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* From Rep. Jeanne Ives’ campaign…
Last week, a Fitch Ratings report determined that Illinois is the worst in the nation when it comes to pensions as a share of residents’ personal income. Under Fitch’s calculation, Illinois’ total debt – defined as net tax-supported debt and net pension liability – amounted to more than 28 percent of Illinois residents’ personal income. The average in other states is 3 percent. State Representative Jeanne Ives, a Republican Candidate for Governor, released the following statement:
“The Fitch Ratings report that Illinois’ unfunded pension liabilities equaled 22.8% of residents’ personal income last year, compared to a median of 3.1% across all states and 1% in Florida, explains why Illinois’ economy has been stagnant, growing a meager 0.9% on an inflation-adjusted annual basis since 2012—the slowest in the Great Lakes and half as fast as the U.S. overall.
“Illinois finances and fiscal policy aren’t just bad, they are extreme and immoral. Illinois families and businesses contribute billions of dollars each year to both local and state pensions, yet the state’s unfunded liability continues to rise, despite increasing contributions and a favorable stock market. Currently, pension payments eat up a full quarter of our state budget.
“After his election, Benedict Rauner was quick to abandon us in the fight for pension reform. While some in Springfield chose to ignore his betrayal, it did not go unnoticed by the ratings agencies. And once the junk ratings come, it will be too late to reverse course without an enormous amount of pain to taxpayers, state retirees, and the state’s most vulnerable citizens.
“I urge Governor Rauner to join me, and many of my colleagues in the General Assembly, in taking thoughtful and transformative action on the state’s most pressing issue. One of the first pieces of legislation that I filed as a state legislator was a bill to bring about major reforms to our pension system (HB 3303, 2013, 98th ILGA). Our pension system is the state’s most urgent budget issue. It must be solved to save our state and our cities.
“These three initiatives must happen simultaneously:
Pass a constitutional amendment to change the pension protection clause in Article VIII, Section 5 of the Constitution of the State of Illinois, which states that pensions cannot be diminished or impaired. This change will ensure taxpayers are not on the hook for pension obligations on services not yet rendered.
Require all new hires to enter a 401K-stlye self-managed plan. This provides the flexibility and ownership of assets that is prevalent in our private sector and relevant for our modernized employment system where job mobility is important to workers. As well, the US Military is shifting to this plan for all military personnel.
Re-negotiate pension obligations with current workers and retirees. Many of these plans will either be insolvent or require confiscatory taxes that cannot be paid. We must have an honest conversation, as Rhode Island politicians had with their pensioners, in order to solve this problem once and for all.
“The plan I am proposing ultimately restores fiscal order to the state by eliminating unsustainable pensions and unfunded liabilities. This paves the way for the economy to flourish, fostering an environment where businesses can thrive and create the jobs Illinoisans need.”
It’s an individual guarantee, so they’d have to negotiate with every worker and every retiree, unless they can come up with another way to accomplish the same thing.
posted by Rich Miller
Tuesday, Dec 19, 17 @ 2:05 pm
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‘Ideas by Ives’. A new campaign theme. Much better than ‘ I am not in charge’ or ‘because Madigan or Trump’.
Comment by Blue dog dem Tuesday, Dec 19, 17 @ 2:09 pm
I mean, how many times can the Supreme Court say “no”?
Comment by Michelle Flaherty Tuesday, Dec 19, 17 @ 2:09 pm
I really don’t get the infatuation with stealing the average person’s pension. Most state workers are doing the best they can with the nothing they get to do it with. They are honest people that just want what they were promised from the state. And a great many of them hold on just for pension, even when the job is killing them. The Kurt Granbergs of the world have jaded so many people.
Comment by Ducky LaMoore Tuesday, Dec 19, 17 @ 2:11 pm
Okay, fine….so you move all new retirees into a 401k style plan, I get it. This idea polls very well.
So once you pass that legislation, how do you continue to fund the current pension system? Or by passing the Constitutional Amendment do you just eliminate their pensions entirely and say, “It’s your fault you worked for such a messed up state?”
Comment by Just Me Tuesday, Dec 19, 17 @ 2:12 pm
Why propose anything that will never get passed.
Comment by Anonymous Tuesday, Dec 19, 17 @ 2:13 pm
“Pass a constitutional amendment removing the pension language” isn’t a campaign proposal, it’s a fever dream.
Governor Ives wouldn’t be any more empowered than State Rep. Ives to get 2/3rds of both chambers to pass that. May as well throw “amend the constitution to abolish all unions and state that life begins at inception” into her campaign platform while we’re at it.
Comment by PJ Tuesday, Dec 19, 17 @ 2:13 pm
===Pass a constitutional amendment to change the pension protection clause in Article VIII, Section 5 of the Constitution of the State of Illinois, which states that pensions cannot be diminished or impaired. This change will ensure taxpayers are not on the hook for pension obligations on services not yet rendered.===
File this under “Asked and Answered”
Used, bad ideas don’t count as actual ideas.
Spreading ignorance, that’s not helping Illinois. There’s a reason it hasn’t gotten anywhere, why is that, Rep. Ives?
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 2:14 pm
Never mentioned in these pension “reforms” when they bring up “401K” is FICA. If they shove their workers into “401K” instruments, let them also start withholding FICA which means the State, as employer, will match. Medicare too.
We will see if there are any savings to the State if they follow prevailing ‘market conditions’ ( i.e. the same level of funding as Northwestern, University of Chicago, Illinois Institute of Technology)
Comment by Concrete Jungle Tuesday, Dec 19, 17 @ 2:14 pm
More pipe dreams. Will take more then electing or re-electing an R for G
Comment by Sue Tuesday, Dec 19, 17 @ 2:14 pm
“pension obligations on services not yet rendered.” If she’s referring to what’s in place today, she just doesn’t get it.
Comment by Skeptic Tuesday, Dec 19, 17 @ 2:14 pm
Used bad ideas dont count as actual ideas.
OW. I kinda understand your point, but constantly going.to the well to get more and more tax dollars also falls into the ‘used bad ideas’ as well.
