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Rauner admin contradicted on revenue estimate claim

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Illinois

* From the Illinois Policy Institute’s former news service…

House Speaker Michael Madigan’s office said all Democrats remain hopeful a balanced budget agreement can be reached by the end of the month.

Senate President John Cullerton’s office said with everyone participating, that goal should be attainable.

A spokeswoman for the governor said late Monday that bugeteers are meeting, but said progress hasn’t been “as fast as we would like.”

“[T]hey’re even stalling on establishing the revenue estimates,” Rauner spokeswoman Rachel Bold said in an email. “How can they put together their budget if they won’t agree to what revenues are available? We hope Democrats aren’t delaying to set the stage for yet another tax increase. In February, the Governor presented what the people of Illinois need – a full year, balanced budget that paves the way for a surplus that would allow us to begin to pay down the bill backlog.”

Aside from the fact that the governor didn’t propose a truly balanced budget, if you scroll all the way down, you’ll see that Madigan spokesman Steve Brown posted a comment via Facebook.

I talked with Brown and he said the governor’s spokesperson “may want to check with the budget director.” According to Brown, the governor’s budget director currently “wants to focus on a supplemental appropriation” to address “over-spending” during the impasse and not the revenue estimate for next fiscal year.

* Back to the budget talks…

State Sen. Dale Righter, R-Mattoon, said if Democrats don’t go with Rauner’s proposals like the pension cost shift “then our expectation is, and it should be everyone’s expectation, that they’re going to come back with an offset that keeps the budget in balance.”

That’s just one reason why the budget isn’t actually balanced. That cost shift is something like $700 million.

posted by Rich Miller
Wednesday, May 2, 18 @ 12:30 pm

Comments

===State Sen. Dale Righter, R-Mattoon, said if Democrats don’t go with Rauner’s proposals like the pension cost shift “then our expectation is, and it should be everyone’s expectation, that they’re going to come back with an offset that keeps the budget in balance.”===

Senator…

===GOP Rep. Dave McSweeney’s HR27 declares “the opinion of the Illinois House of Representatives that the proposed educational pension cost shift from the State of Illinois to local school districts, community colleges, and institutions of higher education is financially wrong.” It now has 60 sponsors and co-sponsors…===

What else?

Comment by Oswego Willy Wednesday, May 2, 18 @ 12:47 pm
–“[T]hey’re even stalling on establishing the revenue estimates,” Rauner spokeswoman Rachel Bold said in an email. “How can they put together their budget if they won’t agree to what revenues are available? –

You’re in agreement already on revenue estimates. If you truly can’t see that, you are very sadly, very thick.

–the GOGFA and GOMB estimates are nearly identical - less than 0.3 percent apart.–

Sad way to make a living, Rachel, with the obvious lying. On the taxpayer dime, to boot.

https://capitolfax.com/2018/04/27/hey-everybody-stop-the-games-and-get-to-work/

Comment by wordslinger Wednesday, May 2, 18 @ 12:59 pm
In no particular order:

1. The governor’s budget proposes $550 million in additional school aid but slashes $700 million in teacher retirement funding. Bruce Rauner is proposing a net cut of $150 million for education. That was DOA.

2. The time to negotiate $700 million in pension pick up costs was when a new tax hike was being discussed to balance the budget. Leader Brady, Leader Durkin, and Governor Rauner chose not to be productive members of that discussion.

3. Despite that, Governor Rauner had a second bite at the apple when he vetoed the education funding overhall, and instead of making overhauling pension payments his top priority, he went with…tax breaks for rich people.

You could let go all of your top advisors, and just check in periodically on Capitolfax for legislative advice, and you would be better off, Governor Rauner.

Comment by Thomas Paine Wednesday, May 2, 18 @ 1:01 pm
It’s May 2nd.

The ILGA should “cut to the chase”.

Rauner signing a budget requiring the 32% tax increase to balance it, then himself owning that the tax increase was required for his FIRST full fiscal year budget that bares his signature… that would undercut the entire Rauner campaign, and a smart and savvy campaign with unlimited monies could make a serious case that Rauner’s signature endorsed that tax increase, using it to sign a budget Rauner himself would call balanced.

So…

Get 71 and 36.

