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* A whole lot of state employees comment here. I have no objections to that. In fact, I welcome their input and even encourage it.
But ever since Gov. Pat Quinn unveiled his pension reform plan I’ve found myself deleting more of their comments than usual. Most of the deleted comments were all heat and no light. All anger and no reason.
So, when I saw the State Journal-Register’s story today quoting four Springfield-area Republican legislators about pension and Medicaid reform, I found a passage that will help me illustrate my recent thoughts on this matter…
As for the governor’s pension plan, the four lawmakers echoed public employees’ contention that the state is to blame for underfunding the systems — but offered few solutions.
[Rep. Rich Brauer] said the state needs to see how much it can save in Medicaid first.
“They’ve used that thing as a credit card,” Brauer said of the pension system. “Now you want to punish those people (employees) who put the money in.”
* Listen, folks, when the state is talking about kicking tens (even hundreds) of thousands of some of Illinois’ most vulnerable citizens (elderly and the poor) off Medicaid programs, it’s really tough to totally sympathize with public employees. Senior citizens paid taxes their entire lives, but now health care benefits are about to be snatched away from them. So, this whole idea of how you contributed to your pension and how the state screwed up so you should now be spared any cuts at all just doesn’t pull at my heart strings.
I am opposed to this disgusting national race to the bottom. I cannot stand the argument that just because millions of people are never going to be able to retire at any sort of comfort level that public employees ought to be forced into the same nasty fate. And I fully understand our state Constitution and why it was drafted to protect pensioners.
But, I gotta tell you, I’m really growing tired of your complaints. And if you’re alienating me to this extent, imagine what effect you’re having on everybody else.
* So far, the unions and the workers have been all about criticism and nothing about alternative ideas.
And, by the way, there ain’t gonna be another tax hike. Forget it. That’s not a viable alternative and y’all know it. Don’t insult my intelligence by proposing one.
* Look, I don’t want to see any lives destroyed or irreparably harmed. My favorite uncle (who’s more like a big brother to me) is a retired state employee and I really doubt he could afford to pay his full health insurance premium.
But it’s time for some workable solutions here, and so far I’ve seen nothing from your side but anger and endlessly repeated history lesson talking points. What’s done is done, man. It’s time to move forward.
In this business you’re either part of the solution or you wind up as roadkill. Trust me when I tell you that you’re about to be the latter.
* Related…
* Civic Federation lauds Quinn’s proposed 2013 state budget: Gov. Pat Quinn’s proposed fiscal 2013 state budget is getting a big thumbs-up from an unexpected source: Chicago’s Civic Federation. In somewhat of a man-bites-dog mode, the usually critical federation says Mr. Quinn’s proposed $57.4 billion budget not only “acknowledges the depth of the state’s financial problems” but would put finances “on the road to recovery with major reforms” of Medicaid and worker-pension spending.
* Civic Federation press release
* Civic Federation budget analysis
* Rural school districts prepare for cuts
* Is Illinois still a ‘union-friendly’ state? - Organized labor taking on ‘friendly-fire’ from Illinois Democrats.
* States scaling back worker pensions to save money
* State job losses drag down recovery: Since the beginning of Obama’s presidency, 611,000 state and local government jobs have been lost. That number includes 196,000 teachers, and the decrease in state and local spending caused by the job losses has played a role in the glacial pace of our economy’s recovery.
* State lawmakers consider constitutional amendment to contain pensions
posted by Rich Miller
Tuesday, May 1, 12 @ 9:37 am
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Good point Rich.
Comment by OneMan Tuesday, May 1, 12 @ 9:43 am
I agree, Rich. It seems to me that unions have been overestimating their bargaining position for at least a couple years now, and they’re just gonna continue to get bulldozed if they aren’t willing to come up with reasonable compromises. They’ve lost sympathy from the public, and that is all that most politicians care about.
Comment by JasonH Tuesday, May 1, 12 @ 9:46 am
http://abetter54.com/54.html
Actually its the Quinn adminsitration setting up the conflict. His IDOT secretatry said if we cut pensions and medicaid we would have more money for Capiatl Projects……Well do we need a Billion dollar road between Macomb and Peoria….why do we spend 10 million a mile for low volume divided highways downstate when Missour spends like 1 to omprove them. Like Mdicaid the feds statretd the Interstates Why dont we toll all of them and take money from the capital budget. Illinois is far from being Greece unless this is just a ruse to attack unions and opoor people…….
Comment by western illinois Tuesday, May 1, 12 @ 9:49 am
I wonder if any thought has been given to making school districts and universities pay the pension costs on raises. That would be easier to phase in since those employers have total control over raises and could factor pension costs into raise decisions.
Comment by thechampaignlife Tuesday, May 1, 12 @ 9:49 am
===Actually its the Quinn adminsitration setting up the conflict===
Yeah. Quinn is 100 percent to blame. Sheesh.
But I agree that the tone of that IDOT statement is odd. Was already planning a post. Now, get back to the subject at hand, please.
Comment by Rich Miller Tuesday, May 1, 12 @ 9:52 am
The unions are underpushing on this If anyone saw the front page of Sundays New York Times you would see there would be no democratic party without the unions
In post Citizens United the parties are well not much …Take a look at Richard Lugar next door in Indiana….Pat Quinn
Comment by western illinois Tuesday, May 1, 12 @ 9:52 am
Has anyone who favors leaving benefits as is and increasing taxes to cover the shortfalls proposed a specific plan to that effect? I wonder what it would take on the tax side to make good on the promises under either the current flat state income tax or a new progressive system. I assume it would be ruinous but would like to see the actual numbers.
Comment by Carlos S. Tuesday, May 1, 12 @ 9:53 am
I personally think one mistake made this past year in moving into this, was the divided pay treatment. Some of the members got their increase per the contract while some did not. So now in asking for the 3% pension contribrution, the workers are looking at it from two different angles. Part the the workers would be only giving back what they just recieved, while another part would actually be having less in paycheck than they did preFY12. Yeah, I survived without my increase, but now the contract covered workers are not all looking at this in the same level manner. If it was withheld some some, it should have been across the board of these covered…no one should have recieved it. It’s given an unlevel footing going into this next cycle.
Comment by Cindy Lou Tuesday, May 1, 12 @ 9:53 am
Now for the comment.
At the end of the day there is going to be a lot of pain for a lot of people, pain that in some ways the hardest to take because it is due to the bad choices of others.
Yes, you paid taxes, yes you paid into your pension without fail… You did what you were told to do, what you were supposed to do and after doing that for a long time, you find out the deal is not the deal you thought you had.
That sucks…
But as parents see their kids walk 2 miles to school, as we wonder where in the heck the field trips went, Jazz Band went, all sorts of other things went. We hear that the state isn’t make the contribution to education they said they would. We wonder, who else is getting less.
No one logically wants to get less, not parents for their kids, not drivers on roads, not those who participate in various government programs.
But at the end of the day, everyone is going to have to get less and the sooner we all accept that, the better it is going to be.
Comment by OneMan Tuesday, May 1, 12 @ 9:53 am
Ask your uncle about workable solutions, Rich. (Just tell him to move forward)
Comment by anon Tuesday, May 1, 12 @ 9:56 am
hey, anon, bite me. And goodbye.
Comment by Rich Miller Tuesday, May 1, 12 @ 9:58 am
I think we need a two-stage solution.
Stage one: Pay off the current backlog - this should be a combination of 5-10 yr bonds and some serious short-term belt tightening in pretty much every area. Beef up revenues - makes the tax hike permanent, add sales tax on services, pass an amendment authorizing a graduated income tax (basically get our tax structure to be a little more like Indiana and Wisconsin).
Interim: Set priorities for funding! (We never seem to do this; instead we throw money at whoever squawks the loudest.)
Stage two: Once the backlog is down to 30-45 days worth of bills, start to restore funding based on the priorities set during the interim.
Comment by Pot calling kettle Tuesday, May 1, 12 @ 9:58 am
I agree with you totally Rich. If the unions and the state employees do not get prepared to make some real sacrifices just like everyone else then they will deserve the screwing that they are about to receive.
Yes many public employees will have to make some financial adjustments but so do the millions who have become unemployed, sick or injured and are now see the state be less generous with them.
It is time for state employees to face the harsh reality that often life is not fair.
Comment by Cassiopeia Tuesday, May 1, 12 @ 10:01 am
I don’t like the cuts in medicaid reforms either.
What about offering it up to the middle class and others as an insure based premium. Money comes in and base it on income. This might work better with Medicare.
Comment by Anon Tuesday, May 1, 12 @ 10:02 am
Well said, Rich. Sorry you have to put up with the nonsense.
Comment by Shore Tuesday, May 1, 12 @ 10:02 am
I agree Rich and I’ve suggested on here that I’d be willing to pay more into my pension to keep my benefits, I’d agree to retiree health insurance costs, based on a percentage of your pension (I shouldn’t pay the same as those pulling in 6-figure pensions) and I could even see raising the retirement age, perhaps to 62. And I’ve called my legislator with those suggestions. It’s unfortunate my union is stiffly opposed to any of those suggestions. As far as the state employees, I think they’re just tired of doing more with less…and less…and less. I’m down to half my office staff and we have quadrupled our coverage area and work, for years now. I think the pension proposals were just the last straw for many.
Comment by Former Merit Comp Slave Tuesday, May 1, 12 @ 10:05 am
No new project and program spending. Period. Maintenance only.
Does anyone like Schnorf know what across the board spending cut percentage would be needed for 3 years (pushing the temporary income tax increase out to that time) to get us back on a sustainable path?
Comment by Cincinnatus Tuesday, May 1, 12 @ 10:05 am
Rich, you make some good points, and in the spirit of solutions, I reiterate my former position: Benchmark all existing, vested employees into the current system, with no reduction in benefits expressed or implied. Begin with all new or non-vested employees into the new system from here forward. This will undoubtably change the actuaries for the better, and over time, with the State paying their portion on time and in full, the program heals itself. Make adjustments when needed. This way the state doesnt spend the next two years and tens of millions on litigation to defend their lame position. Geez, even “significant others” can sue after eight years like they’ve been married…but I digress.
Comment by Captain Illini Tuesday, May 1, 12 @ 10:06 am
I’ve said this for quite some time - and I recognize it is heresy for the people with 15 - 40 years as State employees, but honestly, for state employees under say 35 (yes, they exist), I think given a choice many would gladly opt into a matching 401(k) style program.
Here’s the deal. The State pension the State controls - the can borrow from it, short it, etc. They have done just that for decades. And ultimately the Supreme Court will decide if they have to fund it - clearly politically they are trying to get away from that.
And, oh, did I mention, the Illinois Supreme Court is also an elected body? +1 vote their and the pensions are gone.
Maybe it will all come to fruition, or maybe it wont. For those of us who do not have decades invested in the current system, I’d MUCH rather, and suspect others would as well, have a 401(k) in my accounts not subject to the State shorting or borrowing against it or otherwise taking it away.
Furthermore, for those younger employees, I think we’ve seen what happens when you put a certain amount of time in and become “stuck” with the State employment b/c you have to hold out for the pension. No thanks. The older employees have taken every type of abuse (no raises, no bonuses, for years, etc), and they just keep taking it and taking it b/c they dare not test the private sector for fear of losing the pension. Give us younger folks a 401(k) and we’ll never be in the position of being afraid to walk from the state when it does what it will do.
So, I certainly understand the angst of the older crowd, but not all employee interests are the same or monolithic…
Comment by Peter Snarker Tuesday, May 1, 12 @ 10:08 am
Absolutely, it is what it is and we can’t go back. Sure makes a case for paying attention to what goes on in our government.
Set a pension pay scale and have those receiving the larger pensions share the larger portion of the Health Insurance. Cut the perks to all elected officials and put everyone on the same Health Care and Pension Plan. Nothing more for those serving or having served, including Judges, than the lowest State Employee or Teacher.
