ve tried to jumpstart that conversation by introducing new ideas on how to generate taxpayer savings to show taxpayers that we’re pursuing a way to pay for things,” said Leader Durkin. “There are a range of options out there we should be exploring, and we owe it to the people, and students, of Illinois to have an open and bipartisan dialogue. The time to act is now.”
Both Radogno and Durkin believe that comprehensive pension reform can generate enormous taxpayer savings. Governor Rauner has put forward a number of immediate changes to the pension systems that would generate hundreds of millions of dollars in savings for Fiscal Year 2017 – changes that are not subject to court challenge – savings that can be banked immediately. These are items like dealing with salary spiking and capping pension subsidies for salaries over $180,000 – and stabilizing the actuarial projections.
However, Illinois needs more than that.
“We need structural change for the long-term, and as the Governor has said, we’re just waiting for President Cullerton to submit his consideration plan,” said Radogno. “Together, some of the immediate changes from the Governor’s budget and the long-term changes from the Senate President can pay for this bill and – more importantly – fund a robust social safety net for years to come.”
Both Republican Leaders echoed the Governor’s call for a full leaders’ meeting, and are encouraging the Democrat Leaders in both the House and Senate to attend.
* Finke…
Rauner has criticized spending bills passed by Democrats because they do not come attached with cash to cover the costs. Radogno said the Republican plan will be covered by enacting pension changes sought by the administration that will provide the money to cover the human-services spending.
Rauner has proposed requiring public schools and universities to cover the pension costs for salaries they pay above $180,000 a year, the salary authorized for the governor in Illinois. Rauner also wants to implement a plan that would phase in changes to state contributions caused, for example, when the pension systems cut the rate of return they expect to receive on their investments.
Overall, the administration thinks the changes will save $780 million a year. […]
“I think we would continue to note that the idea of spending pension savings before the bill has passed, let alone gone through any court review, probably isn’t wise,” [Senate President John Cullerton’s spokesman John Patterson] said.
OK, but the approp bill passed by the Senate Democrats wasn’t exactly fully funded either. Far from it, in fact.
posted by Rich Miller
Friday, Apr 8, 16 @ 10:19 am
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So still no funding for higher education. What a sorry state we live in.
Comment by Higher Ed Friday, Apr 8, 16 @ 10:21 am
People have been speculating for years about a pension cost shift to school districts and colleges/universities so it isn’t surprising to see Rauner propose it. In fact, to only require it for the larger salaries actually seems to appear more fair than what one may expect out of Rauner.
Comment by Anonymous Friday, Apr 8, 16 @ 10:23 am
Money for Adult Redeploy cannot come soon enough. It’s an evidence-based proven program. It works. And it’s crumbling under the weight of the budget impasse.
Comment by Politix Friday, Apr 8, 16 @ 10:24 am
“Pension reform savings” and “procurement reform savings” are just cover for the sweeps.
Sweeps you could have done last May. But does this mean the “necessary shakeout” is over?
Comment by Anonymous Friday, Apr 8, 16 @ 10:26 am
“The social safety net in Illinois is at a breaking point and we need to stop playing games and bring everyone together to demonstrate to … that we can put partisanship aside and do what is right for the most vulnerable in our state.”
Says the social worker.
Why wasn’t Senator Radogno making these same comments a year ago? Why has Ms Radogno suddenly found religion to save the social safety net? Has 1.4% given Madam Senator permission to speak heresy?
Comment by Anonymous Friday, Apr 8, 16 @ 10:29 am
If salaries above $180k are shifted, could that DETER school boards from OFFERING public pensions that are that RIDICULOUS?
I like the idea of this from the deterrent angle.
Comment by cdog Friday, Apr 8, 16 @ 10:29 am
===…both of whom called on Democrat leaders to…===
Oh, that’s fun.
That’ll get 60 and 30.
Be better, or phone it in with some real snark.
…
Comment by Oswego Willy Friday, Apr 8, 16 @ 10:29 am
So they don’t want to craft a budget, but they want to offer spending on specific social services.
It’s like saying, hey, let’s play basketball, but I only want to shoot and I don’t want to have to run or play defense. Those are too hard.
Do your jobs! Govern the whole state!
Comment by Blue Bayou Friday, Apr 8, 16 @ 10:30 am
sorry, 10:26 was me.
Comment by wordslinger Friday, Apr 8, 16 @ 10:32 am
The pension cost shift to school districts and Universities will be a hard vote.
Shifts to school districts will be viewed as a reason for property tax increase to cover the cost shift.
With University cost shift the only way to pay for it is by raising tuition.