Comment by Blue dog dem Tuesday, Dec 19, 17 @ 2:18 pm
Remember, the target audience consists of likely voters in the March 2018 GOP primary.
Whether these ideas are remotely feasible might not matter.
Comment by Hamlet's Ghost Tuesday, Dec 19, 17 @ 2:22 pm
===but constantly going.to the well to get more and more tax dollars also falls into the ‘used bad ideas’ as well.===
“but constantly going to your checkbook to get more and more money to pay the stacked bills waiting to be paid, falls into the ‘best fiscal ideas’…”
The ILSC made quite clear their thoughts.
Changing the constitution here, can she get it passed both chambers first?
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 2:25 pm
“It’s an individual guarantee, so they’d have to negotiate with every worker and every retiree, unless they can come up with another way to accomplish the same thing.”
For retirees, yes. For current workers, wrong. See Matthews v CTA, where our Sup Ct confirmed that cb reps are allowed to negotiate away individual rights on behalf of the entire bargaining group.
Comment by Partially correct Tuesday, Dec 19, 17 @ 2:30 pm
==These three initiatives must happen simultaneously==
She forgot #4. Have The Amazing Kreskin hypnotize four Illinois Supreme Court justices to go along with my scheme.
Comment by Jocko Tuesday, Dec 19, 17 @ 2:32 pm
and this idea/plan/attempt at a plan/ matters because….?
Comment by silverspoon Tuesday, Dec 19, 17 @ 2:34 pm
I am sure that with campaign news like this. AFSME members can guarantee a Rauner reelection.
Comment by Power House Prowler Tuesday, Dec 19, 17 @ 2:37 pm
1) Pass a constitutional amendment to change the pension protection clause….
A: Will not reduce our pension obligations. Changes to the Constitution cannot be ex post facto, would only impact new hires.
2. Require all new hires to enter a 401K-stlye self-managed plan…
A: Would actually INCREASE our pension debt. Under the current system, new hires are paying more into the system than they will receive in benefits. They are paying down our debt. If new hires stop paying into the pension system and paying into a defined contribution system instead, Ives will have to raise taxes to make up the difference.
3) Re-negotiate pension obligations with current workers and retirees.
A: We already did that, and it is not happening again. The unions agreed to the Tier Two program; Republicans tried to push through more concessions despite union opposition, and they got their hat handed to them by the court. There is no more negotiation to be done, because the state went all-in with SB 1 and lost all of their chips.
Comment by If Only RNUG Were Here Tuesday, Dec 19, 17 @ 2:38 pm
It is never wise to touch the third rail of politics, which in addition to Social Security also includes a pensioner’s check.
Comment by Six Degrees of Separation Tuesday, Dec 19, 17 @ 2:38 pm
First we change the constitution to make my proposals constitutional….
LOL
Comment by VanillaMan Tuesday, Dec 19, 17 @ 2:42 pm
As a state retiree I’ll save Ives the trouble of asking, I’m not interested in entering any type of negotiations to change my pension benefits. That ship has already sailed.
Comment by David Tuesday, Dec 19, 17 @ 2:45 pm
I’m guessing this polls extremely well amongst fiscal conservatives. Not realistic, not ethical, and maybe not even legal. But it will poll very well.
Comment by Anon1234 Tuesday, Dec 19, 17 @ 2:46 pm
“the average person’s pension”
The average person has NO pension.
Comment by Ron Tuesday, Dec 19, 17 @ 2:46 pm
“negotiate away individual rights on behalf of the entire bargaining group.” Someone (anyone) is allowed to bargain away my Constitutional rights? That sure doesn’t sound right. And even if it is, you’d still have to get all the unions plus all the Merit Comp employees to buy in as well.
Comment by Skeptic Tuesday, Dec 19, 17 @ 2:50 pm
Ives is correct. Public employee pensions need to go.
Comment by Ron Tuesday, Dec 19, 17 @ 2:50 pm
If the constitution is changed, it’s a new ball game.
This needs to happen, regardless of any current day politics.
It takes 3/5 in both houses to put it on the ballot, not 2/3s. That’s 60%, not 67%, and no governor signature needed, per the article I just read.
Comment by cdog Tuesday, Dec 19, 17 @ 2:50 pm
If only - pretty good recitation of RNUG points.
Comment by Norseman Tuesday, Dec 19, 17 @ 2:50 pm
The average person apparently didn’t research job opportunities or plan very well Sorry
Comment by Nick Tuesday, Dec 19, 17 @ 2:50 pm
Sketic. I have no constitutionally protected pension.
Comment by Ron Tuesday, Dec 19, 17 @ 2:51 pm
I sense that she is concerned about our state’s pension problem - I like that - nevermind the rest, I have no interest in details.
Ives +1
Rauner 0
Comment by VanillaMan Tuesday, Dec 19, 17 @ 2:52 pm
I am a second class citizen in Illinois.
Comment by Ron Tuesday, Dec 19, 17 @ 2:52 pm
Way to kill off your campaign before it even got started Jeanne. Nothing is more polarizing in this state than pension reform.
The private side saw that pension plans were largely unsustainable and modified years ago. The public side kicked the can down the road, and nowhere was it kicked further than in Illinois, as evidenced by the enormous shortfall.
Taxes will need to increase significantly while services are slashed further in order to pay for it all. Many plan to vacate as soon as possible and watch the implosion from a distance.
Sad really, but what can you do?
Comment by SSL Tuesday, Dec 19, 17 @ 2:54 pm
IL Constitution is bad at math.
Comment by Ron Tuesday, Dec 19, 17 @ 2:57 pm
How was Quinn paying down the pension backlog
Comment by Sos Tuesday, Dec 19, 17 @ 2:58 pm
Look what happened to Detroit pensioners. They took a large haircut even with “constitutional” protection.
Comment by Ron Tuesday, Dec 19, 17 @ 2:58 pm
Rhetoric to energize her base in the same manner as the unrealistic IPI radio spots, no way her proposal passes legal muster. BTW, the assertion that the “..US military is shifting to this plan for all military personnel” is mostly false. The Blended Retirement System is still mostly a defined benefit plan albeit the multiplier used for years of service is reduced from 2.5 percent to 2.0 percent per year served to be supplemented with the addition of a 401K style savings fund. A 100 percent defined contribution retirement plan would prove to be a great disincentive for military service and the public won’t permit it to happen.