Eliminate, through consolidation, State Agencies. Cut all travel, eliminate State vehicles, and severely cut legislative perks and retirement plans.
Stop accepting new Federal programs which require matching funds and eventual ownership of the program by the State.
Close all prisons and send the inmates to Wisconsin. Well…maybe not that last one.
Require that all programs must be fully funded to end of life or they cannot be approved.
Comment by Sunshine Tuesday, May 1, 12 @ 10:08 am
Dear Complaining State Employees: your comments make me react like a Tea Party member and I’m certainly not that. so just stop it. Rich is spot on.
Comment by amalia Tuesday, May 1, 12 @ 10:08 am
Sorry, no. It is this sort of change now for down the road and make the actuaries happy that has caused parts of this problem. Too many payment vacations and the rest, remember Rod’s stupid pension tricks.
Sorry, also your suggestions do not do one wit to reduce the issues faced by other programs, just issues with what I suspect are the benefits of your own current for former government job.
Comment by OneMan Tuesday, May 1, 12 @ 10:11 am
Rich agree with you on the complaint issue and we need to be part of the solution…that said the state universities have attempted to offer a shared responsibility plan and they have not been afforded a seat at the table (it requires they contribute, the employee contributes and the state contributes). Our problem is that the legislators who have the power to make changes are not listening which is once again one of the reasons we have this problem.
Comment by illilnifan Tuesday, May 1, 12 @ 10:11 am
–Beef up revenues - makes the tax hike permanent, add sales tax on services, pass an amendment authorizing a graduated income tax (basically get our tax structure to be a little more like Indiana and Wisconsin).–
Not going to happen, not in this environment.
The Dems bit the bullet on the income tax increase and passed it without a single GOP vote.
You can’t get a single GOPer to sign on to a cigarette tax increase, for crying out loud (because smoking is so universally popular).
Seriously, if you don’t have the guts to pass a cigarette tax increase to keep people from getting kicked off Medicaid, you should just stay at home and the comptroller will send you your checks.
Madigan basically said he’s not going to make his members, alone, wear the jacket for another tax increase. Not going to happen.
Here comes the pain.
Aren’t cuts what Rep. Brauer and the GOP have been screaming for all along?
Comment by wordslinger Tuesday, May 1, 12 @ 10:12 am
I’m a state employee & agree with this. I am PO’d at both parties for these pension holidays (since Edgar) & the pension abuses (whch seem to have no owners). Heck, I’m even irritated with those who took their pensions now & are benefitting & hope Illinois starts taxing them to so they at least contribute something towards the ultimate solution. But I acknowledge I will be getting screwed in the solution so let’s get on with it.
And I’m also sick of all these posters who think the state is going to collapse if they retire. If you haven’t done succession planning of some sort you’re not doing your job.
Comment by Original Rambler Tuesday, May 1, 12 @ 10:13 am
Since the retiree health insurance is not guaranteed by the constitution, and since I have enough time before retirement to prepare, and my health insurance payment is for present day health insuarance, I have no problem with being required to pay for my retiree health insurance… I just want it to be there when I need it. But lets leave the already retireds alone.
Second, I think we should reform that retiree health insurance so that it is only available to immediate annuitants. No jumping ship for 10-15 years and then coming back onto the health insurance when you finally start drawing a pension.
But, my pension is guaranteed by the state constituion, and I am paying into to it for a future benefit. Now, if you want to freeze it and put me in a 401K and FORCE the state to pay their contribution to it… I’ll go for that. But only if the state cant opt out of their contribution.
Comment by mythoughtis Tuesday, May 1, 12 @ 10:14 am
Yeah, health care is a problem the world over. But there is no constitutionally guaranteed right or enforceable contractual obligation for health care. There is for pensions.
Comment by Frustrated Tuesday, May 1, 12 @ 10:16 am
my wife and I are both retired state employees-I with 32+ yrs and my wife with 23.realize that we are where we are at and the past cannot be changed-your comment section gives us a way to vent and you are the recipient of it.I appreciate your patience in that area. We have no problem with the cuts that have to be made-just don’t run us off a cliff-feel for the vunerable-they have no voice or choice in the things that will be put upon them. Have seen waste in both of our positions with no way to fix it with the beurocracy of the state system. Thanks for your columns and your service to the public in giving us information that we would not know otherwise. Would have not retired if we knew that it would come to this.
Comment by anon Tuesday, May 1, 12 @ 10:16 am
I don’t disagree with anything you’ve said Rich. I think some of the issue (not that it makes it right) is exactly that “race to the bottom” argument that keeps popping up. The pro-reform groups might have served their cause better if they had argued from the beginning that “even though it isn’t fair and it isn’t because the state employees did anything wrong, this is where we are and we need to fix it, which is unfortunately going to cause you some pain.” It wouldn’t have then put everyone on the defensive as some groups’ current argument that “because of greedy, lazy public employees, we’re having to pay for pensions and now can’t afford little Susie’s education and Grandma’s nursing home costs.”
But, you’re right - we need to fix the problem and stonewalling is not a viable negotiation technique at this point.
Comment by Katiedid Tuesday, May 1, 12 @ 10:16 am
– Drop the free health care premiums;
– Drop the COLA;
– Tax pensions as income;
Do what is within the bounds of the constitution and the contract and then pay your bill.
Comment by Frustrated Tuesday, May 1, 12 @ 10:19 am
I’e worked as an educator in the public school system for 25 years. I’m not foolish enough to believe the current system is sustainable. We should move away from a defined benefit plan to a defined contribution plan like 401(k)s. I do not mind contributing more if the other side meets its obligations.
Comment by Wensicia Tuesday, May 1, 12 @ 10:19 am
I come from a big family and learned early on that the “he started it” argument is rarely exculpatory.
That said, I think its fair to say that the political atmosphere around the pension reform discussions has become toxic, and I don’t think you can blame the unions or public employees for that one.
The Harvard Negotiation Project’s “Getting to Yes” really explains the breakdown. Despite the admission of four Springfield Republicans, you’d be hard-pressed to find any public statements from Tom Cross, Christine Radogno or statewide Republican leaders acknowledging that the current pension problems are not the fault of public employees, that we all benefit from a strong and well-managed retirement system.
Instead, they have stood complicitly by while editorial boards and interest groups have villified the pension system, public employees and their unions.
Moreover, the Republicans have largely dug into the position that the Constitution offers no tangible guarantees for tomorrow, let alone next year or twenty years from now when many state employees hope to retire. “Positional bargaining” as the experts call it is the opposite of productive.
As for the unions, from what I understand the stumbling
Block is that they are insisting that any sacrifice of benefits guaranteed by the Constitution ought to come
With an ironclad guarantee that future payments arent skipped. This seems not only in the interest of
Retirees, but also in the interest of taxpayers. Skipping pension payments is, after all, how we landed in this mess.
Finally, the age-old tactic of trying to negotiate changes in labor laws is fatally flawed and most surely will only heighten the stalemate. Negotiations arent just about finding common ground based on solid facts to provide substantive solutions, they are also require building strong personal relationships based on shared values and principles. But the news media thrives off of conflict where parties are type cast into familiar story lines.
We need a motatorium on press releases, or at the very least one designated spokesperson for each of the sides who understands the importance of clearing the toxic fumes from the air.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 10:20 am
What about a chronological approach to the budget problems. Commitments made first get cut last. Commitments made first get fully funded before those that came later. Easy to identify the cuts. Yeah its going to hurt but it would be fair.
Comment by otownie Tuesday, May 1, 12 @ 10:22 am
The local Hyundai dealership in Springfield adopted the motto of “It’s not about cars - it’s about people.” Yeah, whatever. The point is that it’s about numbers. The local Hyundai dealership can’t stay open if every car buyer gets a sweetheart deal and then tells all of his or her friends to buy a car there. The point I’m making is that governance should sometimes be about the numbers. As I mentioned last week, Social Security and Medicare are quickly becoming bigger-than-expected albatrosses around the federal government. Why?! Because the reforms and cost-cutting measures have been put off for too long. The baby boomers are starting to flood the Social Security and Medicare rolls. The same will happen with state retirement - for SERS, TRS and SURS. If the unions want positive action taken, they need to crunch numbers and come out publicly with their own actuarial findings. The unions could preface their proposal to their members by making the case that a small hit now is better than a big hit when they all retire. They can iterate the importance of acting before the GA and Governor Quinn “conspire” to “take away” their benefits. At the very least, that could allow the unions and their members to win in the court of public opinion and make the GA and Governor Quinn seem silly.
Comment by Team Sleep Tuesday, May 1, 12 @ 10:22 am
Sorry, should say “I’ve worked”.
Comment by Wensicia Tuesday, May 1, 12 @ 10:22 am
Cassandra - It is precisely comments like yours that raise the ire of state employees. You are comparing us to the poor, the unemployed, children and the sick. We are none of those. We are people who worked for an employer who made a contract with us. Now, the employer cannot fulfill his end of the bargain, yes, its largely his own fault for living a country club lifestyle at the expense of his employees. OK. Lets start from there and look for a mutually agreeable way out. But STOP with the false comparisons, will you please?
Comment by lincolnlover Tuesday, May 1, 12 @ 10:23 am
It’s time for State employees to stop the fiction that they made a “deal” and the the State is not living up to their end; (1) that their Union leaders did not long understand the contracts they “negotiated” (with people to whom they contributed) were not sustainable, (2) that they did not know their increases in wages and benefits exceeded CPI every year since the early 1990s, (3) that they did not know healthcare costs have been growing by over 10% annually for at least 10 years, (4) and finally, that they would have taken an other job if they did not get the wages and benefits they won with each contract.
Comment by Aristotle Tuesday, May 1, 12 @ 10:23 am
Oops. Talk about unfairly villifying people. I blamed Cassandra for Cassiopeia’s comment. Sorry Cassie!
Comment by lincolnlover Tuesday, May 1, 12 @ 10:26 am
For the very first time Rich I am disappointed with your comments
Comment by Sherri Tuesday, May 1, 12 @ 10:31 am
I was fine with hb 512 .i think this passes constitutional muster more than quinns plan.plus it did not effect cola and insurance.
You got it right rich its a race to the bottom.
Comment by foster brooks Tuesday, May 1, 12 @ 10:33 am
Rich,
I’m for pension reform and would go along with the cola and increase it contribution in Quinns plan. But when Quinn throws in the retirement of age of 67 now that means he is making public employees pay the unfunded liability. I understand issues with cuts to medicare but is it fair that the state basically has no cost under Quinns plan and are using currents state workers to pay off the billions in liability?
Comment by STT Tuesday, May 1, 12 @ 10:36 am
To me, it comes down to this: the State is going to break some promises. Which promises is it going to break? Is it going to break its promises to the poorest, oldest, sickest, youngest, weakest members of the community? Is it going to break its promises to the public servants who have given years of service to the citizens of this state and depended on those promises in planning for old age? Is it going to break its promises to vendors, contractors, and other companies who do business with the State? Or is it going to break its promises to big banks and institutional investors who hold its debt?
Oddly enough, it’s looking more and more like those least able to cope with the broken promises are going to bear the brunt. The vendors we owe money to will get paid late with interest, and the bondholders will get paid on time, with interest. Everyone else will get the shaft.
Comment by lincoln's beard Tuesday, May 1, 12 @ 10:36 am
amalia, how would you like it if you had a time deposit at a bank that you contributed to, got annual statements on and fully believed contained 100K. But as your getting close to withdrawing it, you find out its really worth 50K. The bank hadn’t really put it their payments and now they aren’t going to. I doubt you would be as cavalier as you seem to be about public employee pensions. It’s been said before…and Rich hates hearing it….but the State’s actions have been tantamount to fraud.