So politically if they vote for those cost shifts they are going to get wacked for raising property taxes and tuition.
In practical terms, there is no savings, someone is going to pay?
Comment by Are Ya Kiddin' Me? Friday, Apr 8, 16 @ 10:33 am
The state is bleeding to death and yet another band-aid.
Comment by pool boy Friday, Apr 8, 16 @ 10:33 am
The cost shift portions of the bill will likely have very little savings attached to it, since few employees get paid that much and since we’re only talking normal cost. The real savings are in the “accounting changes” which is simply a nice way to say backload the payments further and kick the can down the road.
How many more billions of dollars will that cost us in the long run?
And not being a state employee, this doesn’t directly impact me, but why not appropriate something for group health insurance? We have 9 months of liability for this fiscal year, plus the billion dollar backlog that existed before the impasse. This is racking up enormous amount of interest costs that are going to be paid, and no matter what happens with the AFSCME contract, any liability that already exists is owed.
Comment by Juice Friday, Apr 8, 16 @ 10:35 am
You can talk all you want about structural change in the dam but that doesn’t do any good when the dam is mostly gone and the waters are scouring our state of life. We are at the early stages of the waters pouring forth. They haven’t gotten that far yet. You just cannot do what they have done to the businesses who contracted with the state and not have catastrophic consequences for jobs (jobs equal survival) and economic viability. It is only because the media, for the most part, is controlled by Rauner that the waters are not being seen or the damage already done is known to those downstream. We are all downstream. Every person in this state will feel it. When the Labor war begins with the declaration of impasse, the damage and the pain will be visible and real to a lot more people. Lisa Madigan will take down the court order for pay and all will suffer. The attempt by Raunerites to look reasonable is just a shoring up maneuver with the base before the Great Labor War of the 21rst Century begins. Rauner has never had any intention to govern. Bringing about the final battle has been his intention all along.
Comment by Honeybear Friday, Apr 8, 16 @ 10:37 am
@cdog If you want a medical school, it’s going to be hard to keep salaries under $180K. The same is true, to a somewhat lesser extent, of a law school. I’d be happy to see doctors and lawyers paid less in general, but as things are the competitive pressures will keep their salaries high.
Comment by UIC Guy Friday, Apr 8, 16 @ 10:38 am
== If salaries above $180k are shifted, could that DETER school boards from OFFERING public pensions that are that RIDICULOUS? ==
The school boards and universities don’t make up the formula. The pensions are calculated from a formula set by the state that basically takes service time and final average compensation. The only part of the formula the schools have control over is the salary.
Admittedly, this will stop some schools from offering ridiculous salaries but the fact of the matter is the only people getting these kinds of salaries are the top school administrators and the coaches.
Like -AA- commented last night or early this morning on another thread, I don’t see how they are coming up with the savings numbers they are claiming.
Comment by RNUG Friday, Apr 8, 16 @ 10:43 am
I definitely understand that a medical school professor is going to be a high-priced employee.
I must insist, however, that if one is making a salary north of $180k, over years, they probably have a retirement mix that will keep them out of Honeybear’s lobby.
This is on the right track. The medical school prof is not going to encounter much damage. I am for reasonable caps in many arenas that hold harmless those in the system now.
Comment by cdog Friday, Apr 8, 16 @ 10:46 am
Funny how these cost shifts of pensions get new adherents from time to time. The Speaker was in favor of shifting pension costs to school districts, community colleges and universities a few years ago. The opposition, from many Repubs at the time as well as some Dems, was the spectre of higher property taxes. The community colleges even had worked out a schedule of cost shifting over a 4 or 5 year period. But it was the local hit on K-12 districts that caused, and likely will cause, the greatest blowback. For public universities, as stated above, it is only taking state dollars used for education per se and applying them to pension payments, which would leave tuition as the most likely place to raise the difference.
Perhaps this shift may be more likely if there really is bipartisan “tough votes.”
Recycled policy proposals, when recycled by the other party, may have legs. But both parties will have to be willing to share credit/blame equally.
Comment by My New Handle Friday, Apr 8, 16 @ 10:54 am
Rich, if a deal is percolating, and I personally wonder if one really is, AFSCME needs the Dem leaders to make a liveable contract part of the deal. I don’t think they can be protected from salary freezes and increased insurance contributions, but maybe the numbers could be a little less painful.
The suggestion is problematic, because it would make any negotiations and reaching a deal much more difficult and lengthy. But if the union is to survive the situation they’re in, they need a lifeline. Even with help from the Ds, they’re still going to take a terrible beating, I think.