Comment by kitty Tuesday, Dec 19, 17 @ 2:59 pm
Oy with this stuff. Yeah sure Jeanne, go ahead and try to negotiate these changes. I’m sure after four years of being personally insulted by you and Bruce, they’ll all jump at the chance.
The only way the state might be able to avoid full pension payments would be to offer large lump-sum buyouts to current workers and retirees, which is a deal some might actually agree to taking and which might save the state some money in the long run.
Comment by Lester Holt’s Mustache Tuesday, Dec 19, 17 @ 3:04 pm
Ives would honestly be more productive if she chose to lobby for some kind of Federal intervention. Dems are never going to allow a ballot measure that will change the Constitutional language of pension protection.
On the one hand, I want to buy an Illinois GO bond due to the high interest rates. On the other hand, I realize that Illinois has made a financial suicide pact with itself. They need more revenue to shore up pensions, but with rate increases comes more flight to other States. They can’t win.
Comment by California Guy Tuesday, Dec 19, 17 @ 3:05 pm
Legalize mariguana and use that to pay down pensions
Comment by sos Tuesday, Dec 19, 17 @ 3:08 pm
Does she really think there is daylight to Rauner’s right on the public pension issue? Really? There might be a path for an Ives win, but it won’t be on this issue.
Abortion, amnesty and taxes Jeanne. Say it with me now: abortion, amnesty and taxes. Repeat as needed.
Comment by 47th Ward Tuesday, Dec 19, 17 @ 3:08 pm
Remember why we are unfunded in the first place. If the money hadn’t been ’stolen’ from the pension plans to pay for other services, we wouldn’t be in this shape to begin with. You wouldn’t take your mortgage payment and spend it on something else you wanted and then seem surprised when the money wasn’t there when the mortgage came due. You would need to figure out a way to get more money for the mortgage, Same applies to the pensions. the people who benefited from the low taxes because the pension money was used now don’t want to ‘pay the piper’.
Comment by ANONIME Tuesday, Dec 19, 17 @ 3:10 pm
=“the average person’s pension”
The average person has NO pension.=
Are you proposing to bring back pensions for private workers?
Sounds like a great idea, but how will the CEO’s (who are leading the charge against pensions) fund their $100 million plus annual bonuses?
Comment by Capitalism - the nightmare Tuesday, Dec 19, 17 @ 3:13 pm
I don’t know her but maybe she knows this plan is going nowhere in reality. For the primary though? Yeah, this plan is a “plus” for the primary.
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:14 pm
I think I’ll post another 5 or 10 times to give more weight to my argument
Comment by Ron Tuesday, Dec 19, 17 @ 3:14 pm
You do that ron. I hope it helps
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:17 pm
“Are you proposing to bring back pensions for private workers?”
No, because they don’t work.
Comment by Ron Tuesday, Dec 19, 17 @ 3:21 pm
What utter nonsense. A contract is a contract, oh holy one. You’ll pay your confiscatory taxes and like it. Go have your open and honest dialogue with people who don’t have an iron-clad guarantee.
Comment by DougChicago Tuesday, Dec 19, 17 @ 3:23 pm
- sos - Tuesday, Dec 19, 17 @ 3:08 pm:
Legalize mariguana and use that to pay down pensions
Agreed, the state sure could use $500,000,000 annually.
Comment by Ron Tuesday, Dec 19, 17 @ 3:24 pm
Math gets in the way of Constitutions Doug. Look at Detroit.
Comment by Ron Tuesday, Dec 19, 17 @ 3:24 pm
=The average person has NO pension=
The average state worker has no social security or 401K either. That was the deal they agreed to. And I can pretty much guarantee you that if you chronically underfund any obligation it won’t work. Remember that in a few years when I have to explain why your social security payments need to be curtailed.
Comment by Pundent Tuesday, Dec 19, 17 @ 3:27 pm
The “average” person does get social security.
Does the “average” state employee / retiree?
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:29 pm
How many times and by how many people have we’ve been told - leave the retirees alone - find another fix
Comment by Flayer Tuesday, Dec 19, 17 @ 3:29 pm
Poor poor Ron. Sat idly by for years while the State failed to fund pensions, programs for mental health services, developmentally disabled, numerous other programs, and nearly every other constituencies needs while at the same time maintaining the 4th most regressive tax system in the Nation. The constitutional amendment that needs to be changed is the flat tax and it is much more likely to be threatened than pensions. Nice try Jeannie. By the way Jeannie, you are a public employee too. Hate to break it to you, but you are one of those that you hate.
Comment by Redraider Tuesday, Dec 19, 17 @ 3:30 pm
“The average state worker has no social security”
They should though.
Comment by Ron Tuesday, Dec 19, 17 @ 3:38 pm
SoS =how was Quinn paying down the pension backlog= ?
With money. Is it really that difficult to understand?
Comment by Capitalism - the nightmare 9Probably blocked by Rich at secoond post) Tuesday, Dec 19, 17 @ 3:38 pm
“Are you proposing to bring back pensions for private workers?”
Ron-
=No, because they don’t work.=
Then you should be happy you aren’t burdened by one. What’s your problem?
Comment by Capitaism - the nightmare (Likely blocked by Rich at 3rd post) Tuesday, Dec 19, 17 @ 3:41 pm
Didn’t the pension liability grow under Quinn?
Comment by Ron Tuesday, Dec 19, 17 @ 3:41 pm
My problem is that the vast majority of IL citizens are captive to a unionized workforce that provides little benefit to the citizens but is outrageously expensive.
Comment by Ron Tuesday, Dec 19, 17 @ 3:42 pm
Do not feed the Troll.
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 3:43 pm
No. Duh. Money from where. The previous tax increase that expired ?
Comment by Sos Tuesday, Dec 19, 17 @ 3:43 pm
One item that escapes mention is that in many cases the pension benefits are much greater mow than when they signed up for it. Sweeteners bought with generous contributions from special interest had a huge negative impact on the liability. Some pensioners’ spouses now receive 100% of the others pension. Ask an actuary how much that cost.