I honestly think the Cross bill makes the most sense of any of the options floated. But it’s still a shameful situation for the state.
Comment by Raising Kane Tuesday, May 1, 12 @ 10:37 am
===fully believed contained 100K. But as your getting close to withdrawing it, you find out its really worth 50K===
If your pension benefits were getting cut in half then this would make sense. They’re not.
Comment by Rich Miller Tuesday, May 1, 12 @ 10:42 am
So, we must quit complaining because repetition irritates the pundit. We must accept the fact that the State will always renig on its promises and resign ourselves to simply paying, more (for retirement), more (for health care), more (for better roads), more (for high salaried State executives), more (for local schools and higher education), more, more, more …. So why not simply raise my Income Tax and get over it. Pitting special interests against one another is not the answer. Tax me more, but don’t lie to me and change the rules.
Comment by ANAL Tuesday, May 1, 12 @ 10:43 am
Unions can blame legislators for their follies, but let’s be honest, most the proposals that are coming back to bite the State financially were backed by unions.
Few wanted to look down the road at the liabilities that the State was creating by enhancing pensions. The majority didn’t want to change the way actuarial estimates were done. No one wanted to address the collective bargaining issues in the State. No one appears to have wanted to address longer life spans.
The writing has been on the walls for years and the very people who were enhancing their own lot are now forced to reckon with paying the piper and they don’t like it. No one wants to take responsibility for the situation and their is plenty of blame to go around, union leadership and membership included. Unions want to have ownership and a say in the direction, and with that comes responsibility and the need for vision.
Comment by Shemp Tuesday, May 1, 12 @ 10:44 am
===So, we must quit complaining because repetition irritates the pundit===
Yes, that’s exactly what I meant.
Can you read?
Comment by Rich Miller Tuesday, May 1, 12 @ 10:45 am
Also, too, choose another screen name. Your current one is a TOS violation.
Comment by Rich Miller Tuesday, May 1, 12 @ 10:49 am
Do away with rule of 85. It never made sense to me anyway. Retirement age should be the same as social security: 62/67. New (not current) retirees should pay a sliding scale for health insurance. Lower the funding mandate to 80%. And, role the GA into either SURS or SERS. I don’t know if this last one would save any money, but it would get their attention when they decide not to make their payments.
Comment by lincolnlover Tuesday, May 1, 12 @ 10:49 am
dot “truck drivers” maintainers making $75000 a year???
Comment by retired ed Tuesday, May 1, 12 @ 10:49 am
Gotta love the New Journalism where the Capt Fax rips the readers —very deserved.
Can we suggest a path to solution that we begin with a Statewide Day Of RANT. During the SDOR, all parties will bag off on the commitments mande, the salaries spiked, the car allowances counted as pensionable salary, the medical scams, Stu Levine, et al investment decision….wwe think you get the picture.
AND then following the SDOR we gather to chart a course and make choices…solvent and stable or broke and non paying. Benefits for the most needed or pocket padding. Slip shod paper pushers or competent well staffed bureaus.
There are zero easy choices but the debate is mired in the “who can we blame” quadrant will lead to failure and non performing systems at all levels.
Comment by CircularFiringSquad Tuesday, May 1, 12 @ 10:50 am
Maybe we could get Quinn to recognize all that money going to Indiana every month at the casinos would look good in the Illinois budget. Expand the sales tax to cover services. Change the ramp to be more realistic. Take into account that the 2007 -2011 return on investments were historically poor and the returns will improve over time. Negotiate away the sweetheart deals where some agency’s are paying less
Than 8-9% towards their pensions. Tax the golden pensions of over 100k.
Comment by Fed up Tuesday, May 1, 12 @ 10:53 am
Hey Rich, sorry to hear you’re offended by state workers complaining about getting the shaft, but as you can imagine, getting the shaft without any lube stings a might. We have proposals, many proposals about how to address the budget mess. Now if only we had a place at the table to air them and add them to the debate. We are, as always, open to negotiate. We are a union, that’s what we do. Much of the dialog on pension is being done without us. Much, I meant ALL of the dialog. That is a large part of the problem. We were similarly ignored decades ago when we said the state needs to pay their part. We were ignored years ago when we said the state need to make up lost revenue with a tax increase. I’m not making these points to, as you say,” endlessly repeated history lesson talking points.” But to point out that we do have ideas on how to deal with the problems, but we are often ignored because no one wants to hear them. Unions, public or otherwise, are about having a say in the process because the “process” is our lives, not livelihood, but the lives we live at work and at home. Locking us out the negotiations on lives, well…that’s not moving forward, but backward to the time before there were unions to protect workers’ rights.
Comment by T Bateman Tuesday, May 1, 12 @ 10:54 am
I agree with most of what has been said here. My suggestion, for what it’s worth, would be to take another look at the “ramp” law and ask what is so sacred about achieving 95 or 100 percent funding in a certain number of years. Yes, that level of funding would be good to achieve but is it absolutely necessary, given that ALL state employees are never going to retire at the same time? A change in that law might provide a little more breathing room so that changes to retirement age, benefits, etc., though still necessary, might not have to be as drastic.
Comment by Secret Square Tuesday, May 1, 12 @ 10:55 am
Rich and most readers here are immersed in the Illinois political world.
While we may rapidly tire of these complaints, those complaints may just now begin reaching the population as a whole, many of whom are immersed in everything but Illinois politics.
However, we also need better than complaining and repetitive messaging. We need problem-solving at a complex level from everyone in our state.
While we may be tiring, they may be thinking they’re finally reaching people. Just an observation.
Comment by Freeman Tuesday, May 1, 12 @ 10:55 am
I am done complaining Rich. I will keep my mouth shut and when my pension is cut or my insurance is taken away I will sue the state for my job back for breech of promise. If unsuccesful I will become a writer/reporter and make the big money like you!
Comment by Nieva Tuesday, May 1, 12 @ 10:56 am
Rich, try some calculations on the non-compounded cola.
Comment by Raising Kane Tuesday, May 1, 12 @ 10:59 am
When I find myself depressed due to reading about the current situation in Illinois, I hop back into the CapFax wayback machine, and I start reading posts and comments from the 2005-2007 era.
Back in those days, all of Illinois problems were solved by simply throwing money at them.
It doesn’t necessarily cheer me up, but it gives me insight into the madness.
Comment by Ratman Tuesday, May 1, 12 @ 10:59 am
First of all…not all workers in line for a state pension are union members. University employees for example. So can we move past that?
The legislature raided the pension funds years ago in order to avoid raising taxes…in effect, they were cowards - getting re-elected was their main goal. But in any event, all Illinois taxpayers benefited from the plundering of the pensions funds. Now Illinois taxpayers, and the legislature, want to stick it to retirees and future retirees, by making this small group shoulder the cost of the benefits that EVERYONE in Illinois received….in effect, the state’s taxpayers, and the legislature, will get away with theft.
Now, I don’t have the solution and Rich is right, there ain’t gonna be another tax increase for a long time. But I don’t understand how some people don’t seem to get what happened. And why they think its OK to make retirees pay for the benefits and programs that everyone received.
Comment by Deep South Tuesday, May 1, 12 @ 11:00 am
Correct me if I’m wrong, but aren’t pension benefits a function of (1) employees’ contributions, (2) the State’s contributions, and (3) investment income? If so, then yes, employees have contributed their share, no, the State hasn’t, and, well, investment income hasn’t performed as expected. Therefore, the pension liability isn’t solely because the State didn’t make its payments, it’s also because pension investments produced less. Therefore, arguing employees should pay more has SOME merit. The union’s mantra that it’s all the State’s fault ignores this, and lessens their argument.
Also, as some commentors have noted, health care costs have risen dramatically and so covering retirees’ health insurance probably costs more than expected when the employees’ share was calculated.
Finally, as many have pointed out, life’s not fair and there’s no guarantees.
Comment by Sir Reel Tuesday, May 1, 12 @ 11:05 am
D.S. said,
“The legislature raided the pension funds years ago in order to avoid raising taxes…”
… or holding the line on spending…
Comment by Cincinnatus Tuesday, May 1, 12 @ 11:06 am
There’s plenty of fully warranted disgust and blame about the actions and inactions of our state’s politicians (both parties) and it is regularly expressed in the public square as well as on this blog. But what is seldom seen expressed is disgust and blame leveled against union leaders and spokespeople by the unionized state employees. How is this possible? How can most union members not feel betrayed by their own leadership?
From the outside, and to many Illinois taxpayers, it sure looks as if the union leadership has collected dues for years, then mostly stood by doing nothing while the pensions were not being funded– all the while enjoying their own big salaries and perks. There is no logical argument that can be made that the union bigs did not know the pension funds were being underfunded and that “it” was going to hit the fan sooner or later. Yet apparently they did little to demand changes, or alert or prepare their members for the inevitable cataclysm. Over the years they did nothing to overtly press the issue in the media or when backing candidates. What exactly have they done in recent years to deserve the loyalty of union members? What have the union dues been used for? As Rich asked, what solutions or genuinely helpful suggestions have the unions put forward?
When public union members themselves start asking these questions our state will be in a better position finally to jointly and rationally start to solve the pension problem. Rich is not the only one tired of the complaining–and quite correct in pointing out that the taxpaying public ain’t buying that we alone should bear the burden and pick up the pieces of the broken pension system when it’s the pols and union leaders who’ve been playing the games with our money, too.
Comment by Responsa Tuesday, May 1, 12 @ 11:07 am
Deep South, with all due respect, making “retirees pay for the benefits and programs that everyone received” is just the least bad alternative.
Comment by Carlos S. Tuesday, May 1, 12 @ 11:08 am
I really don’t have a problem with the contribution increase. It’s a great pension, and if that’s what it takes to keep it, fine.
My only problem is the move to 67. Not that I want to be lazy at 50, but I don’t think the general public really knows what this means. As a teacher, you have very little mobility. You can’t move between jobs as you can in many other careers. Once you get a Master’s degree, or 10 years of experience, schools will almost always higher than college grade because he’s cheaper. I know that’s true in other fields, but even more so in teaching.
I completed my Masters last year, and am currently in year 10. Moving the retirement age to 67 means I’ll be here in this school for another 35 years. That seems like a sentence, since I really don’t have the option to teach anywhere else.
I’ll take a reduction in % (say, 65%) before I have to teach until 67. I’d rather retire, find a new career, and know I have a fair pension. Both my teaching profession and my sanity would be the better for it!
Comment by Burnham Wannabe Tuesday, May 1, 12 @ 11:10 am
If the state had made it’s full contributions to the pension systems all these years it never would have had the money to expand programs and services for decades and decades and a lot of positions that now exist never would have been created in the first place.
So, if the employees don’t like the proposed changes, we can just start making the full and required pension payment year after year after year and as that amount continues to grow, there will be less and less available for the rest of state government operations and the layoffs will steadily increase and the number of people working in the public sector will shrink annually as state government struggles to find the money to make the pension payments.
Today’s complainers, however, are banking on getting out and screwing the next generation of would-be public sector employees. Hey, sorry there’s no longer any jobs in that department, but I got mine. Not my problem.
And in that sense they are exactly like the lawmakers and governors who created this problem by only thinking about the here and now and what might await future employees and taxpayers down the road.
Very Orwellian in that, in the end, you can no longer tell the pigs from the humans.
Comment by Michelle Flaherty Tuesday, May 1, 12 @ 11:10 am
For one who supposedly detests drive by slogans I thought a different platitude would have been offered rather than the “states most vulnerable” vs “the greedy state worker.”
Comment by Generation X Tuesday, May 1, 12 @ 11:13 am
Deep South, very well put. I agree 100%.
I do have some options to fix the problem that are constitutional. Again…
Drop or reduce the COLA;
Charge for health care premiums;
Start taxing pensions;
Stop the 100% funding nonsense, 80% is fine.