Comment by steve schnorf Friday, Apr 8, 16 @ 10:54 am
This funding structure so transcends the smoke and mirrors gimmicks much decried by the so-called reformers that we’ll have to call it Raunernomics. I can see state employees with green eyeshades toiling over their books figuring out how to pay FY 16 bills with FY 18 pension savings. Contracts to providers will now include the clause, “subject to procurement savings in the next two fiscal years.”
Sigh.
Comment by Norseman Friday, Apr 8, 16 @ 10:54 am
Anonymous @ 10:23
Madigan has also been talking about shifting pension costs back to the locals too. That’s what “making state taxpayers pay for benefits they have no control over” means - as Steve Brown put it earlier this week.
So it’s interesting to see this particular Rauner idea.
How much would it save the state? I do believe it would have a vast deterrent against this heinous practice, since the whole reason it’s done is because locals don’t have to pay for it.
RNUG, I don’t think you’re informed about the problem. The idea that “the only things locals have control of is the salary” is true, but ridiculous. It’s like saying “the only thing the hackers have control of is what they buy with my credit card.”
The final average is a 4-year average. A 2-year bump of $100,000/year costs the locals $200,000 and costs the pension fund (for an administrator who previously taught and has 30 years) $37,500/year for the life of the administrator, plus COLAs. In the first 5 years, it costs the pension fund more than it cost the locals. Actuarially it averages $600,000 in inflation-adjusted dollars.
That’s pretty big leverage, a huge incentive to help a friend at little cost to yourself, a huge mismatch between who gets the benefits and who pays.
Comment by some doofus Friday, Apr 8, 16 @ 10:56 am
Further, AFSCME, SEIU and the teacher’s unions will recognize the value of the Rauner proposal to cap state funding of pensions over $180,000, because those are the scandal stories that have been killing public support for the pension system. It’s the sweetheart deals that leave a sour taste.
At least the rank and file of those unions will get it. Some of the higher ups may be the sorts who have friends who get those sweetheart pension deals.
Comment by some doofus Friday, Apr 8, 16 @ 11:00 am
Fund sweeps! I’m for ‘em. If the money is sitting there and folks need it, spend it. Why do our state political masters persist in putting large sums of money aside and pretending it’s not there in the middle of what we are told is a huge fiscal crisis. They are as bad as Mayor Rahm (and Mayor Daley before him) and their monster TIF, which continues to gobbble up money despite myriad failing Chicago public schools.
Comment by Cassandra Friday, Apr 8, 16 @ 11:01 am
If a $180,000-plus school employee is mid contract and the Republicans pass a law to shift the pension responsibility, that’ll create a fun contract law showdown in the courts.
Usually when this situation plays out, everyone mid contract is grandfathered in and it starts up with all new contracts. For instance, that’s what happened when the state changed the law to limit end of career spiking to 6 percent.
But I get the sense that legality and constitutionality weren’t the major selling points behind the idea for this press conference policy.
Comment by Michelle Flaherty Friday, Apr 8, 16 @ 11:04 am
That imaginary cash that Republicans are proposing is a great idea. Did Rauner’s imaginary friends propose that during an imaginary meeting? Did Bruce watch one too many episodes of “Mr. Roger’s Neighborhood?”
Comment by A Jack Friday, Apr 8, 16 @ 11:07 am
Pension reform savings? lol
These initiatives are little more than PR, to demonstrate to the hoi polloi that the Republicans are doing something (as opposed to being the party of “No!” Most will see through their charade.
Comment by bwana63 Friday, Apr 8, 16 @ 11:08 am
Almost spit out my coffee laughing hysterically at Christine and Jim’s comment about bipartisanship!
They need to talk to Imaginary Illinois CEO Bruce. He is the one who spent 50 mil on shaken’ up Springfield but never bothering to explain it.
Does every Republican now sound like their de fact leader?
Comment by Jack Stephens Friday, Apr 8, 16 @ 11:11 am
===That imaginary cash that Republicans are proposing===
As opposed to ____ from the Democrats?
Comment by Rich Miller Friday, Apr 8, 16 @ 11:11 am
What’s do great about the community Rich built here is commenters like - RNUG -, - AA -, and - Norseman -, and - steve schnorf - chiming in just at the right time to keep the discussion rolling.
To the Post,
For me it’s pretty “simple”, given the comments as my guide…
The actual numbers are not substantiated, and with that, how can the Raunerite proposal, as described by the GOP leaders, make the DemocratIC proposal seem… different.
They aren’t in funding it in actual dollars(?)