Everyone had a hand in creating the mess.
Comment by CivilSpk Tuesday, Dec 19, 17 @ 3:45 pm
What little benefit are you referring to
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:45 pm
The state income tax is much lower than in many states. Raise it to ten percent and dedicate the extra five to reduce the amount of skipped pension payments. Taxpayers already received the services the pension payments were diverted to pay for so it’s only fair that they belatedly pony up.
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:45 pm
Sure lets double the income tax and reelect the sane legislators for leadership who created the mess
Problem solved
Comment by Lucky Pierre Tuesday, Dec 19, 17 @ 3:48 pm
The state and local tax burden in one of the highest in the nation, even with our “low” income tax rate.
Comment by Ron Tuesday, Dec 19, 17 @ 3:49 pm
The taxpayers have not received future work for pensions that cannot be changed. Our constitution is irrantionally unfair.
Comment by Ron Tuesday, Dec 19, 17 @ 3:50 pm
Meh, =generous contributions=
Were they as generous as your private multi-million dollar golden parachutes and stock options?
Comment by RightWingSpk (Blocked by Rich) Tuesday, Dec 19, 17 @ 3:51 pm
How does this play in Peoria or Pinckneyville? Quite well. Expect more.
Comment by Dr X Tuesday, Dec 19, 17 @ 3:52 pm
Spouses collect 100%
Prob because the retiree opted for a reduced amount upfront so that spouse could collect morre once they die Most retiree only take this option because they know they won’t collect very due to terminal illness
Comment by Anonymous Tuesday, Dec 19, 17 @ 3:52 pm
Ron, were you as vocal about defending State employees when the legislature was not funding and eventually even pilfering their personal contributions to the fund in order to maintain a regressive tax structure? Just curious
Comment by Redraider Tuesday, Dec 19, 17 @ 3:53 pm
Why, exactly, would individual pensioneers “renegotiate” their constitutionally protected benefits?
Ives must understand that’s irrational. So she also knows she’s selling snake oil.
Comment by wordslinger Tuesday, Dec 19, 17 @ 3:54 pm
I half agree with Ron and Ives.
We should amend the pension clause.
We should expand it to cover private sector employees like Ron.
Comment by If Only RNUG Were Here Tuesday, Dec 19, 17 @ 3:54 pm
=We should expand it to cover private sector employees like Ron.=
And when a company goes bankrupt? Raise taxes to cover their bloated, irresponsible pensions as well?
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 3:56 pm
When your politicians suggest using Rhode Island as an example, it’s time to move.
There is so much misinformation about Rhode Island’s pensioners m changes. The bottom line is that Rhode Island did not fix its pension system. There are hundreds of local pension systems that are insolvent. See Central Falls
, pautucket and Providence. City police and firefighters in providence who retired between 1997 and 2003 get a 6% COLA. You fix pensions by Taking away the benefits for public safety, that’s where all the money is going
Comment by Time to Move Tuesday, Dec 19, 17 @ 3:58 pm
…as for the idea of increasing income tax to 10%……
Another down state citizen just moved residence to Florida. Annual AGI exceeded $20 million. To replace that lost income tax (at today’s rate), we only need a new factory with 440 new jobs at $45,000/year.
Yup, just raise taxes. It will be fine.
Comment by Downstate Tuesday, Dec 19, 17 @ 4:02 pm
With the GOP tax plan expected to pass tonight, it’s going to be even harder to pass another income tax hike in IL, since it won’t be deductible.
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 4:03 pm
It’s going to get very bad in Illinois. Those with the means can leave. And we pay the vast majority of state income taxes.
Comment by Ron Tuesday, Dec 19, 17 @ 4:06 pm
Who is consulting her? George ryan?
Comment by Foster brooks Tuesday, Dec 19, 17 @ 4:08 pm
=Yup, just raise taxes. It will be fine.=
Service tax in IL is 0%. Your idols get alot of tax breaks on luxury services.
Comment by RightWingSpk Tuesday, Dec 19, 17 @ 4:08 pm
Actually, under Quinn, Illinois paid down the Blagojevich bill backlog and made the pension ramp payment which is designed to gradually pay down the pension deficit over the coming decades.
As an aside, notice how people phrase the issue in terms of “Quinn” doing the paying. Hat tip to OW: Governors own.”
Comment by 37B Tuesday, Dec 19, 17 @ 4:09 pm
We have to try to pay our debt. It’s the conservative and right thing to do. Maybe now we should seriously try to find a way to reamortize the pension debt. We will need more revenue, and since we’re talkin’ CA’s, the Democratic gubernatorial candidate will almost certainly support a progressive income tax, and all but Kennedy will support marijuana legalization.
We’ll need to push corporations to issue defined benefit pensions, now that they will get their massive tax cut. It’s supposed give corporations more money so it can trickle down to workers. Right?
Comment by Grandson of Man Tuesday, Dec 19, 17 @ 4:10 pm
Ron- take your own advice and flee. I finally talked my parents into selling the farm. Real estate will plummet once the taxes are raised high enough to cover the pensions.
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 4:12 pm
==Remember that in a few years when I have to explain why your social security payments need to be curtailed.==
Oh Ron won’t have to wait that long, Paul Ryan is going explain it to him in about four months. His social security and/or medicare payment cuts will be a “necessary reform”, kind of like how he suggests “reforming” state worker pensions. Maybe Ron can let us know how that all works out for him.
Comment by Anonymous Tuesday, Dec 19, 17 @ 4:14 pm
At least according to the 9th Circuit, in theory the state could indirectly shed a lot of its budget debt if it took some draconian steps with respect to funding local governments and authorities.
Wordslinger - you’re mostly right, but I could think of one reason: give them an early cash payout - some are probably desperate for a big cash infusion now. Cruel, but effective. I think Drury proposed this as a rep and guv candidate.
To Robert’s point: not only will it be harder to pass another income tax hike, there’s going to be a lot of independent and Dem tax payers wanting their state/local taxes cut to make up for their losses under the GOP taxes.