Comment by Frustrated Tuesday, May 1, 12 @ 11:14 am
== If your pension benefits were getting cut in half then this would make sense. They’re not. ==
Under the Quinn proposal, the cola would be one-half of CPI and not compounded. How many years of that would cut the pension value in half?
Comment by reformer Tuesday, May 1, 12 @ 11:18 am
It’s time to pay for the economic melt down of 2008 and our state government’s inability to do right by it’s citizens and its employees.
Im in AFSCME. I’m willing to kick in my share, three percent more, as long as I’m guaranteed it’ll be there when I retire. That’s the big question. Will it be there? We’re all going to take a hit. I agree with Rich and wish my union’s leadership would do more to work out a solution or compromise rather than blow hot air. I too beleive the public isn’t too sympathetic to the union’s whinning.
Comment by We're all paying no matter what Tuesday, May 1, 12 @ 11:18 am
A bit off topic, but some very interesting stuff being presented at the COGFA hearing taking place right now.
Comment by Freeman Tuesday, May 1, 12 @ 11:19 am
=== If the unions and the state employees do not get prepared to make some real sacrifices just like everyone else ===
Cass, this might be one of the most preposterous premises of all.
Sears is not biting the bullet.
Chicago Mercantile Exchange is not biting the bullet.
Nor are:
- Corporations enjoying $1.4 billion a year in income tax loopholes.
- Out-of-state companies that avoid collecting sales taxes through the Internet loophole…$700 million a year last time I checked.
- People earning retirements of more than $100K a year, which are exempted from the income tax;
- Service providers, who are exempted from collecting hundreds of millions in sales taxes.
Deep South is correct. For years leaders from both parties and anti-tax advocates have been promising voters something for nothing. Voters have gone along with and benefited from the charade, including the aforementioned beneficiaries of corporate tax breaks and loopholes.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 11:21 am
well said Rich, while I sympathize with State employees and teachers (they are my neighbors after all) we simply cannot afford the benefits they get. I think the Gov’s plan is too much, but I think they should have to work a few more years and possibly contribute more to their pension.
I can’t feel sorry for someone because they can’t retire at 55 (queue some state worker outcry).
Comment by Ahoy Tuesday, May 1, 12 @ 11:25 am
what about all of us that are not in the union? Dont make 6 figures and havent had a raise in 8 years. I dont have anything left to give back!
Comment by Just Because Tuesday, May 1, 12 @ 11:25 am
To sir reel…yes the pension is based on investments. The problem is since the state did not make the contributions required the amount of income generated on the investments was not what it should be…for example if you contributed $100 and your employer matched $100 and you had a 7% return on the amount in the plan you would make $14. But since the state did not put in their share the pension plan was only able to generat half of the return. You then compound this over 30 years and Voila a shortfall
Comment by illilnifan Tuesday, May 1, 12 @ 11:28 am
@Raising Kane, note that I wrote “complaining State Employees” not State Employees. I’m well aware that public service is a noble thing and that public servants earn their keep. Illinois has many different jurisdictions and thus many different kinds of public employees. benefit levels for retirees vary greatly (anyone have a chart on this?) and perhaps equity would be a nice thing since all are taxpayers in the state of Illinois.
Comment by amalia Tuesday, May 1, 12 @ 11:30 am
A large part of the solution has to involve the bargaining process. Increasing employee contributions would be a start. Decreasing subsidies for health insurance from 5% to a lower percentage for future years seems fair. If retirees are to pay more for health insurance then increase copays significantly. Adjust the ramp up in pension payments by increasing the time to reach the goal and decrease the percentage funding goal. Make the local governments downstate pay more toward their employees pensions. Take note of the fact that, in a few years most employees will be on tier 2. As for the irrational anger, unconstitutional solutions, or those that violate labor contacts, bring that out in people. Shared sacrifice, including treating all future legislators exactly the same as state employees would help.
Comment by AC Tuesday, May 1, 12 @ 11:34 am
Michelle Flaherty
Exactly the problem.
If the state had not created all of these programs such as All Kids Premium Levels 3-8 (extremely low cost health insurance for people making way more money than most of the readers of this blog), free rides on the RTA for all senior citizens (regardless of income), passive Medicaid redetermination (which allows parents to get Medicaid for their children without providing any information about income), Medicaid for illegal aliens and many many more, we would not be in the situation we are in now. Before you make promises for new programs, you first ensure that you meet your current obligations.
“If the state had made it’s full contributions to the pension systems all these years it never would have had the money to expand programs and services for decades and decades and a lot of positions that now exist never would have been created in the first place.
There are actually less state employees now than there were before all of these new programs were created.
“So, if the employees don’t like the proposed changes, we can just start making the full and required pension payment year after year after year and as that amount continues to grow, there will be less and less available for the rest of state government operations and the layoffs will steadily increase and the number of people working in the public sector will shrink annually as state government struggles to find the money to make the pension payments.”
“No, my pension contributions helped pay for the people who retired before me. I paid my share. I am entitled to what I was promised & paid for.
And in that sense they are exactly like the lawmakers and governors who created this problem by only thinking about the here and now and what might await future employees and taxpayers down the road.
So you’re calling state employees pigs ???
“Very Orwellian in that, in the end, you can no longer tell the pigs from the humans.”
Comment by AFSCME Steward Tuesday, May 1, 12 @ 11:34 am
I am two years from my city pension, I would think (hope) that Quinn’s plan is a start for bargaining and the employees/unions will respond with their plan and meet somewhere in the middle. While it stinks that the agencies didn’t make their match, we will need to pay more and get less to keep the pension going. It was so nice to see the Governor of the People Pat Quinn at the Sox game Sat night with four cars with him. Is he under threat of assasination? Let’s start with cutting the stupid wastes of money.
Comment by James the Intolerant Tuesday, May 1, 12 @ 11:36 am
Before they cancel retired workers health care how about going after the ones that collect one pension and works a few months and get a big bump up or even a second pension.No one in Springfield wants to talk about that because it’s their cronies.
Comment by Mike an Ike Tuesday, May 1, 12 @ 11:36 am
== Under the Quinn proposal, the cola would be one-half of CPI and not compounded. How many years of that would cut the pension value in half? ==
After 25 years, a 3% compounded COLA is worth about 50% more than a 1.5% non-compounded COLA. It’s not until year 40 that the 3% compounded COLA is worth twice the 1.5% non-compounded COLA.
Comment by cover Tuesday, May 1, 12 @ 11:40 am
And yes Highway Maintainers do make 75K without overtime.
Comment by Nieva Tuesday, May 1, 12 @ 11:40 am
Let’s move teacher pensions back to the home districts, and as part of the move, let’s give local school districts the ability to negotiate their own pension packages, allow them to structure salaries (say, science teachers are paid more, that sort of thing) and block grant state support of education funding based on some rational methodology, to the school districts to use as they see fit.
Comment by Cincinnatus Tuesday, May 1, 12 @ 11:42 am
best comment section in a while! p.s. I hate work!, but it looks like i’ll be hacking it out for 29 more years, i’m thankful for the small things, my job, capitol fax, dunkin donuts.
Comment by Spring Tuesday, May 1, 12 @ 11:43 am
===“states most vulnerable” vs “the greedy state worker.”===
Exactly where did I say state workers were greedy?
Comment by Rich Miller Tuesday, May 1, 12 @ 11:43 am
==I too beleive the public isn’t too sympathetic to the union’s whining.==
I think part of this is because public union leadership doesn’t seem to be willing to give an inch on some of the things that the public finds excessive - double dipping, the last year of salary overly influencing the amount of pension benefit, the minority who receive very large pensions.
Comment by Robert Tuesday, May 1, 12 @ 11:44 am
Here’s a simple way to look at the math, which has changed over the past decades because of increased longevity. Taxpayers and employees are funding a system at 10% for a time, say 20 years. We are then asking the taxpayers to pick up the retirement benefits for employees at 80% for the next 30 years. Sustainable?
Comment by Cincinnatus Tuesday, May 1, 12 @ 11:45 am
Much of the problem comes from the perception that state employment is some cushy, over-paid career where people show up late, take long lunches & leave early. That just isn’t the case anymore. The state of IL has become very lean, it is much more efficient & most state employees do 3-4 jobs each. If people truly think state employment is so great, why aren’t people lining up to apply for jobs in the public sector despite these tough economic times?
It used to be that the state could sell the pensions as a big benefit to incoming employees as a way to offset the lower salary that they’d be getting. However, the pension reforms of the last few years have minimalized that benefit & that’s not even considering what they are now talking about doing. As a result, the state really has almost no ability to recruit any young, college educated talent as a result of the pension benefit is so much less attractive, it taking them so damn long to hire & when they finally make them a salary offer, its often insulting. In the last 4 years, I’d say that my agency has been able to hire its 1st choice for the position less than 50% of the time. The candidate either turns down the salary or has already found other employment by the time an offer is made……it’s a shame that the state is often forced to settle for 2nd or 3rd best.
The state has not only handicapped itself in getting new, fresh talent into the employment ranks, but is now alienating the people who hold all of the institutional knowledge of the state. For those of you state employees who think things are bad now (which is most of them, because they are), things are going to get worse.
Comment by TCB Tuesday, May 1, 12 @ 11:47 am
YDD is also onto something. Eliminate the tax breaks, broaden the base, flatten the tax structure, lower the rates.
AND STOP SPENDING ON NEW STUFF. While we’re at it, stop passing new bills for a couple of years…
Comment by Cincinnatus Tuesday, May 1, 12 @ 11:49 am
lincolnlover
The rule of 85 was passed through union negotiations in a round about way. In the mid 90’s when the contract was up for renegotiation, the union wanted pension improvements. However, since the union cannot negotiate pensions, an agreement was reached that in exchange for no raises for a year, the pension improvement (& supposedly a formula to pay for it)legislation would be introduced and supported by the Governor (which I believe was Edgar at the time). It passed. They never paid for it.
As a side note, I recommended a no vote on this contract from the members I represented in my office (about 150 union members). My office voted no on the contract. When I called in my voting results to the union hall, I was greeted with suprise and dismay. “How could our workers not see how good a deal this is ?”
Union Hall: how do you feel now ??????
“Do away with rule of 85. It never made sense to me anyway.”
Comment by AFSCME Steward Tuesday, May 1, 12 @ 11:49 am
QUESTION: Is it true that AFSCME sued the state to fund the pensions in the 80s in order to fully fund the pension and the Supreme Court ruled against the union, saying that the constitution only guaranteed the pension, not how it would be paid? I read that in a comment section someplace and wondered if it was true. If the court had said AFSCME could force funding, then we would all have had to deal with real world funding — the pension benefits would have been adjusted down as conditions dictated and people wouldn’t have been stuck with a sudden change.
Comment by anon Tuesday, May 1, 12 @ 11:52 am
So, Rich what you’re saying is that public employees have to subsidize all the social programs, despite the State’s mismanagement? Blago/Quinn instituted all these new free programs, and now they can’t be changed.
Guy from Texas AG office told me this while ago, and it seems more and more accurate: no one has any respect for State employees. Fed civil servants: they’re OK. Higher paid municipal employees, just fine. State employees? what the heck do they do anyway? screw em.
Comment by park Tuesday, May 1, 12 @ 11:57 am
===So, Rich what you’re saying is that public employees have to subsidize all the social programs, despite the State’s mismanagement? ===
Um, no.
Comment by Rich Miller Tuesday, May 1, 12 @ 12:02 pm
I’ve been part of this system for 37 years and still have more to go. I do not disagree with Rich’s sentiment but this country and Illinois was built on the backs of workers not politicians.
I had never been pro-union until finally getting fed-up with the treatment of state workers starting with the Ryan administration and going down hill from there.
I believe most but not all of resident’s receiving Medicaid should get those benefits. Certainly something should be done to purge those not deserving out of the system.