I’m not seeing it…
Comment by Oswego Willy Friday, Apr 8, 16 @ 11:16 am
If the Democrats propose to pay for something through a tax increase, it is just going to be another game of “Gotcha.”
But imaginary cash is worse than no cash because imaginary cash lulls the taxpayer into a false sense of security. But when that imaginary cash does not materialize we are going to see the mother of all tax increases to pay for it. So let’s come up with real funding sources, not imaginary ones.
Comment by A Jack Friday, Apr 8, 16 @ 11:33 am
The Dems should pass the GOP bills. Then pass the pension bills.
What comes next, who knows. But this is the biggest step towards compromise the Republicans have made and the Dems should take it for the sake of the people who rely on these human services agencies.
Comment by siriusly Friday, Apr 8, 16 @ 11:35 am
cdog: the damage is not to the doctors and lawyers but to the institutions (Med School at UIC, Law School at UIUC). The pensions will be paid: the question is who pays for them. (If the university were to try limiting pay, it would lose faculty–at least those competent enough to have options–very quickly.)
Comment by UIC Guy Friday, Apr 8, 16 @ 11:39 am
All this chaos by not keeping the income tax rate at 5%. Now we can look forward to higher property taxes AND the income tax rate going back up. Also, much of the damage Rauner has caused at state universities, community colleges, and social services are irreversible. Many good people, there for decades, have left and found other employment and WON’T be back.
Comment by DuPage Friday, Apr 8, 16 @ 11:49 am
Good thing the House took a whole month off and cancelled session today. Not as if there is any work to be done, or the rank and file couldn’t make some progress on a few of Illinois’ pressing issues.
Comment by No Use For A Name Friday, Apr 8, 16 @ 12:03 pm
“The social safety net in Illinois is at a breaking point and we need to stop playing games and bring everyone together to demonstrate to Illinois taxpayers that we can put partisanship aside and do what is right for the most vulnerable in our state.”
This is a quick about face from Radogno. Their starve-the-beast “game” not working for them anymore? I hope both sides can come together and work something out, but it would help if Rauner and his Republicans stop insulting the other side while demanding they cooperate in negotiations.
Comment by Wensicia Friday, Apr 8, 16 @ 12:09 pm
A couple points-
Some doofus, good choice of nickname. Your hypothetical example is completely fact-free. A school board that would grant a 2-year, $100k raise is on the hook for much more than the cash value of the raise. Specifically, the actuarial cost of the amounts of that raise that exceed more than 6%, or CPI, in a school year. That amount could exceed six figures for a younger Tier 1 retiree.
-The potential big money here, as others have noted, is in smoothing the impact of changes to actuarial assumptions. Unfortunately, these changes don’t happen frequently. (usually on 5-year cycles) and many aren’t material. It’s likely that this comes in response to the fairly recent downward revision in the assumed investment rates of return for all the systems, which added over $10 billion to the unfunded. Under this proposal, that impact doesn’t go away, it is just spread over multiple years. Is that saving money?
Comment by Arthur Andersen Friday, Apr 8, 16 @ 12:12 pm
Both Radogno and Durkin believe that comprehensive pension reform can generate enormous taxpayer savings. Good luck on that consideration model..
Comment by Foster brooks Friday, Apr 8, 16 @ 12:14 pm
This GOP pension savings(?) Is your typical tax on the poor and middle claSs. Shift these costs to the local school districts and jucos amd they will be forced to raise property taxes. The ultimate tax on those who can least afford it. Bravo, now were getting somewhere.
Comment by blue dog dem Friday, Apr 8, 16 @ 12:41 pm
This is obviously a CYA proposal designed to show something (anything) and to be able to continue to blame Madigan for the impasse.
Surely, GOP House and Senate lawyers (Durkin is a lawyer himself) cannot buy into such an unconstitutional bill.
So, it’s just politics, silly.
Comment by Austin Blvd Friday, Apr 8, 16 @ 12:55 pm
@AA, RNUG- If I read this correctly, pensionable cost for the salary in excess is what will be shifted to the employer under the proposal. Meaning the amount up to $180,000 in pensionable salary will remain as is? Is that how you read it?
If that is the case, the savings will be pretty small, particularly on an annual basis. I doubt they ran any numbers and, given that they pegged this to another positions salary, I would bet that this has purely political motivations.
As AA stated the smoothing probably does not save any real money, just spreads out the payment. That makes the $780 million just more magic beans from the Governor who was supposed to be honest and transparent.
Comment by JS Mill Friday, Apr 8, 16 @ 12:57 pm
- JS Mill -
Yes, that’s how I read it.