Use the revenue numbers that are… 0.3 percent apart… and work in a bipartisan way (71 and 36 will all but guarantee that bipartisan outcome, “because math”) and let Rauner have his vetoed budget, and the distinction of never, ever signing a full fiscal year budget… as TWO full General Assemblies convened.

Override. Summer. Campaigns. “November”.

Sen. Righter, thank you for getting last fiscal year’s budget done with your votes. Save Illinois from Rauner, yet again. Please. For EIU…

Comment by Oswego Willy Wednesday, May 2, 18 @ 1:07 pm
The cost shift would be painless for school districts if they simply required teachers to pay for their part of their pension. What private sector employee has his Social Security tax paid for by his employer?

Comment by John 56 Wednesday, May 2, 18 @ 1:40 pm
@- John 56 - Wednesday, May 2, 18 @ 1:40 pm:

===The cost shift would be painless for school districts if they simply required teachers to pay for their part of their pension. What private sector employee has his Social Security tax paid for by his employer?===

Teachers already pay 8% of their salary into the TRS every paycheck. What private sector employee pays both his half of social security and then also pays the employers half?

Comment by DuPage Wednesday, May 2, 18 @ 1:48 pm
=That cost shift is something like $700 million.=

The total cost of pension debt is north of $7.0 billion (the number changes annually), the $700 million figure is only for TRS (the largest system) and is indicative of why there is no need for additional change to pensions. Tier 2 brought annual pension costs (to be covered by cost shift) down by $500 million per year to about $1.5 billion. A large number but sustainable. The remaining $5.5 billion in “pension” payments is for debt, which again is solely on the OLGA past and present along with governors past and present.

Deal with the debt by paying it. Take out the debt there would be no state fiscal crisis.

=The cost shift would be painless for school districts if they simply required teachers to pay for their part of their pension. What private sector employee has his Social Security tax paid for by his employer?=

You must be new to the business world. There is an employer share to SSI. But don’t let facts get in the way of a good rant right?

And teachers do pay into TRS. Every paycheck.

Comment by JS Mill Wednesday, May 2, 18 @ 1:49 pm
“Teachers already pay 8% of their salary into the TRS every paycheck. What private sector employee pays both his half of social security and then also pays the employers half?”
Thank you DuPage–except I’m pretty sure it’s 10%….

Comment by ajjacksson Wednesday, May 2, 18 @ 2:07 pm
John 56 == What private sector employee has his Social Security tax paid for by his employer? ==

It happens often enough that the IRS publication for employers’ withholding actually has a section entitled “Employee’s Portion of Taxes Paid by
Employer” that tells them how to compute the employee’s total wages and tax in this situation, since payment of the tax on behalf of the employee is included in taxable wages.

Anyway, your proposal simply translates to “balance the state budget by cutting teacher pay.” Even if you think that is fair, try to remember that you only get what you pay for and this state is having problems hiring and retaining teachers as it is.

Comment by Whatever Wednesday, May 2, 18 @ 2:13 pm
john 56….regardless of pick up, shouldering just the state responsibilty is a 10% increase in payroll…painless? translates to 4% property tax increase…painless?

Comment by wondering Wednesday, May 2, 18 @ 2:40 pm
K-12 teachers pay 9% of each paycheck to TRS. It was 9.4% until recently when ERO was eliminated. In those districts where the district pays the teachers’ share, that payment pickup was negotiated with their local union in lieu of a raise to their salaries at one point. Force the teachers to pick that up and you’ll force open all kinds of contracts for renegotiation, which will result in large raises all around to make up for what is taken away. And with the teacher shortage we’ve got going on now, you’d better believe the unions would be asking for at least 9%, if not more.

Comment by Still Waiting Wednesday, May 2, 18 @ 2:47 pm
== And teachers do pay into TRS. Every paycheck ==

Not necessarily … A lot of school districts have agreed to pick up the teacher (employee) portion of the pension contribution as part of the employment contract. Legally, you can’t try to claw back that pension pickup until the next teacher contract negotiation.

If the Rauner administration pushes the State’s employer pension contribution back on the school districts, that is a approximately 9% cut in school funding until each local district can claw back the pickup … which may be, in effect, never if the teachers insist on the raises they gave up in exchange for the pendion pickup.