The workers have done their part for the system, neither they or the needy should be penalized for wasteful government spending and corruption.
Comment by BMAN Tuesday, May 1, 12 @ 12:09 pm
Sorry, posted this in the IDOT thread by mistake earlier…
The fierce urgency of now. The state is in trouble now. The recession is now, and the state’s deficit is now. The majority of the pension underfunding is caused by the recession now. The majority of the problem with the vast increases in state pension payments is caused by the backloaded pension ramp now. Now, current spending needs to be cutback. Now, current revenues need to be increased; thank you temporary state income tax increase (state employees are paying that too). Now, medicaid needs to take some hits. And now, the state pensions need to take some hits…but the pension has a now component, but it’s mainly a program whose benefits are future costs. Would everyone involved in the pensions, be willing to give some skin now? I think they would, but we’re talking about gutting a program of mostly future benfits that many have invested in their entire working lives, NOW, and FOREVER into the future. Decades, in some cases over 3 decades. Those long term employees and annuitants don’t get a do-over, and those on fixed incomes can’t easily bite the bullet NOW, but they probably would agree to NOW, to get the state past this recession-caused financial disaster that is happening right NOW.
But now is fleeting. Most of the changes being proposed to the pension are permanent, effecting state employees and annuitants for the rest of their lives. During bad times, families cut back on expenditures; no more eating out; more pastas, and less steaks; they hold onto the old car longer; they make due to get past the bad times, but these bad times aren’t forever, and when this recession is past, and everyone has tightened their belts to get the state through the bad times, the right thing for the state to do, would be to restore the promises made to their employees that relied on them for the long term.
Many here are opposed to the pensions, unions, medicaid etc for ideological reasons. Their solutions will definitely work to get the state through the recession now, but will hit state employees well past now and far into the future. I’ll never go for a “solution” that solves the fierce need to save money NOW, that absolves the state (ALL of us) from keeping that promise once we get past these tough times.
I certainly don’t expect the hits Medicaid is taking now to be permanent. I’d bet anyone that they won’t be. Let’s look at asking employees and possibly annuitants to take a hit now, but let’s make it temporary. That’ll get the state through these hard times, but hold the state to the reasonable promises it’s made in the past.
Comment by PublicServant Tuesday, May 1, 12 @ 12:11 pm
I’ll throw out a pension solution. This is for TRS, since I know it well.
First, actuaries change their assumptions - lower the 8.5% nterest income to 7.5% interest income, lower the inflation assumption from 3.5% to 3.0%. This is all reasonable and in line with other pension systems - saves some $ on repaying the unfuded libaility.
Second, assume a reasonable State expense for pensions is a 2.5% increase each fiscal year from the 2013 figure. This is about $44 billion less than the current COGFA figure - TRS is about half the State pension mess, so about $88 billion less than current COGFA for all five pension systems.
Third, ALL tier 1 employees get 2.5% COLA rather than 3.0% COLA (including those already retired). Defend the constituional question with the change in inflation assumption descreased by 0.5%. This is the only benefit change, and no increase in pension rate to employees, either.
Fourth, school districts and community colleges kick in 1% of salary more in 2014, 2015, and 2016 - so by 2016 they are paying 3.58% of salary in.
Rough calculation is that the unfunded liability is completely paid off by 2046.
Hey - at least its a process that everyone gets a little skin in the game and sets a definition on what is affordable from the State.
By the way - I am in TRS.
Employees give a little on benefit to, what I beleive, is still a very reasonable COLA.
Local school districts have to kick in more - how they do it is up to them, can negotiate a lower pay increase.
State has to pony up the same % of the State budget as they are now- but it doesn’t get way out of hand in the future.
Comment by Archimedes Tuesday, May 1, 12 @ 12:15 pm
Union Steward. I was here when that rule was passed. I understand the history and the reasoning. I just don’t think it makes any sense. And, you are right. It was Edgar, Mr.-Knight-On-Shining-Horse-Republican, who started this whole mess by promising something in exchange for consessions and then never carrying through.
Comment by lincolnlover Tuesday, May 1, 12 @ 12:19 pm
Nothing new from me, just a repeat of what I’ve said over the past 3 or 4 years, but…
>current employees need to contribute more to their pensions-the 3% sounds reasonable
>current employees need to contribute more to their health insurance costs-probably around 20% compared to the current 5-6%
>retirees need to contribute toward their health insurance costs-I would think 20-30%of cost based on size of pension, maybe more
>something needs to be done about under 65 retirees healthcare costs, esp if they take QC, I’m just not sure what
>the COLA for pensions needs to be revised-I would suggest 3% or actual CPI whichever is lower
>for current employees Rule of 85 needs to be revised over 2 or 3 steps to Rule of 95 or age 62
Comment by steve schnorf Tuesday, May 1, 12 @ 12:19 pm
I understand but disagree with those in the private sector being upset with government employees. Private has been cut severely and public cuts have not been nearly as deep. Now you have those in the private sector upset because they perceive others as not feeling the same pain as they do.
When I started with the State back in the 80’s, similar private sector postions were much better paid than mine. I was not happy about this (being much younger and less wise) but I was assured by others that having a pension and healthcare offset the pay disparity. While I sympathize with others who have had benefits and pensions that they were counting on disappear, understand that rank and file government employees didn’t cause the problem. Now, those in the public sector are being asked to solve a pension problem that we had no hand in creating. I think that is rubs many of us wrong.
My proposed solution is to require larger pension contributions. This is something that I would not be happy (nor do I think is particularly fair) but it is a step that I would be willing to make.
Comment by Stones Tuesday, May 1, 12 @ 12:24 pm
My memory grows foggier with each passing year, but I don’t think the Rule of 85 and the pension pick up and the revision of the yearly accrual rate were done at the same time. I think they were done in 3 separate ones. Hank or someone help me here.
I think the pension pick-up, which Rod reversed, was done in Edgar’s first contract. I think revision of the accrual of credit for years of service was don in concurrence with the ramp-up legislation (’95), and the Rule of 85 in Edgar’s last contract.
Comment by steve schnorf Tuesday, May 1, 12 @ 12:26 pm
Your comment was spot on, Rich. I’m a retired state employee (37 years of service) & I totally agree with what you said. The time for pointing fingers is done. None of what I’m going to say is making me happy but I realize it needs to be done. Pensions s/be taxed, it’s not just state employees pensions that aren’t taxed, all pensions aren’t taxed in IL. So you have people that retired from some of IL big companies w/six figure pensions that don’t pay IL state taxes on those pensions. I’d also be open to paying for my health care. It can be on a sliding scale but EVERYONE should pay. Even if you only get $12K or $15K a year, you can still pay something towards your health care.
Comment by wiscgirl Tuesday, May 1, 12 @ 12:28 pm
Actually Mr. Schnorf, I’m not far from agreement with you except for the healthcare cost. I was comfortable with the scenario #4 in the Mercer report…I was also good on the 2 yr phrase in, but I can’t go a ’standard’ 20 to 30% across the board. Way too many differences in abilty to pay to consider. I come no where close to the ‘high’ pension range.
Comment by Cindy Lou Tuesday, May 1, 12 @ 12:33 pm
lincolnlover
I think the democrats learned how to govern from Edgar. He was a pioneer in the concept “Spend now, pay later”. The rule of 85 was just another example: promise more down the road, but no cost this fiscal year.
“It was Edgar, Mr.-Knight-On-Shining-Horse-Republican, who started this whole mess by promising something in exchange for consessions and then never carrying through.”
Comment by AFSCME Steward Tuesday, May 1, 12 @ 12:34 pm
Steve - I think you are correct. Those years of no pay raises were really bad. And the promises made were even worse, since they were, largely, not kept. Still, Rule of 85 has nothing to do with anything except unkept promises, so why not get rid of it and go to something more standard, like social security age retirement? For most state employees, it shouldn’t be a problem. It shouldn’t be a problem for most teachers, either.
Comment by lincolnlover Tuesday, May 1, 12 @ 12:35 pm
CL, actually I would prefer 3% of pension,,which directly reflects ability to pay, and would probably average in the range I suggested, with those with high pensions paying a much higher percentage of cost.
Comment by steve schnorf Tuesday, May 1, 12 @ 12:37 pm
steve schnorf
You are correct about the pension pick-up. That occurred in the late 80’s. It actually wasnot a bad deal for the state. In lieu of a pay raise, the state picked up the 4% we were paying towards our pension. If everything had been done right, this saves money. It did not add to the gross income of employees, so future raises were smaller. Also payroll taxes and life insurance costs would be reduced. However, when you don’t pay what isrequired the whole house of cards comes tumbling down.
If my soggy old brain is correct, the rule of 85 was in the mid 90’s.
“I think the pension pick-up, which Rod reversed, was done in Edgar’s first contract. I think revision of the accrual of credit for years of service was don in concurrence with the ramp-up legislation (’95), and the Rule of 85 in Edgar’s last contract”
Comment by AFSCME Steward Tuesday, May 1, 12 @ 12:41 pm
–why aren’t people lining up to apply for jobs in the public sector despite these tough economic times? –
Is there any public sector entity having trouble finding people to work there?
Comment by Ahoy Tuesday, May 1, 12 @ 12:48 pm
Well, Edgar’s first contract was ‘91 or ‘92, and that’s when the pension pick-up was done. I think 20 years rather than 8 for no cost health insurance was done in the 2nd contract, around ‘94 or ‘95. I’m pretty sure Rule of 85 was late ’90s, but, as I said, that’s getting to be far back in my memory. The reason I say late ’90s, I remember explaining it to a leader’s budget meeting, and I wouldn’t have been at one before the Fall of ‘97.
Comment by steve schnorf Tuesday, May 1, 12 @ 12:49 pm
Negotiations on these pension and health insurance issues is difficult. First, as Rich has said, administrations deny that they have to negotiate with unions on retirement issues. Second, unions can’t make public suggestions on potential agreements like a Governor or the GA can, or they end up negotiating against themselves. Third, the union wants to bargain with someone authorized to act, and with so many Admin and legislative ideas floating around, there is no such person yet. Fourth, the unions complain publicly and privately that they aren’t being allowed at the table. Also, the GA complains that some of the unions won’t come to the table. And, importantly, there is no one with whom the GA or the Admin can negotiate that speaks for retirees. So what we have so far is this messy public dialogue.
Comment by steve schnorf Tuesday, May 1, 12 @ 12:57 pm
Given the already passed changes (tier 2), there are only a few options left that will pass constitutional muster.
Alternative 1
As Rich and others have proposed, changing the 1995 ramp-up and funding goal is a vialable alternative. It took something like 40 years to get here; so revise the ramp-up to achieve it’s goal in, say, 2052. And make the goal 80% instead of the current 90%.
Alternative 2
If you won’t do # 1, then the other alternative is a tax increase of sorts. I know Rich said they are off the table but I view that as one of the fairest ways to fix things. As most of us know, taxes were too low the last 30 soem years, so we all contributed to creating the problem. If we want everyone who “benefited” from the low taxes to pay, the somewhat fair solution is to impose a 1% or 2% tax on retirement income, with all that revenue dedicated to only the pension backlog via a massive bond offering today that “fully” funds the entire pension backlog. Most the figures I have seen says the State could make the yearly pension payment; what is killing them is the catch-up for past underfunding. This has the advantage of solving the past underfunding in such a way the money can not be diverted. We still can’t insure the State will make the future annual payments fully and on time but it does get rid of the overhang. With that huge amount of money infusion to the pension systems, the investment returns should be higher than today and provide some assurance the funds will be solvent for the next 30 - 40 years.