Comment by lake county democrat Tuesday, Dec 19, 17 @ 4:15 pm
Sorry, 4:14 was me.
Comment by Lester Holt’s Mustache Tuesday, Dec 19, 17 @ 4:17 pm
I’ve never read a Ron post that was worthwhile. When we get to the point of the following, can we do something here? annoying
“I think I’ll post another 5 or 10 times to give more weight to my argument”
Comment by IMissBentohs Tuesday, Dec 19, 17 @ 4:20 pm
Not only would Jeannie’s plan be unconstitutional (you could not apply the constitutional amendment on current employees) it is also fiscally unsound in that it would deprive the existing pension funds the revenue that they get from current employee contributions.
Comment by TominChicago Tuesday, Dec 19, 17 @ 4:21 pm
Back to Ives- why not consider eliminating pensions for current members of GARS? And for judges, as well? If you’re going to eliminate and reduce for SERS, go full boat and do it for everyone.
Comment by Fixer Tuesday, Dec 19, 17 @ 4:25 pm
Isnt this a contrast to the Pritzker campaign?
Last week he proposed.1. More money for social services.2. More money for higher ed. 3. More money for K-12. 4. An infrastructure plan.5. A fair deal for state workers. 6. Pay down bills.
But I give him kudos. He promised to pay for all these things with his crackdown on waste,fraud and abuse. Its about time we had a candidate who brought that idea to the table.
Comment by Blue dog dem Tuesday, Dec 19, 17 @ 4:30 pm
Constitutions don’t stop math. Ask Detroit.
Comment by Ron Tuesday, Dec 19, 17 @ 4:32 pm
Reading these comments makes me happy I’m in the self-managed plan so I’ll own my retirement money and not worry about politicians messing with my future
Comment by Flapdoodle Tuesday, Dec 19, 17 @ 4:36 pm
Hey Ron….
Read This
RNUG - Friday, Jul 7, 17 @ 1:25 am:
== Public pensions in this State are unsustainable. … ===
First, the state is supposed to be contributing also, and combined with the employee contribution, be invested and earn enough to pay the pensions. The math does work *if* the contributions are made on time by the State. The problem is the the State didn’t fully fund it … and you can’t invest money that isn’t put into the system.
Second, the IL SC has been crystal clear that existing pension promises must be honored. No changing things to welsh on your what was promised. Once you are in the system, you get what you signed up for when hired. Go read the 1975 ITF ruling, Eric Madiar’s “Welshing” analysis, the Kanerva ruling, and the SB-1 decision.
If you can find a loophole in the State Pension Clause, Federal Contract Law, and the IL SC decisions, then you are doing better than a whole bunch of legal scholars.
Comment by Maywoodian Tuesday, Dec 19, 17 @ 4:38 pm
I will have to ask my neighbor that retired from the state at 49, and has his working spouse and two 20-somethings on the state health insurance, what he thinks of these ideas.
Comment by cdog Tuesday, Dec 19, 17 @ 4:39 pm
=1) Pass a constitutional amendment to change the pension protection clause….
A: Will not reduce our pension obligations. Changes to the Constitution cannot be ex post facto, would only impact new hires.
2. Require all new hires to enter a 401K-stlye self-managed plan…
A: Would actually INCREASE our pension debt. Under the current system, new hires are paying more into the system than they will receive in benefits. They are paying down our debt. If new hires stop paying into the pension system and paying into a defined contribution system instead, Ives will have to raise taxes to make up the difference.
3) Re-negotiate pension obligations with current workers and retirees.
A: We already did that, and it is not happening again. The unions agreed to the Tier Two program; Republicans tried to push through more concessions despite union opposition, and they got their hat handed to them by the court. There is no more negotiation to be done, because the state went all-in with SB 1 and lost all of their chips.=
RNUG’s comment should be required reading with a mandatory quiz afterward. He gets it exactly right.
Go ahead and try to dissolve the debt owed. A lot of that is bonded debt.
I am sure the bond holders do not make political donations./s
Comment by JS Mill Tuesday, Dec 19, 17 @ 4:41 pm
#3 Ives wants to renegotiate pensions with current employees and retirees? Good luck with that!
Comment by Stones Tuesday, Dec 19, 17 @ 4:41 pm
=Reading these comments makes me happy I’m in the self-managed plan so I’ll own my retirement money and not worry about politicians messing with my future=
Ron the troll is on a self-managed plan and is very unhappy about it.
Comment by Last 2 blocked by RIch Tuesday, Dec 19, 17 @ 4:42 pm
Under Quinn, taxes (at 5%) were in fact “raised high enough to cover the pensions.” At that level Illinois raised enough revenue to pay the cost of government, pay the bills, pay down the Blago bill backlog, pay the normal cost of pensions, and make Ramp payments. We’re now back to 4.95% after the “Lost Weekend” i.e. the Rauner administration during which no Illinois Governor was in charge. Taxes at that level are probably enough or closing in on it.
Comment by 37B Tuesday, Dec 19, 17 @ 4:42 pm
===I will have to ask my neighbor that retired from the state at 49, and has his working spouse and two 20-somethings on the state health insurance, what he thinks of these ideas.===
Why do you begrudge your neighbor? I assume he and his family played by the rules. Is it simply that you’re jealous that he got a good deal and you didn’t? Then just say so.
Maybe some of you people ought to talk to your employers and demand better retirement plans before you try to drag everyone else into the gutter with you.
Really, it’s unbecoming. Working people behaving like crabs in a barrel, trying to pull down any who might escape. This is what a race to the bottom looks like.
Comment by 47th Ward Tuesday, Dec 19, 17 @ 4:45 pm
If only there was a common, colloquial term for a system that requires those at the bottom to continuously pay to support those at the top, without ever realizing the full benefits they were promised in return for their contributions.
Comment by JB13 Tuesday, Dec 19, 17 @ 4:46 pm
Sos, legalize marijuana, smoke the marijuana, propose Ives pension recommendations as they now will make more sense in the haze.
Comment by Illinifan Tuesday, Dec 19, 17 @ 4:46 pm
Under the city’s plan, the pensions of police and firefighters are not being cut, but their annual 2.25 percent cost-of-living adjustment is reduced to about 1 percent.