Comment by RNUG Friday, Apr 8, 16 @ 1:01 pm
cdog @ 10:29am: If salaries above $180k are shifted, could that DETER school boards from OFFERING public pensions that are that RIDICULOUS?
I like the idea of this from the deterrent angle.
totally agree.
Comment by capitol fax follower Friday, Apr 8, 16 @ 1:11 pm
Cap fax follower. I wish, but in order to recruit the best talent for our youth we must be competetive. If we are going to have the best high school football,basketball coaches in the country we need to pay accordingly….
Comment by blue dog dem Friday, Apr 8, 16 @ 1:27 pm
While reading this I was awaiting the inevitable poison pill attached. Unfortunately I didn’t wait in vain:
However, Illinois needs more than that.
“We need structural change for the long-term, and as the Governor has said, we’re just waiting for President Cullerton to submit his consideration plan,” said Radogno. “Together, some of the immediate changes from the Governor’s budget and the long-term changes from the Senate President can pay for this bill and – more importantly – fund a robust social safety net for years to come.”
When will the GOP GA realize that the Dems will NEVER give in to these structural “reforms”?
Comment by DHSJim Friday, Apr 8, 16 @ 1:36 pm
From Steve Schnorf’s comment:
But if the union is to survive the situation they’re in, they need a lifeline. Even with help from the Ds, they’re still going to take a terrible beating, I think.
That lifeline is maintaining restrictions on privatization with a slight increase in healthcare costs. Nothing more. Certainly nothing less.
Comment by DHSJim Friday, Apr 8, 16 @ 1:45 pm
===“We need structural change for the long-term, and as the Governor has said, we’re just waiting for President Cullerton to submit his consideration plan,” said Radogno. ===
For all practical purposes, Cullerton’s ideas of consideration have already been ruled unconstitutional by ISSC. Pension “reform” (savings) and “diminishment” are basically synonyms.
Comment by forwhatitsworth Friday, Apr 8, 16 @ 2:36 pm
What makes them think state workers will agree to take their new pension reform plan? They will have to seek approval from the workers in order to make the pension changes. Counting revenue that isn’t there is like eating a cracker and calling it a steak! What do you think RNUG?
Comment by Mama Friday, Apr 8, 16 @ 3:02 pm
The plan has two parts.
The part shifting partial pension liability for $180K+ pensions will save a few bucks but it’s probably going to be less than a rounding error in the debt.
The latest Cullerton consideration plan we haven’t seen yet but if it is anywhere close to what is being reported, the savings from it plus a dime tossed into the GRF mean you’ll have another dime to spend. At least they aren’t counting any savings from it right now.
Comment by RNUG Friday, Apr 8, 16 @ 3:08 pm
As stated by several above, to shift the amounts-over-$180K-salary-pension-benefit back to the local boards and districts is most likely a very small amount compared to the entire state pension problem.
Regardless, the potential for a deterring effect has to be respected. Pour the curb.
(UICguy, pay the experts more, just pick up the over $180K part of the pension. Maybe the alumni/boosters would volunteer? It’s not that much money?)
(blue dog dem, I cannot justify in my mind paying a high school coach that kind of money. I find that obscene and misguided when reconciled to the other ways that money can be spent to affect the kids in that district. Having watched the vicious political games that go with high school sports, I am not in favor of worrying about this. Most of the time we are in agreement, but not on this.
Comment by cdog Friday, Apr 8, 16 @ 3:47 pm
PreK-12 plus colleges and universities have no money to pay for teachers pensions. Local schools would have to raise taxes - good luck with getting people to vote for a tax increase. If higher education raises tuition the state MAP Grants will cost the state more money. Right?
Comment by Mama Friday, Apr 8, 16 @ 3:58 pm
SB3418 uses this language in every Article and every Section, “The following named amounts, or so much thereof as may be necessary, …”
Kind of seems like permission would be being given for Rauner to take even more than the dollar amounts listed.
Probably SOP, but interesting.
Comment by cdog Friday, Apr 8, 16 @ 4:18 pm
===but interesting===
Standard language.
Comment by Rich Miller Friday, Apr 8, 16 @ 4:23 pm
Am I the only one who finds it hilarious that Team Rauner is proposing another ramp plan?
I am not saying that ramping up payments is a bad idea.
But Governor Rauner, Leader Durkin, Representative Sandack, and the IPI have all blamed Governor Edgar and the Edgar Ramp for our state’s pension hole.
Now their plan to reform the pension system is the Rauner Ramp?
Amanda, Rich, Scott Reeder: am I missing something here?
Comment by Juvenal Friday, Apr 8, 16 @ 4:40 pm