Health Insurance
I will disagree with Rich on this item. It was the State’s decision to offer SERS employees free health insurance on retiement to stop a perceived brain drain and keep career employees. At first, the State offered it to people with as little as eight years of service and you had private industry people who retired early (lots of Bell Tel. employees in those days) go to work for the State for 8 years to get the insurance. Once the State figured out that was happening and how costly it was, they changed it to 20 years for new hires. Yes, medical costs have gone up faster than expected … but the State knew a long time ago how costly health insurance was and still decided to keep the 20 year deal as an incentive to keep employees.
I would not be opposed to paying a portion of the health insurance premium, but as I’ve pointed out before by citing my Comptroller statement, the Mercer report, and published bid results from HMOS like Helath Alliance, someone is cooking the numbers since none of them match or even come close. If I was still employed, I would be paying a portion of my health insurance. I would have no problem paying that same portion as a retiree. But that’s not what is being proposed; the numbers I’ve seen published suggest the State expects me to pay up to (or maybe more than) what the State claims it spends … they seem to have forgotten it is a group policy and want me to pay an individual rate.
According to the CMS web site, FY2013 Benefit Chocie Guide, current employee coverage (based on salary) costs per month from $47.00 to $59.50 for an HMO plan and from $72.00 to $84.50 for Quality Care. That level of payment would be fair and not unnecessarily burden most retirees. If the State wants to pass a retiree health payment based on the current employee payment rate, I’m for that … I’m not for the $600 to $1,100 a month proposals I’ve heard; that would blow a huge hole in my pension.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 1:00 pm
YDD, Cinci
How about means testing income tax breaks so we’re not giving breaks to those who don’t need them at a time we’re kicking poor people off of Medicaid?
Comment by reformer Tuesday, May 1, 12 @ 1:03 pm
My issue is that the public workers with pensions are the ones being vilified because the state spent the money it was supposed to match.
Part of my pension is filling a pothole somewhere, tied up in prescription drugs that couldn’t enter the US, or part of some tax credit given to Sears or CME or whatever. And now I’m being told that I should just accept it for the greater good.
I have no problems with taking a hit, but my money was used for everybody. Everybody should have to take a hit. Otherwise they’re just taking my stuff, giving it to someone else, and then saying ‘too bad, suck it up.’ How would people react if their social security contributions suddenly went up? Except those actually went down by 2% for the past couple of years.
Rich, I respect your writing and knowledge tremendously. I’m sorry to have irked you with these postings about pensions and will refrain from posting anything in the future (that sounds snotty, but it’s not meant to be).
Comment by Stuff happens Tuesday, May 1, 12 @ 1:13 pm
anon @ 11:52 am
Yes, that is true but it was the teachers (IFT) who filed the suit. The case was People ex rel. Illinois Federation of Teachers v. Lindberg Illinois Supreme Court basically ruled go away and don’t sue until the pension system misses a payment.
If you want historical context on the whole pension mess, see the report prepared for Cullerton. It’s available online a lot of places, here is one:
http://www.illinoissenatedemocrats.com/images/pensions/D/Pension%20Clause%20Article%20Final.pdf
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 1:15 pm
I think it helps to understand the pension expense has two parts - the Normal Cost and the Unfunded Liability. The former is manageable - under $2 billion per year. The latter is huge - $83 billion, just the interest cost (at 8.0%) is $6.6 billion a year; and that doesn’t pay it down at all.
Each year we fail to pay that interest on the UL - which has happened every year - the interest not paid is added to the UL and it grows.
On a practical basis, any feasible solution has to include some reduction of the UL, meaning a reduction of benefits already earned.
Comment by Archimedes Tuesday, May 1, 12 @ 1:20 pm
too many people still blaming the messenger in order to avoid dealing with the message
Comment by steve schnorf Tuesday, May 1, 12 @ 1:22 pm
Welcome to Wisconsin.
I actually gave up (first time on something I was interested in) trying to read all the comments. I am a State Retiree, retire less than a year.
I would be willing to give up part or all of my COLA before my Health Insurance premium costs. Logic to me is not to give up something you already have as opposed to not getting something you haven’t seen. Unions can (state local union leader for a decade) try and make Democrats pay for this but do you really want to see what the Republicans can do with our pensions?
Comment by Mouthy Tuesday, May 1, 12 @ 1:30 pm
anon @ 11:52 am
Should have added there were several subsequent cases but they basically reaffirmed the original Lindberg decision … it’s all in the document I referred you to.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 1:34 pm
Steve,
Roughly, what percentage of the state workforce is unionized?
Comment by Cincinnatus Tuesday, May 1, 12 @ 1:41 pm
Mouthy - Tuesday, May 1, 12 @ 1:30 pm:
The COLA is protected by Illinois case law (Judge’s COLA); your insurance isn’t. Why would you give up what is protected for a future promise that may or may not be kept? I don’t understand the logic …
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 1:41 pm
C, more than 90%probably 93-94% for SERS–wouldn’t be that high for SURS
Comment by steve schnorf Tuesday, May 1, 12 @ 1:46 pm
- Stuff happens - Tuesday, May 1, 12 @ 1:13 pm:
“I have no problems with taking a hit, but my money was used for everybody.”
And this leads back to something I’ve said before, wouldn’t things be different if it WAS your money. You know, your wealth and property instead of having an intermediary between you and your benefits.
I know that people have said that switching to a defined contribution/Social Security system would cost the state additional money, but there are several benefits that are real, but hard to measure.
Firstly, YOU control the money, it becomes your property that can be used by you in retirement or willed to your heirs.
Secondly, Federal law requires the State make its contribution, no ifs, ands, or buts.
Thirdly, the costs of the program are much easier to define (since they are based off the salary of the employee) which makes planning budgetary expenditures much more straightforward.
Fourthly, we minimize possible corruption within the pension investment arena (not saying there is within the pension system, but BrightStar comes to mind).
Fifthly, like there are no guaranties in life, there are no guaranteed returns on investment.
Sixthly, the State employees would not be subject to the schism between the taxpayer and the employee, minimizing the entitlement feelings most taxpayers feel toward the employee.
Reformer,
I’m in on eliminating tax breaks for individuals, just like for businesses. Snap a lower level of income which is untaxed, index that level for inflation, and tax everyone the same.
Comment by Cincinnatus Tuesday, May 1, 12 @ 1:57 pm
Steve,
Thanks. I was hoping for about half that figure…
Rich,
Best thread in a long time, and unless you are editing heavily, little to no whining! Plus the posters have generate 20 items that should be seriously considered. Task Force!
Comment by Cincinnatus Tuesday, May 1, 12 @ 2:03 pm
@ Retired Non-Union Guy - 1:41pm
I believe that court case only protects Judges’ COLAs, but not everyone else. I remember researching this issue, and the Court based their decision on its “inherent power to administer the courts in the State.” I know, it sounded arrogant to me when I read it too.
Anyways, if the Court was to require COLAs for SERS, SURS, and TRS retirees to be paid, I would think that would be a separation of powers issue. Only the GA gets to spend money. Whether they spend it wisely is a different question.
Comment by Four Red Stars Tuesday, May 1, 12 @ 2:07 pm
I think part of the problem is that there is no way that I know of for the average person get all of the facts in one place. The state puts its spin on numbers one way and the union has yet another spin. Is there somewhere to go to get that information? Also does anyone remember the name of the website that the governor put up to recommend ways to cut state costs? There were a lot of good ideas out there.
Rich,
I appreciate reading this site and have never commented before now. This is where I usually go to get my information because it seems to be the most accurate.
Thanks!
Comment by not exactly sure Tuesday, May 1, 12 @ 2:09 pm
I’m going to echo Sunshine’s comments above -
Cut the perks to all elected officials and put everyone on the same Health Care and Pension Plan. Nothing more for those serving or having served, including Judges, than the lowest State Employee or Teacher.
Eliminate, through consolidation, some State Agencies.
Severely curtail state travel, eliminate state vehicles, and cut legislative perks and retirement plans.
Last but certainly not least, and maybe most importantly, stop accepting new Federal programs which require matching funds and eventual ownership of the program by the State. I cannot stress howmuch money is wasted this way.
Require that all programs must be fully funded to end of life or they cannot be approved.
We’re talking huge savings here, folks.
Comment by Hunterdon Tuesday, May 1, 12 @ 2:11 pm
steve schnorf
It was somewhere before the time that Public Aid became part of DHS. We were in Local 2000 then, seperate from Council 31. After Public Aid was absorbed into DHS, Local 2000 was disolved into Council 31. I rember calling Local 2000 with the results of that vote for my office.
“Well, Edgar’s first contract was ‘91 or ‘92, and that’s when the pension pick-up was done. I think 20 years rather than 8 for no cost health insurance was done in the 2nd contract, around ‘94 or ‘95. I’m pretty sure Rule of 85 was late ’90s, but, as I said, that’s getting to be far back in my memory. The reason I say late ’90s, I remember explaining it to a leader’s budget meeting, and I wouldn’t have been at one before the Fall of ‘97.”
Comment by AFSCME Steward Tuesday, May 1, 12 @ 2:11 pm
Cincinnatus @ 2:03 pm:
That union figure for SERS was driven up by the last 10 years of worker abuse by the administration. The PSA title used to be non-union, now almost every one of them are in the union. About the only non-union titles left are SPSA and director / deputy director / bureau chief.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 2:28 pm
RN-UG,
In your opinion, what percentage of the workforce should be considered exempt/non-exempt?
Comment by Cincinnatus Tuesday, May 1, 12 @ 2:40 pm
Four Red Stars @ 2:07 pm:
Yes, that case was Judge’s only but (a) it is a precedent and (b) you would think most of the same diminishment logic would apply. If I remember, w/o looking it up, that decision also relied on New York decisions that, I thought, protected employee COLAs there.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 2:41 pm
I;ve got some great solutions…………since public education and educators can’t do anything right (so the public says), an teacher pensions are causing so many problems, lets just close all the schools (rather than the prisons) and everyone home schools (because it’s such a simple job!). Secondly, let’s start talking about cutting social security (or are those people entitled to their payment because they paid their fair share! HAHA). Thirdly, no, not everyone has to take a hit. Ty Fahner and the 1% cronies aren’t taking ANY hits! They stand to gain from “pension reform”. It’ll be a goldmine for them. So watch it when you say “everyone” has to scale down.
Comment by allen Tuesday, May 1, 12 @ 2:44 pm
Cincinnatus @ 2:40 pm:
If you mean non-union, today only about 5%, pretty much the same as Steve’s number. I would guess all the PSAs that piled in the last 10 years would make up maybe another 15% - 25% … but I want to emphasis that is only a guess.
I’m not sure exactly what you mean by exempt; under State personnel rules that has a couple of different meanings. If you mean how many should fall under, for example, the Vinson bill requiring appointment by the Gov. to their positions, then that level is around the 5% non-union today. Under the Vinson bill, most SPSA’s had to be appointed to 4 year terms (and reappointed every four years); a few who did not manage people could, after appointment, apply for a technical exemption to the Vinson bill but that was a very limited set of people.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 2:51 pm
TCB 11:47
The ironic part is that all those “long lunch/leave early” employees are the ones enjoying the generous pensions that cannot be touched & we can no longer afford.
Comment by Original Rambler Tuesday, May 1, 12 @ 2:53 pm
C, it was about 80% union 10 years ago
Comment by steve schnorf Tuesday, May 1, 12 @ 3:04 pm
Thinking along these lines, RN-UG:
www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf
Comment by Cincinnatus Tuesday, May 1, 12 @ 3:06 pm
C @ 3:06,
I can attest from personal experience the SPSA’s were exempt from the Fair Labor act. Worked many nights & weekends on “must have” projects. The non-union PSAs (there are still a few left) also are exempt.
Long, long ago all the PSA’s used to fall under that category but it changed and it was fairly common to have PSA’s getting overtime and out-earning their SPSA bosses by 20% - 30%.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 3:15 pm
Well said Rich -
1) Get legislation passed that prohibits legislators from “borrowing” against any pension funds other than their own. That stops further bleeding.