The Detroit bankruptcy plan was better for me (retired State Police) than the SB1 bill that was found unconstitutional.
Comment by tsavo Tuesday, Dec 19, 17 @ 4:48 pm
=Why do you begrudge your neighbor?=
Do you begrudge your fellow Democratic lobbyists who sub taught for a single day and received life-long teacher pensions?
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 4:48 pm
They played by the rules (they helped to write).
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 4:48 pm
===Do you begrudge your fellow Democratic lobbyists who sub taught for a single day and received life-long teacher pensions?===
Lots of people did. It was in all the papers.
Ok, that’s “one”, what else ya got?
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 4:49 pm
The numbers are overinflated. We don’t even fund our military to 90%, believing we should fund a Pension Fund to 90% is just useless noise. Time to avoid the hyperbole and think rationally.
Comment by Union Man Tuesday, Dec 19, 17 @ 4:53 pm
Actually, it was two. I just want to know where 47th draws the line. My guess is he doesn’t.
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 4:54 pm
===Actually, it was two. I just want to know where 47th draws the line. My guess is he doesn’t.===
Ya could use the Google key.
You’re welcome.
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 4:56 pm
==Isnt this a contrast to the Pritzker campaign?
Last week he proposed.1. More money for social services.2. More money for higher ed. 3. More money for K-12. 4. An infrastructure plan.5. A fair deal for state workers. 6. Pay down bills.
But I give him kudos. He promised to pay for all these things with his crackdown on waste,fraud and abuse. Its about time we had a candidate who brought that idea to the table.==
Blue dog, Pritzker wont have to worry about a way to pay for all this stuff. In case you haven’t heard, we have all received assurances that the new GOP tax bill will create the greatest, most luxurious economic growth the world has ever seen. That tremendous, tremendous growth we have been promised by Trump, Roskam, Davis et al. will surely allow us to pay off the pensions and for anything else we need.
Comment by Lester Holt’s Mustache Tuesday, Dec 19, 17 @ 4:58 pm
I will admit I’m quite happy with my private retirement plan. Im not counting on a dime from SS.
Comment by Ron Tuesday, Dec 19, 17 @ 5:03 pm
===I will have to ask my neighbor that retired from the state at 49, –
I don’t see how that person would be eligible for state pension benefits under the Rule of 85. Did this real person start working for the state when they were 13?
Otherwise, early, reduced-benefit retirement starts at 55 with 25 years of credited service.
https://www.srs.illinois.gov/SERS/retireben_sers.htm
Comment by wordslinger Tuesday, Dec 19, 17 @ 5:04 pm
Even if Ives could amend the Illinois constitution, ex post facto laws like the one she proposes are forbidden by Article I, Section 10, Clause 1 of the Constitution of the United States.
But other than that…
– MrJM
Comment by @misterjayem Tuesday, Dec 19, 17 @ 5:05 pm
Lester. I agree with you .Pritzker reminds me of Trump. Lots of empty promises.
Comment by Blue dog dem Tuesday, Dec 19, 17 @ 5:07 pm
Any bets on how many people Illinois lost in the next Census estimate?
Comment by Ron Tuesday, Dec 19, 17 @ 5:08 pm
The state should never give a single pay increase to any current employees unless they renegotiate their retirement.
Comment by Ron Tuesday, Dec 19, 17 @ 5:10 pm
===I just want to know where 47th draws the line===
I draw the line at politicians who spent the pension money instead of making the payments. They didn’t tax us enough then, so we need to pay more now. I also think the stupid politically motivated pension sweeteners were criminal and those who orchestrated them should be publicly shamed.
But no, I don’t think you solve this problem by unilaterally pulling pension benefits away from people who did nothing wrong and who made every payment they were required to make.
Do me a favor Robert, don’t assume anything about me. Don’t think about me. Don’t worry about me. Just shut up and pay your taxes or pack up a U-Haul and move the heck out of state.
And before you ask, no. I don’t have a public pension and I’ve never worked for the state. And I’m mad as hell that I have to pay higher taxes to pay back what shortsighted politicians misspent decades ago. But that, and only that, is the way forward. Pretending otherwise is burying your head in the sand (or sticking it up somewhere else).
Comment by 47th Ward Tuesday, Dec 19, 17 @ 5:21 pm
Ron - Tuesday, Dec 19, 17 @ 2:51 pm:
Sketic. I have no constitutionally protected pension.
Thus we get to the crux of Ron’s argument
Comment by Morty Tuesday, Dec 19, 17 @ 5:26 pm
Ron - Tuesday, Dec 19, 17 @ 5:03 pm:
I will admit I’m quite happy with my private retirement plan. Im not counting on a dime from SS.
Methinks the lady doth protest too much
Comment by Morty Tuesday, Dec 19, 17 @ 5:27 pm
The state received every last penny of pension money due. Had they done what they were suppose to, invest the money instead of spending it, the money would be there today.
And speaking of Rauner, he’s one of the individuals who has profited personally investing pension funds. His management firm made exceptional money on their fees. How abouts refunding that money Bruce?
Comment by Anonymous Tuesday, Dec 19, 17 @ 5:28 pm
It’s very unbecoming for residents to have enjoyed blue state benefits on a red state tax structure for decades (3% was too low of a rate from the beginning, as evidenced by the constant pension raiding) to now complain about about taxes that are finally at an adequate level, refuse to consider having retirement income taxed or feel that an extra 2% in income taxes is just too much and they have to move. The pension debt & high property taxes are a direct result of that decision to not have an adequate state tax structure. If pensions and education had more funding for decades it would be a different story in Illinois and this mess wouldn’t be as bad.
Comment by MyTwoCents Tuesday, Dec 19, 17 @ 5:29 pm
The Illinois Constitution will have to be changed. But, Ives is on the right track: new workers probably will not be able to get pensions because they are too expensive in the long run because you can never really know how many taxpayers Illinois will have down the road.
Comment by Steve Tuesday, Dec 19, 17 @ 5:34 pm
So mommy, if they take my pension away and give me a 401k instead, will I get Social Security like everyone else?
