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* Every time somebody floats the idea of skipping or skimping on pension payments, they use the same argument that is ably outlined by Andrew Bodewes in this article. Every. Single. Time…
Democratic Gov. J.B. Pritzker’s pension proposal is not sitting well with state lawmakers, an adviser to the Illinois Teachers Retirement System told its board of trustees last week.
The governor’s plan is to reduce payments to the various pension systems by $850 million next year, while extending by seven years the time it will take to pay off $134 billion in unfunded liabilities.
While the plan appears unpopular now, Andrew Bodewes, the board’s legislative liaison, said that could change as the end of the session draws near and lawmakers have to consider the other options.
“I don’t want to suggest that the majority of the General Assembly could ever get to a place where they’re OK with reducing pension payments by $850 million,” Bodewes told the board during its annual retreat Thursday in Springfield. “But when they start looking at, ‘We’re going to cut schools by this, we’re going to close these parks; We’re going to reduce these services to children with learning disabilities,’ it starts to get real. Those conversations get very real. So I’m always sympathetic to the members.”
“We gotta skip pension payments so we can fund (fill in the blank).” It has always been thus. Always.
And, of course, that $850 million is what the governor claims the skimp would be. It could actually be as high as $1.1 billion per year for seven years. Amanda Kass, who calculated the higher figure, was on Illinois Public Radio the other day. Listen to the interview by clicking here.
posted by Rich Miller
Monday, Apr 29, 19 @ 2:13 pm
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I guess everyone has forgotten how wildly popular Quinn was for raising taxes, cutting spending, and making full-boat pension payments.
Is his statue ready yet? I imagine there will be a huge crowd for the unveiling.
Comment by wordslinger Monday, Apr 29, 19 @ 2:20 pm
Row
Row
Row…but gently.
Comment by Dotnonymous Monday, Apr 29, 19 @ 2:24 pm
===“We gotta skip pension payments so we can fund (fill in the blank).” It has always been thus. Always.===
Skipping pension payments is a pretty high interest loan at 7.5% interest. Seems to me selling/leasing state assets would be infinitely preferable. What ever happened to that idea? For that matter, even though the state is paying a premium for bonds, that interest rate has to be way south of 7.5%? And yes, extending the ramp, but using the extra time that buys you to skip pension payments is just plain dumb. If you need money now, raise taxes now, and quit making our kids and their kids pay for your easy way out.
Comment by PublicServant Monday, Apr 29, 19 @ 2:25 pm
And JB brags that his “austere” budget (highest in the history of the state) is balanced.
Comment by Lucky Pierre Monday, Apr 29, 19 @ 2:39 pm
You were elected to do the right thing JB. So, do it.
Comment by PublicServant Monday, Apr 29, 19 @ 2:43 pm
==Skipping pension payments is a pretty high interest loan at 7.5% interest…If you need money now, raise taxes now…==
Raising taxes now means I have to skip payments into my retirement fund to pay those taxes, which is also a pretty high interest loan at 7.5% interest.
Please don’t diminish and impair my retirement.
Comment by City Zen Monday, Apr 29, 19 @ 2:59 pm
It always ends with a scream.
Comment by Keyrock Monday, Apr 29, 19 @ 3:03 pm
Didnt Pritzker propose doing a bond issue that would put about $2 billion into the pension systems? I think it was mentioned in February.
Comment by Hottot Monday, Apr 29, 19 @ 3:12 pm
New Governor, new day, mostly same old Legislature, same old proposals.
Comment by RNUG Monday, Apr 29, 19 @ 3:15 pm
==forgotten how wildly popular Quinn==
And how he got eaten alive for suggesting we should borrow money for the overdue bills when interest rates were basically nil. Sure would have been nice to have that backlog down to $0 when Rauner came in and didn’t sign a budget for three years.
It’s going to be so weird when we look back Quinn is our most responsible governor for the last two decades. Hoping JB pulls up out of this pension madness.
I mean, I get it. When I bought my house, it turns out it needed a new roof. I didn’t wear through the roof and I would have liked to have spent that money elsewhere - but there we were. And the money I spent keeps the water from seeping in and destroying the entire house. Pay the pensions.
Comment by lakeside Monday, Apr 29, 19 @ 3:19 pm
== It’s going to be so weird when we look back Quinn is our most responsible governor for the last two decades ==
George Ryan (99-02) made the pension payments and was a fairly decent administrator also.
Comment by RNUG Monday, Apr 29, 19 @ 3:22 pm
Fair. Though feels like that prison term might keep him from being one of the greats.
I’m not saying it’s a high bar….
Comment by lakeside Monday, Apr 29, 19 @ 3:26 pm
==George Ryan (99-02) made the pension payments and was a fairly decent administrator also. ==
How much did his buyout cost the pension systems?
Comment by The Original Name/Nickname/Anon Monday, Apr 29, 19 @ 3:27 pm
It would be one thing if JB was diverting money to spend on infrastructure which would make the State more competitive- but no it’s on feel good Social BS
Comment by Sue Monday, Apr 29, 19 @ 3:35 pm
Quinn does keep looking better.
Ryan sounds like a decent Governor. Can’t forgive him for the illegal drivers license scheme. My in-laws were in an ambulance broadsided by a semi driven by a “Ryan” driver. Their EMT was thrown 50 feet and killed.
Comment by Last Bull Moose Monday, Apr 29, 19 @ 3:38 pm
Same old same old. They get what they voted for. Glad it will be someone else’s problem in a year or two…..
Comment by Wylie Coyote Monday, Apr 29, 19 @ 3:53 pm
==George Ryan (99-02) made the pension payments==
Could Ryan/Quinn/etc been able to make the same pension payment JB has to make?
Comment by City Zen Monday, Apr 29, 19 @ 4:05 pm
Skipping pension payments is all part of JB’s nefarious plan to force the state into doubling the income tax rate. Bankruptcy isn’t an option, and once the pension funds run out of money, raising taxes will be easy peasy.
Comment by Angry Republican Monday, Apr 29, 19 @ 4:50 pm
At the latest DCEO meeting, JB asked if there were any canning manufactures in the state. It appears one has a very large dent in it.
Comment by Blue Dog Dem Monday, Apr 29, 19 @ 6:26 pm
Underfunding pensions is not the same thing as taking money from retirees, or future retirees. Funding pensions is mathematically wise. The question becomes, in a financial world decimated by Rauner, how do we repay the sins of our fathers. I get wanting to push that off. Every Governor since WWII has pushed off some portion of that debt sooner or later it can’t be pushed off, but nobody wants to be the first Gov to pay.
Comment by Polpen Monday, Apr 29, 19 @ 9:08 pm
–it would be one thing if JB was diverting money to spend on infrastructure which would make the State more competitive- but no it’s on feel good Social BS–
Such as?
Comment by wordslinger Tuesday, Apr 30, 19 @ 8:45 am
I wonder if there is some other retirement system the government could use going forward instead of pensions. It seems as soon as pensions are involved there is always an issue funding them. We cant rely on the funding since there is nothing forcing the state to put that money aside as JB is now showing us.
Comment by Maximus Tuesday, Apr 30, 19 @ 8:57 am
Sue, have you ever been out of work with children, been faced with a medical problem that could push you into bankruptcy, ran out of money way before any more money was coming in, spent down all your resources and still been in a bind?
If so and you still feel that way you and if you believe in karma, look out.
Comment by don the legend Tuesday, Apr 30, 19 @ 9:33 am