2) Unions need to be open to the concept of a phased in approach which gradually steps towards 67 and perhaps gives a minimum step-out of 60 for those that are “close” in current structure.
Frankly, a gradually “step up” needs to be done nationally to save social security long term. No career politician wants to touch that one with a 10 foot pole.
Comment by Just the Facts Tuesday, May 1, 12 @ 3:22 pm
I’m sorry Rich that you are tired of state employees complaining. First off, I agree that the union is not helping with solutions; same as it has never exerted itself to resolve worker problems with the state. AFSCME is not creative and just wants worker dues for way too little work. Morale is at bottom in state agencies because the union does not know how to advocate and protect workers while resolving the many agency inefficiencies which exploit workers. With one of the smallest state workforces, the state has successfully plied more of it’s responsibilities onto the backs of current workers without union opposition.
State pensions costs are out of whack primarily due to the pension extravagenatly paid pensions of a few; not the many. Since everything is going to court challenge anyways, it might have been more equitable for the union to suggest to cut and cap the highest pension for current and past drawers. They are the ones who have had a free draw from the trough with high pensions and additional draws from rehires after retirement. Oops, if the union suggested that, it would touch some of them directly too.
Assumptions are always that state workers are well-placed and not in harms way. Most of us may be okay, but there are many of us who are either single head of households without a second income, older with no additional job prospects, and who have serious health issues we got from our state jobs. After 9 years at the only pension job I qualified for, I look forward to $800/mth pension. I do not qualify for free health care, and my bad carpal tunnel, age, and limited education make it difficult already. So, cut pensions; fine, but where is the equitable solution?
Comment by Sue Tuesday, May 1, 12 @ 3:31 pm
Just the Facts @ 3:22 pm:
There is no legal way to enforce your proposed #1. That is the crux of the problem and how we got in this mess.
The phase-in makes sense … you’ll have to pick some cut-off age, like currently being 45 or 50 or 55 … and that’s where it could get sticky. Personally, I think the employee should be given at least 10 years to adapt their finances to the changed conditions. Since state employees under the current system can retire at age 60 pretty much without restriction, I would suggest grandfathering in anyone who is age 50 the year the legislation gets passed. Set 40 year olds to age 63 1/2 and 30 year olds to age 67 (if 67 is your goal).
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 3:35 pm
steve @ 12:37 pm:
I can see where a 3% level would make a lot of sense. It does means testing and it should be an easy sell to the retiree; basically it means the retiree “loses” their COLA for one year. The union ought be be able to sell that one; especially if the change is implemented on Jan 1 just like the COLA.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 3:41 pm
Retired Non-Union Guy - Correct, it would be like asking the foxes to police the hen house. They would have to propose, support, and pass legislation. Which, by the way, some states have done.
Comment by Just the Facts Tuesday, May 1, 12 @ 3:43 pm
re myself at 3:41
I was referring to a 3% charge for retiree health insurance … lost the first sentence somehow
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 3:44 pm
Just the Facts - Tuesday, May 1, 12 @ 3:43 pm
It has nothing to do with politics and everything to do with law. (Although you are right, the politics would prevent it.)
A current General Assembly can not obligate a future GA to make a payment. The only legal way to do so is float a bond issue which the State is obligated to repay, period. That’s why, in my alternative #2 @ 1:00 PM, I included the bond issue as part of the solution.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 3:48 pm
I would also advocate for a couple of years freeze on COLAs for anyone retired in the last 10-15 years (maybe anyone at or over 105% of original purchasing power). We’re way ahead of inflation on our pensions. I can’t quite figure out how that could be done legally, but I think it would be a sensible way to help address the problem.
Also, I just had a thought on QC for non Medicare eligible early retirees. You could do a high deductible (say $1000 or $1500) That would certainly drive many people who could from QC to managed care. On the other hand, it would almost certainly be the less sick who would leave which means average cost for those remaining would go higher. I don’t know if that would be a zero sum game or not.
Comment by steve schnorf Tuesday, May 1, 12 @ 3:53 pm
OK. Here are some ideas to help solve a problem that state employees never created:
1. Reduce pensions of all those special cases (Molaro etc.) so that they are commensurate with the pensions that the rest of us mopes will get. This is not a big fix, but it’s needed.
2. Reduce pensions and all retirement benefits of all current and past members of the general assembly.
3. Transfer assets of the state, including, for instance, highways and bridges, to trustees for the pension funds, who have authority to manage and lease these assets for the pension beneficiaries.
4. Restructure all pension board so that they are controlled by pensioners and employees; cap monies that they pay to financial advisors and money managers.
5. Stop claiming that healthcare is not a protected benefit in all cases. Look at the law and the facts as they apply to each pension system and each annuitant. Recognize that there is no one size fits all solution - no matter how much Quinn’s people might wish there were.
6. Make general assembly pension/healthcare benefits equal to all others who work for the state.
7. Recognize that the courts who have looked at the matter in the U.S. have found that pension and healthcare benefits are the equivalent of deferred compensation. If you want to diminish them for current employees, then you will have to provide true consideration, such as a reduction in hours, increase in wages (with no pension effect), etc.
Comment by chicagopublius Tuesday, May 1, 12 @ 3:55 pm
steve @ 3:53
re moving people from QC
I still think, for the retirees who leave the State permanently, there could be a way to get a reciprocal health insurance agreement with an HMO in their relocated area. I realize that goes against the insurance companies who have limited themselves to one state in order to cut the best deal they can in each state.
Maybe the solution, instead of dealing with the insurance companies, would be to deal directly with other state governments and “transfer” the out-of-state retiree to one of that state’s insurance plan and pay the cost there for an HMO. It might be worth exploring with, at least, the common locales for Illinois retirees.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 4:10 pm
I’ll add another tweak to the list: stop calculating the monthly pension amount on base salary PLUS overtime. I didn’t realize this was the case until a few years ago. I’m not aware of any other pension systems that calculate their monthly pension amount to include the overtime. Management always preached that you shouldn’t budget with overtime in mind. The State has used and abused overtime for years, and this change will obviously affect ISP, IDOC, IDOT, and the IT community the most. However, this are also the higher-paid positions, and the ones with the sweeter formula for high-risk jobs. I wonder what the dollar savings would be if this calculation were changed?
Comment by Anonymous Tuesday, May 1, 12 @ 4:14 pm
I do not have time to wade through all 114 comments to see if anyone has mentioned this, but in case no one has…
Rich, you are confusing Medicaid with Medicare. Medicaid is government-funded health care for the poor. Medicare is government-funded health care for retirees (or anyone older than age 65). So when Rich Brauer is talking about cutting Medicaid benefits, that does not involve benefits for retirees or senior citizens.
The four state legislators quoted in the article talked about cutting Medicaid, not Medicare. And the only “cutting” they mentioned was cutting ineligible people from the rolls and eliminating fraud. And yes, there is a lot of fraud (some of it committed by doctors, which does not get reported much).
So if you are going to write about the state “kicking tens (even hundreds) of thousands of some of Illinois’ most vulnerable citizens (elderly and the poor) off Medicaid programs, it’s really tough to totally sympathize with public employees,” and then lecture state employees who complain that “the state screwed up so you should now be spared any cuts at all,” and then nobly declare that it “just doesn’t pull at my heart strings,” you should really be clear about what Medicaid is, and is not.
Finally, the excerpt from the SJ-R you used is misleading. The middle paragraph is an indirect quote from Brauer about Medicaid savings. But the direct quote immediately after is about the pension system. What or who does “They’ve” in the first sentence refer to? Is Brauer saying that Medicaid recipients use the pension system as a credit card, or that the General Assembly uses it as a credit card?
Yes, that’s the SJ-R’s fault, but if you’re going to use it, you should maybe find out what is really being said.
Comment by spd Tuesday, May 1, 12 @ 4:22 pm
–Rich, you are confusing Medicaid with Medicare. Medicaid is government-funded health care for the poor. Medicare is government-funded health care for retirees (or anyone older than age 65). So when Rich Brauer is talking about cutting Medicaid benefits, that does not involve benefits for retirees or senior citizens.–
spd, you really should get the facts first before calling out the host.
From Kaiser:
–While Medicaid was created mostly to provide medical care to low-income moms and their kids, two out of every three Medicaid dollars is spent on the elderly and disabled. Last year, the program spent one-third of its budget — more than $100 billion federal dollars — on long-term care, either in nursing facilities or in the community. States, which share the program’s cost, spent tens of billions more.
Overall, Medicaid pays more than 40 percent of all long-term care costs. The advocacy group FamiliesUSA estimates that more than 6 million seniors and nearly 10 million younger people with disabilities rely on the program for assistance.–
http://www.kaiserhealthnews.org/columns/2011/may/051811gleckman.aspx
Comment by wordslinger Tuesday, May 1, 12 @ 4:31 pm
Yes, wordslinger, I knew that, thanks. It doesn’t change the fact that Rich’s post failed to make a distinction between the two.
Comment by spd Tuesday, May 1, 12 @ 4:44 pm
spd, great idea to cut fraud. I didn’t know that was a line item.
How come no one thought of that before?
Comment by wordslinger Tuesday, May 1, 12 @ 4:50 pm
Is it feasible for the State to align itself with a group like AARP and its insurance partners to offer a Medicare supplement policy, for those retirees on Medicare, at a cost that would be less than the cost of QC? This would take care of the issue of retirees staying on QC because they live out of state or travel regularly out of state. I have heard that there are several supplement plans that simply pay what Medicare doesn’t.
Comment by Curious Tuesday, May 1, 12 @ 4:54 pm
Having solved these problems, I suggest we move on to poverty, hunger, and world peace, each of which may well be easier.
Comment by steve schnorf Tuesday, May 1, 12 @ 5:11 pm
- complete an audit targeting the largest pensions
- Review the highest cost per contribution pension funds
- All pension plans/funds should be equal (elected officers/surs/sers/etc) : the ones with the current (greatest) deficits should incure the largest cost/changes: For future pensions plans a change for increases shouldn’t be allowed without approval by the voters. All pension formulas need to be reviewed and adjusted to be equal for all systems. SSI does not provide 80% of currents pay
* Medical insurance should not begin until the employee is no longer working; if income is above a set margin it should be reduced accordingly
- Tax pensions/SSI if it is above a certain range- (may cause more people to move to Florida)
- Be realistic 100% of the pension cost does not need to be funded
- Another plan must be developed (with another sponsor) as Quinn has no creditability with the workers
- Before any of this happens a review of the non-union workers has to occur- loss of pay over several years: How can they continue to be the only ones without a voice.
-Review all retiree sweetheart deals (ie today’s paper, four year of inflated salaries, city college presidents/chancellors/university presidents), audit and recalculate without the scams)
-If someone is receiving pension(s)/other income above a threshold while working, the pension should be reduced on a formula basis - not talking about someone with a 30,000 pension making 15,000 to cover medication.
- Multiple pension from SERS/SURS/etc should all be reviewed.
- One department/group managing all pensions reduction in overhead, easier to audit, easier to track the people who double.
- non-state of illinois employees need to be covered by their districts/community groups
Comment by Anon Tuesday, May 1, 12 @ 5:34 pm
Using DHFS data for FY 2010, the average cost of providing healthcare to retirees in a Managed Care plan is about $500 a month more for a non Medicare retiree than for a Medicare retiree. The difference is about $630 for retirees in the Quality Care plan. These data seem to indicate that something should be done to (a) discourage early retirement and (b) limit the benefits to retirees in the Quality Care Plan to those provided to retirees in the Manage Care Plans. Why not require people who retire before age 65 to pay the Medicare Part B premium, currently $99.90 per month? The premium would be adjusted for income as the feds do. These retirees would not, of course, be eligible for Medicare but this payment would help defray the cost of providing their healthcare. I don’t how to contain the costs of the Quality Care Plan but it clearly is not cost effective. Maybe the premiums should be increased. Retirees in Managed Care plans should not be paying for the higher cost of providing Quality Care to other retirees.