Comment by leoFromChicago Tuesday, Dec 19, 17 @ 6:22 pm
== This change will ensure taxpayers are not on the hook for pension obligations on services not yet rendered. ==
Previously discredited Sidley-Austin law firm theory. Most people don’t believe it will be legal when applied to.exiating workers.
Comment by RNUG Tuesday, Dec 19, 17 @ 6:24 pm
Help yourself to my Social Security and enjoy paying 6.2% plus your employer match. I likely won’t see a dime. I put 15% into retirement beyond all that and hope to retire at 62.
Comment by Robert the 1st Tuesday, Dec 19, 17 @ 6:26 pm
Rich - here’s an idea.
Put a link on your page to an FAQ page on pensions and retiree health benefits. List all the citations of court decisions, employee contributions, payout calculators for each of the 5 systems,health costs by years of service, etc.
When you post a new thread like today’s, require the commenters to state they’ve reviewed the FAQ page. Except R
Comment by Thoughts Matter Tuesday, Dec 19, 17 @ 6:26 pm
== Re-negotiate pension obligations with current workers and retirees. ==
And what are you going to do when the retirees say “hell no”?
Comment by RNUG Tuesday, Dec 19, 17 @ 6:26 pm
–And what are you going to do when the retirees say “hell no”? –
Which they will. I’m sure Ives knows that. So, snake oil.
Comment by wordslinger Tuesday, Dec 19, 17 @ 6:28 pm
Rich. Please have RNUG develop an FAQ page regarding pensions. Put a link to it on your site somewhere. Whenever you have a new story about pensions, require all commenters to state they’ve reviewed that page. That will cut down on the nonsense.
Comment by Thoughts Matter Tuesday, Dec 19, 17 @ 6:30 pm
===And what are you going to do when the retirees say “hell no”?===
“Then we’ll ‘strenuously suggest’ they reconsider”
What is Ives doing?
Comment by Oswego Willy Tuesday, Dec 19, 17 @ 6:31 pm
== Look what happened to Detroit pensioners. They took a large haircut even with “constitutional” protection. ==
5% was large? Ask the Detroit bondholders some of who lost 60%, about large.
Comment by RNUG Tuesday, Dec 19, 17 @ 6:31 pm
Sorry about the almost double post. My phone was weird and kept kicking me out of the page. I didn’t realize the earlier one had been submitted.
Comment by Thoughts Matter Tuesday, Dec 19, 17 @ 6:32 pm
== They took a large haircut even with “constitutional” protection. ==
Go read the Michigan Constitution and statues. Then try telling me they had the same level of protection as NY, IL and AZ. Hint: not even close to being equal.
Comment by RNUG Tuesday, Dec 19, 17 @ 6:33 pm
Anon 5:28, that’s a ridiculous argument. Rauner’s investments for the State did perform well, and the TRS and ISBI got 80% of the take as a result. Why should he, or any successful investor, be penalized for doing their job?
How about clawing back fees from losers like Kwame Raoul’s BFF John Rogers, whose Ariel Fund has been fired by all the State pensions for underperforming an index fund while being paid millions.
Comment by Arthur Andersen Tuesday, Dec 19, 17 @ 6:36 pm
And now Rogers’ ex-wife is running for AG.
Comment by Anonymous Tuesday, Dec 19, 17 @ 6:56 pm
== I don’t see how that person would be eligible for state pension benefits under the Rule of 85. ==
There were / are ways for some state employees to retiree at age 49 or 50. But most of them do not receive a full pension. It all depends on the details.
Let’s take a few cases.
Real SERS State’s employee (as opposed to teachers), standard formula. Started working for the State at age 18. At age 52 will have 34 years or service, which totals 86 …so they meet the Rule of 85. However, a “full” pension (75%) requires service of 44 years and 10 months. At 34 years of service *1.67% = a pension of 56.78% of FAC.
The one time 2002 ERI effectively made it a Rule of 80 (giving 5 years of age) or s Rule if 75 (giving 5 years of age plus allowing 5 years of service to he both at the normal pension contribution rate). But you had to he age 50 or older to get in on the 2002 ERI.
So neither of those scenarios allowed a normal state employee to retiree at age 49.
But then there are people in the hazardous “life safety” job titles. People like State Troopers prison guards, and even highest construction workers. They have a more generous plan accruing at 2.2% per year. They also pay a higher pension contribution rate. And are allowed to retire at a younger age … again with reduced benefits based on actual years of service. THOSE are the people you see sometimes retiring in their late 40’s.
I’m not even going to go into GARS and JRS since those system’s rule are quite a bit different from SEARS.
Comment by RNUG Tuesday, Dec 19, 17 @ 7:04 pm
SEARS / SERS … darn autocorrect
Comment by RNUG Tuesday, Dec 19, 17 @ 7:05 pm
“5 years of service to be bought”
Hate trying to comment on a small phone screen …
Comment by RNUG Tuesday, Dec 19, 17 @ 7:06 pm
–Help yourself to my Social Security and enjoy paying 6.2% plus your employer match.–
Strange, the two seniors I know tell me S.S. makes up half of their current monthly income. Will the State pay its part and let me pay mine if I want?
Comment by leoFromChicago Tuesday, Dec 19, 17 @ 7:14 pm
Rnug
It may be a pain for you, but the rest of us appreciate it. Helps to avoid the perpetual outrage chorus everytime this subject comes up.
The moneys owed, we have to pay it, such is life. It’s like alimony you can gripe all you want but you write the check.
Comment by Mason born Tuesday, Dec 19, 17 @ 7:20 pm
Mason. I agree with you. Pay what we owe. Cut social services,higher ed and K-12 to the bare minimum until we get this pension thing in line. No matter what it takes.
Comment by blue dog dem Tuesday, Dec 19, 17 @ 7:29 pm
The neighbor took one of the early-out offerings. It took a just a few years for the full benefit package to flow.
Comment by cdog Tuesday, Dec 19, 17 @ 7:32 pm
Rep. Ives has turned back the clock. We didn’t think it was possible but she actually believes that Republican voters will buy into a theory that has been tested, and decided, in court already. If this is what she has I’m going with Rauner.