And here’s the real kicker (which Schnorf would point out) … if you do end up giving raises instead of the pension pickup, you just make the teachers’ final salaries higher, which makes their pension higher, which increases the debt / shortfall in TRS.

In other words, that bit of State savings now (from a cost shift) may cost the taxpayers (probably homeowners) a lot more in the long run.

The only way it comes out even is if the school districts manage a clawback without granting any raises or new benefits. I don’t see that happening.

Comment by RNUG Wednesday, May 2, 18 @ 3:07 pm
=A lot of school districts have agreed to pick up the teacher (employee) portion of the pension contribution as part of the employment contract.=

RNUG, with respect, based on what you stated it is a component of the teachers compensation, only semantically different than if they actually go home and write a check from their own check book.

=if you do end up giving raises instead of the pension pickup, you just make the teachers’ final salaries higher, which makes their pension higher, which increases the debt / shortfall in TRS.=

Many districts count the pension pickup in the teachers pensionable income, simply adding to the pay and then backing it out as a deduction, they even go so far as showing two different numbers in the salary schedule.

If cost shift were to happen, and I think it should, schools should have the ability to levy for the additional cost just as they do for Social Security (which all of those that post here advocating for TRS pensions to mirror SSI should support) and TRS.

As many of us knew from Jumpstreet, the politicians were never really going to give schools more money. While they may have given on the GSA side, they continued to slow pay or no-pay MCAT’s and they also reduced CPPRT. For our district this meant that we ended up with a net loss even with the so called “hold Harmless”.

Comment by JS Mill Wednesday, May 2, 18 @ 3:18 pm
==Sad way to make a living, Rachel, with the obvious lying. On the taxpayer dime, to boot.==

C’mon word, cut her some slack. What else is she going to do for the final 261 days of her employment with the Govs office? State internet filters block Facebook and Snapchat, and Allison does not take well to people encroaching on his spox fiefdom. Might as well put out whatever pablum Diana or Big Brain emails to her.

Comment by Lester Holt’s Mustache Wednesday, May 2, 18 @ 3:25 pm
== Many districts count the pension pickup in the teachers pensionable income, simply adding to the pay and then backing it out as a deduction ==

I’ll just observe that was NOT the way the way the State treated it the few years they did a pension pickup for SERS employees.

Comment by RNUG Wednesday, May 2, 18 @ 3:30 pm
RNUG and JSM, pension pickups are required to be included in TRS creditable, or pensionable, earnings.

Comment by Arthur Andersen Wednesday, May 2, 18 @ 3:33 pm
rnug, how many is alot? I don’t know, do you? That would be helpful.

Comment by wondering Wednesday, May 2, 18 @ 3:37 pm
== RNUG and JSM, pension pickups are required to be included in TRS creditable, or pensionable, earnings. ==

OK. Then my point is invalid.

-AA-, that wasn’t how the State treated our few year pension pickup.

Comment by RNUG Wednesday, May 2, 18 @ 3:39 pm
I laugh every time budget process is somehow portrayed as difficult. Its as if it sneaks up like cousin Eddy and says “Hi Clark we’re here” History tells us the ILGA and the Govs for 200 years have passed some sort of budget with a few exceptions like two years ago etc. How hard is this? Here is what we have to spend give or take a billion, here is what we want to spend it on…. agree to a number and vote… scream point fingers move on…place blame… go to polls repeat ad nauseum.

Comment by NorthsideNoMore Wednesday, May 2, 18 @ 5:14 pm
I think I saw this episode last year. Budget stalemate until threat of bond rating downgrade and public university collapse forces resolution. No way for Democrats to agree to pension offset 6 months before election.

Comment by PhD Wednesday, May 2, 18 @ 5:51 pm
@DuPage: No, most suburban district pay both the district and the employee portion of the TRS retirement premium. It’s called a “pick-up”. This way teachers also avoid tax on their half.

Comment by John 56 Wednesday, May 2, 18 @ 10:10 pm
@wondering: How many is a lot?
See https://www.illinoispolicy.org/instead-of-tax-hikes-end-pension-pickups/
Also, private sector employees pay state income tax on their Social Security contributions.
But teachers do not pay income tax on their portion of the pension that is picked up by the school district.

Comment by John 56 Thursday, May 3, 18 @ 8:37 am