I don’t how many retirees this suggestion would affect but all retirees 65 and older should be required to enroll in Medicare Part B. Currently they are not required to enroll in Part B if they are not eligible for free Part A. This would affect folks who do not qualify for Social Security benefits on their own or their spouse’s work history. ( All Americans 65 and older are eligible for Part B regardless of their Social Security eligibility.)
Comment by capncrunch Tuesday, May 1, 12 @ 5:35 pm
An awful lot of good suggestions here on how to address the problem. However, many, or most, will become moot very quickly if they don’t stand up to judicial review. Similar experiences in other states look to indicate many of these “remedies” will not make it through the courts intact, and a court challenge is a certainty. Seems to me the lawyers for both sides need to be talking to avoid that. If the “remedy” isn’t upheld, we’ll be right back where we are now, only deeper in the hole and with even less time to climb out. Are there any past members of the bench that can offer some insight? Not that anyone is listening at this point.
Comment by The Whole Truth Tuesday, May 1, 12 @ 6:13 pm
Why can’t we tax pensions on those above a certain threshold? These people still use state services. Also, what keeps the GA from taxing those with excessive pensions at a high rate? As a member of TRS I am down right angry and will work to get all who have been in office during this bumbling out of office…but I am open to discussing ideas to improve and preserve what I have worked to build. Increased contributions to a point …but what is my guarantee the state won’t send this somewhere else? Increased retirement age?…I am afraid this will hurt school districts as payrolls grow.
Something is wrong when the guys who write the rules don’t live by them.
Comment by DoubleD Tuesday, May 1, 12 @ 6:15 pm
@Reformer-
I think a means test for taxing individual pensions makes sense. I’ve suggested $100K and up, but we can dicker.
The problem with “means testing” for corporate taxes comes down to quantum physics. Bear with me here. The individual is the smallest indivisible unit of self-interest. Corporations may have the overall purpose of maximizing profits, but they are comprised of thousands of individual self interests.
So what happens in the real world is this: we about a reasonable law that only taxes companies that make more than 100 widgets. The VP of Accounting argues for an increase in his budget so that he can cook the books to show that the company only made 100 widgets, not 105. The VP of Legal will argue for an increase in his budget so he can argue that five of those widgets were actually “wadgets” in court, and the VP of Public Affairs will argue for an increase in her budget so she can lobby to raise the cap to 105.
At the end of the day, the CEO will gladly spend $99 to save $100, for a net gain of a dollar.
If we’re to have a means test for corporations, it should be a standard deduction based on the number of fulltime employees in Illinois earning a living wage. And I would counterbalance it with an alternative minimum tax similar to the Buffett tax for companies grossing more than say, $10 million per year.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 6:17 pm
@Team Sleep-
Some would argue that atleast part of the problem with Social Security and Medicare is that we cap the payroll taxes that fund them so that folks making more than $100K a year pay less than there fair share.
Others would argue that allowing guys like Mitt Romney to reap billions in compensation without paying into Medicare and Medicaid simply by calling that compensation “capital gains” also contributes to the problem.
I am both of those people.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 6:23 pm
Yellow Dog, you are RIGHT. We, as a society seem hell-bent on kicking the little guy, especially when he’s down. ala Medicaid cuts, mentally ill patients treatment centers and the rank and file public employee. The public pensions of some–and particularly our legislators are outrageous–everyone will agree to that. But why are we trying to screw the average retiree, receiving 40 or 50K? And folks, remember that the pension is ALL these people get—no social security, and never made the big bucks to have retirement savings. Pension reform needs to focus on the big hogs……pay full state income tax over a designated amount……for those receiving a certain amount, pay higher cost for health care!
Don’t lump every pensioner as the same…………..there are major/massive differences and the state would go a long way in reaping benefits if they cashed in on the big boys, not the average working stiff who may have to seek assistance from the state to live.
Comment by allen Tuesday, May 1, 12 @ 6:37 pm
Could we not save some money by having some sort of limitation for paying medical costs for men and women who start having babies at 18 and stop at 40 and are able to get free medicaid coverage until the last one is 18?
Comment by Just Wonderin Tuesday, May 1, 12 @ 7:46 pm
allen @ 6:37,
Your points are valid and the State does need to go after the hogs. May not be able to do anything because of the laws that were in effect at the time; a lot of those loopholes have since been closed.
The real problem is, while the big hogs make the headlines, they really only add up to a small amount of dollars in the total scheme of things like the State budget. Follow the money. The big money is found by getting a little from everyone.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 7:56 pm
YDD @ 6:23 pm:
While I agree the cap on SS taxation should be removed, Social Security was never intended to be a straight pension system. SS is partly a pension system and partly a welfare system designed to ensure a minimum level of income for the elderly low income worker of 10 years (40 quarters). If you look at the benefits received versus amounts paid in, it gives a heavier weighting to the first so many percent of income and much less weight to the last 20% or so of income. That, I’m sure, is where the argument for capping the contribution came from … additional contributions weren’t “buying” the contributor anything.
Because Rich didn’t want any whining, I will refrain from listing all the broken Federal promises re SS but simply say that, to date, the State has done a better job honoring their pension promises.
Comment by Retired Non-Union Guy Tuesday, May 1, 12 @ 8:22 pm
I’m commenting late. I have seen only a few comments that remark about the structure of the various proposals-which I believe passes the buck, kicks the can, onto the FEDS and minimizes the inflation that even our President’s friend billionaire Warren B. says is coming. The State avoids insurance costs-passing it onto Medicare (with a 2 year cushion I believe). Many of us have read what shape Medicare will be in in a few years. The current compounded COLA of 3% is vastly eroded. In a few years, on paper at least, government will be obtaining revenue based on inflated income and sales taxes, while making payments in diminished dollars. Many of the proposals being discussed get the State off the hook from the consequences of an inflated economy.
I’m old enough to remember that LBJ and Jimmy Carter were criticized for causing inflation, and that Nixon (who really made some errors in his efforts to deal with the economy {Wage Price controls}), Ford, and Reagan, had to deal with it. {I’m trying to sum up 45 year history, not make a partisan statement.}
Anyway, the structure of these proposals troubles me.
I personally have a lot to lose in this matter. Like many commenters before I’m sure I will be disadvantaged. But the structure and implications of these proposals, coupled with “assurances” from the CMS Director, Quinn’s reliability/consistency/competency quotient that has been highlighted on this Blog too many times to count, makes one wonder.
I tried to make some thoughtful comments. Given the heat of this topic, I hope I was civil.
Comment by No Dogs Tuesday, May 1, 12 @ 10:39 pm
===Rich, you are confusing Medicaid with Medicare.===
No, I’m not. You’re obviously confused about what Medicaid actually does.
Comment by Rich Miller Wednesday, May 2, 12 @ 6:57 am
Sorry for the late post. Here’s my suggestions.
1. Recognize this disaster was decades in the making and cannot be solved in one or two years. 2. Allow any state worker to pay up to five years of service into the system with the understanding the Rule of 85 would be changed to the Rule of 90. This would add some much needed capital now.
3. Re-claculate the payback to be realisitc. The fund will never need to be 100% funded because not every state worker will retire at once. Don’t load the payback for later years.
4. Stop the political BS and work together to see if perhaps some bonding now will be less expensive in the long run. 5. I agree with a recent SJR letter writer that the constitutional amendment Madigan proposed should be changed so it takes a super majority to NOT make the annual payment.
Comment by past the rule of 85 Wednesday, May 2, 12 @ 7:57 am
I am with Rich on this.
This has gone on long enough and been talked to death.
Time now for the G.A. to do something, anything and let it hit the Court system. Then figure out what you can do from there.
I have said before I think the G.A. will try to spread the pain. A little to the public workers,the taxpayers and social services. Now I wonder if they are not checking the math and thinking of going another way.
Organized labor portion of overall workforce maybe in the 15% range. Public workers as percentage of IL population? Who do I worry about come election time? Surprise they have already came for the trade unionists and your support group is working at Micky Ds.
Comment by Bemused Wednesday, May 2, 12 @ 8:17 am
Rich: I’ve been thinking about this post for the last 24 hours or so; I initially agreed with your argument, but I’m not so sure I do anymore on the basis of the following points:
(1) Fairness: Yes, I know this has been talked to death, but AFSCME has a point. Let’s say you’re a house painter and are hired to paint a McMansion. You’ll furnish the (custom-mixed) paint and your time, and your client will pay you by installments–with the last big chunk due when you finish it up. So you work (more or less) steadily at the job–looking forward to the day that you finally get to recoup your investment in the project of time, sweat, and capital. One day as you’re close to finishing the client calls and says that he’s blown through all his savings at Vegas and can’t possibly afford to pay you and feed his children at the same time. And, because he’s insolvent and you’re solvent, feeding his children is therefore your responsibility, and your reassertion of your contractual rights is dismissed as only so much whining. Obviously your client needs to feed his children, but his negligent slide into bankruptcy should not pull you down the same slope through no fault of your own.
(2) Future investment: Yes, the state’s existing obligations to current employees and retirees are a huge part of this issue. But it’s not the only, or even (I would argue) the most important part of the puzzle. We have (rightly) focused a great deal of attention on the state’s bond rating, because that shapes our ability to borrow financial capital. But state governments are not built on financial capital alone (though you can never have too much of the latter): they are built and sustained through the investment of human capital—lent to the service of the state and financed by wages and benefits. It is a mistake to expend so much effort on attracting one type of investment that we render ourselves unable to attract the other.
Here in Illinois we tend to forget the fundamental purpose of public employment: not as a benefit to a select few who manage to get hired by the state, but as a way to make sure that the public’s work gets done as well and as efficiently as possible. The reason that the old patronage system was bad was not that it wasn’t fair in the hiring process (why shouldn’t loyalty and a solid work ethic matter more than the abilities one was born with through no fault of one’s own?) but that it lost sight of the fact that a public bureaucracy must be more concerned with the needs of the public than the needs of the bureaucracy.
How do we expect to attract the talent we need to run the state well (particularly with the threat of mass retirements looming overhead) if the state cuts and runs from its contractual obligations to pensioners and takes out its budgetary frustration with past generations on the generation whose responsibility it is to fix the state’s problems? In an economic downturn it shouldn’t be hard to find warm bodies to fill desks (any job, regardless of how poor the benefits, beats unemployment), but I’m not convinced that this is a recipe for effective governance.
(3) Recognition of shared sacrifice: So existing employees are going to take a hit in their retirement benefits compared to what they are contractually and constitutionally entitled to. That’s unconscionable. And new employees can expect to do more work for less thanks and less compensation than their parents and grandparents did? That’s even worse. That said, those of us who regard public service as a civic duty and a God-given calling will buckle down and get the job done anyway.
No, it’s not fair that our generation is having to pay for past generations’ mistakes while paying their still-generous retirement benefits while not having much to look forward to ourselves. But we aren’t the only generation to get handed a raw deal. We, after all, didn’t live through two world wars, the Spanish Flu, and the Great Depression. Selective Service registration for us was simply a formality, and the only way we would end up in uniform is if we volunteered for it.
We’ll make whatever sacrifices turn out to be necessary—for our country’s sake, our state’s sake, and our children’s sake. But it would really help if the existence and reasons for these sacrifices were made a larger part of the public dialogue on this subject: any sacrifices we make are not the result of our being lazy, incompetent, or not deserving of better treatment than we’re getting, but the result of our patriotism, our commitment to public service, and our determination to shoulder an extra burden if it means taking the weight off fellow Illinoisans who can’t shoulder theirs.
Comment by JCE Wednesday, May 2, 12 @ 11:48 am