Comment by DuPage Lawman Tuesday, Dec 19, 17 @ 8:05 pm
Rich, Why can’t I comment here? I’ve always been relevant and never profain? Just curious.
Comment by Sands Tuesday, Dec 19, 17 @ 8:09 pm
Got a lot goin’ on so haven’t been here in a while….dropped in to see what’s up….
and it’s this again??????
Merry Christmas.
Comment by TinyDancer(FKASue) Tuesday, Dec 19, 17 @ 8:12 pm
It’s Groundhog Day.
Comment by TinyDancer(FKASue) Tuesday, Dec 19, 17 @ 8:13 pm
Anything ad long as it doesn’t affect Ron. Right Ron?
Comment by Generic Drone Tuesday, Dec 19, 17 @ 8:35 pm
==It’s very unbecoming for residents to have enjoyed blue state benefits on a red state tax structure for decades…==
And yet one of America’s bluest states - Washington - has no state income tax.
==I draw the line at politicians who spent the pension money instead of making the payments. ==
Did the state give out raises? Did the state pick up any more of the health care costs as they increased? Because that’s where a portion of the pension money went.
The state should pay pensions first, then all other compensation with whatever’s left, if anything. Certainly, then everyone will be happy, right?
Comment by City Zen Tuesday, Dec 19, 17 @ 9:53 pm
As a state employee, I believe we would be better off if the pension system was more flexible, requiring additional contributions or cuts in accrual or benefit rates (within limits) if investments don’t perform, keeping the system fully funded as conditions change over the decades. However, the constitution does not allow us to change to such a system because it is an individual protection. However, as we all know, none of this will pay back the unpaid state portion that totals the vast majority of the pension shortfall. That will simply have to be paid. There is literally no other option.
Comment by Jibba Tuesday, Dec 19, 17 @ 10:04 pm
City Zen…I am very interested in comparing our tax system to any (or all) other states, especially those nearby, to see where they obtain revenue and what their expenditures are, both in total in per capita, along with analysis of cost of living. I think we might have some bipartisan cooperation in trying to keep ourselves more competitive through comparisons. But anecdotally mentioning one state without any discussion of the entire budget picture (revenues, expenditures, and cost of living) is not helpful or interesting. Florida does not have income tax either, but we are not Florida, nor can we become Florida.
Comment by Jibba Tuesday, Dec 19, 17 @ 10:12 pm
RNUG, based on what I have read the big loss was in health care not the 5% haircut in pension.
Comment by a drop in Tuesday, Dec 19, 17 @ 10:37 pm
If Ives could wave a wand and eliminate pensions, 401k and ss payment cost would equal current cost.
Comment by Wondering Tuesday, Dec 19, 17 @ 11:11 pm
Some believe a “solution” would be a significantly higher inflation rate. With a corresponding rise in wages, it would align the average retiree’s pension (with the 3% annual increase) relative to the rising amount of tax dollars collected over time. President Obama’s Fed did their best with several years of QE with no success (at least, not yet). But since the debt service would also go up, that may just be wishful thinking. So, it’s likely that raising taxes is the only solution to pay this down. Smart people will ask themselves whether they can have better lives in other states, and “vote accordingly” (with their feet). Is the prudent move in IL to limit your exposure to real property? With less buyers and higher taxes, one would think that prices will stagnate or drop.
Comment by Stuntman Bob's Brother Wednesday, Dec 20, 17 @ 4:05 am
Article 1 Section 10 United States Constitution: “No state can pass legislation prohibiting the execution of contracts”.
If Jeanne Ives wants to change the state constitution to change the pension clause, she’ll almost certainly face a federal lawsuit. If Illinois spent as much time paying the bill as it does trying to find ways to not pay the bill, we wouldn’t be in pension debt.
Comment by Hottot Wednesday, Dec 20, 17 @ 7:01 am
Ives and Ron howl at the moon. News at 10.
Comment by PublicServant Wednesday, Dec 20, 17 @ 7:28 am
The state isn’t on the hook for returns with SS and 401k. That alone is worth the change.
Comment by Anonymous Wednesday, Dec 20, 17 @ 8:15 am
Trump’s supreme court would rule against these ridiculous pension systems.
Comment by Anonymous Wednesday, Dec 20, 17 @ 8:16 am
==The state isn’t on the hook for returns with SS and 401k. That alone is worth the change.==
It all comes back to how you value risk. For me, pension risk is extremely high. I’d be willing to pay a premium for 401k and SS benefits today to completely absolve myself of all pension risk tomorrow.
Comment by City Zen Wednesday, Dec 20, 17 @ 8:46 am
Anonymous 816, what returns?
Comment by Wondering Wednesday, Dec 20, 17 @ 9:05 am
The state is not on the hook now for investment returns.Pensions can be paid directly from the general fund. Invetment return offsets that.
Comment by Wondering Wednesday, Dec 20, 17 @ 9:10 am
=There is literally no other option.=
Please max out an IRA at $5,500 at the very least. The constitution says the cheeks have to be sent, nothing about what happens when they bounce.
Comment by Robert the 1st Wednesday, Dec 20, 17 @ 9:14 am
The state is not on the hook now for investment returns.
What? Of course it is.
Comment by Anonymous Wednesday, Dec 20, 17 @ 9:18 am
“Anonymous 816, what returns?”
Huh?
Comment by Anonymous Wednesday, Dec 20, 17 @ 9:19 am
No, it is not.ILSC said so. The souce of pension payments is up to the state…investment and/or general revenue. No hook on returns.
Comment by Wondering Wednesday, Dec 20, 17 @ 9:30 am
Bring on a universal service tax of .25 % and offer 0 exemptions under a cap of say $10K. That will raise enough to cover just about every thing. Someone get Martierrie and Msaal on the phone, they can crunch the numbers.
Comment by NorthsideNoMore Wednesday, Dec 20, 17 @ 11:43 am
The whole sky is falling arguement about under funded pension funds is bogus. It is prudent but not mandatory to invest. The feds don’t.
Comment by Wondering Wednesday, Dec 20, 17 @ 1:24 pm