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[Bumped up for discussion purposes and updated.]
In an angry letter to House Speaker Michael Madigan, Gov. Rod Blagojevich has declined to appear before tomorrow’s Committee of the Whole.
The governor claims he won’t attend the meeting because Madigan is “more interested in playing games and taking solutions off the table than trying to find solutions to solve real problems,” which he specifically pointed to as causing the overtime session in the first place. Instead, the governor will be sending staff to the meeting.
Blagojevich called a special session for tomorrow to discuss pension funding reform. Madigan, in turn, called a Committee of the Whole and invited the governor to attend.
It’s not clear from the letter whether the governor has finally put his pension “solutions” into actual bill form. The governor proposed a lottery lease and a pension bond deal months ago, but has never had any legislation drafted. Madigan wanted him to do so before tomorrow’s meeting.
Blagojevich demanded that Madigan come up with his own pension alternative if the House votes down Blagojevich’s still unspecified plans. “Rejecting one option without providing an alternative solution is both irresponsible and counterproductive,” the governor wrote.
Noteworthy items are highlighted…
ROD R. BLAGOJEVICH
GOVERNORJuly 4, 2007
The Honorable Michael Madigan
Speaker of the House of RepresentativesDear Mr. Speaker:
I called the legislature into Special Session this week to address the State’s under-funded pension liability. This is one of the most important budget issues we face. It is my intention to have members of my administration and financial experts available to testify at the Committee of the Whole on the nature of the pension problem and potential solutions.
If the purpose of your Committee of the Whole is to inform and educate members about how the pension debt threatens both the short and long-term fiscal health of the state, then it is a laudable purpose. But if the purpose is simply to vote down my proposed solution, then it is just more games. It is this type of gamesmanship that has brought us into overtime and has left me no choice but to call the members into Special Session. I must confess that I believe you are more interested in playing games and taking solutions off the table than trying to find solutions to solve real problems. So I will not be attending your Committee.
Instead, I would respectfully suggest that you appear in front of the Committee of the Whole and explain to the Members how the pensions became underfunded. After all, you are the only one who has been in leadership for each of the past 24 years making the decision to underfund or outright skip pension payments.
You can explain to the Members that it wasn’t always like this. In 1983, the unfunded liability was $6.5 billion. By 1995, it had grown to over $19 billion and it now stands at over $40 billion. Though our hands were tied by the fiscal condition of the state when I came into office, we have invested more than $13 billion into the pensions. That’s more than any administration in Illinois history. We’ve reduced the unfunded liability, but in spite of the progress we’ve made, this problem is getting worse, not better. Paying the interest on more than $40 billion in pension debt leads to less money for our priorities. If we solve this problem, instead of wasting money on interest, the citizens of Illinois will have higher quality schools, improved access to healthcare and better transportation networks.
There are three options that have been discussed for fixing the current pension crisis:
1. The option I support infuses the pension system with $26 billion and saves taxpayers some $60 billion over the next several decades.
2. The second option is the one supported by the business community that would reduce pension benefits for workers.
3. The final option others have discussed is identifying an alternative revenue source that could be used to pay down the unfunded liability.
Rejecting one option without providing an alternative solution is both irresponsible and counterproductive. If you do that, you will only serve to prolong this overtime session needed to get a state budget.Ignoring and putting off a solution must not be an option. I hope at the end of your hearing, your members will be prepared to vote on solutions to this problem. As I’ve said before, I have put forth my solution, but I am remain flexible as to the means to get there. The end goal is what is important. I look forward to working with you and your members on a long-term solution to our pension funding problem.
Respectfully,
Rod R. Blagojevich
Governor
*** UPDATE *** From the SJ-R…
Rebecca Rausch, a spokeswoman for Blagojevich, said Wednesday that the governor will be in his office at the Capitol today. Asked why Blagojevich had decided not to attend the House hearing, she said, “The letter pretty much speaks for itself.” […]
Madigan spokesman Steve Brown said the hearing will continue as scheduled, despite the governor’s refusal to attend.
“I don’t know what the governor is afraid of,” Brown said. “He’s the one advocating bringing these members to these show-and-tell meetings,” referring to Blagojevich’s promise to call special legislative sessions on various budget issues every day until an agreement is reached.
“What would be a game? The governor wanted to bring the members and the media into the process,” he said, calling Blagojevich’s decision “baffling.”
Hearings on budget issues are “all part of the legal process,” Brown said. “This shows how little he understands how state government works.”
* More special session and budget updates, compiled by Paul…
* Marin: Michael Madigan also to blame for state’s disorder
* Miller: What are they fighting over? Ego, political advantage
* Special session to cost thousands a day
* Taxpayers tab is $42,000 a day
* Governor snubs Madigan; won’t appear before House
* Governor gears up for special budget session
* Governor will stay in Springfield for session
* Illinois budget showdown appears to be looming
* Editorial: Early special session unlikely to spark deal
* Bethany Carson: On special session duel
* Editorial: One-month extension enough; pass a full year budget
* Lawmakers weigh in on lottery
* Rep. Fritchey: Responding to the governor; more here and here
* Phil Kadner: State’s leaders use children as human shields
* Opinion: Expand Medicare to every Illinois resident
* Chuck Sweeny: Get serious and pass a capital plan
* Opinion: Time for state to do its part for schools
posted by Rich Miller
Thursday, Jul 5, 07 @ 8:26 am
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It is inexcuseable that the Gov would not attend regardless of what the motive is.. Also, How did Rod vote on these pension bills when he was in the State Leg? Or was he absent at the time those votes were taken?
Comment by He makes Ryan look like a saint Thursday, Jul 5, 07 @ 8:36 am
Amazing, 8 months ago every democrat legislator was prancing around the state campaigning how great of of guy Rod was and now he is a slug. The Democrats are 100% to blame for this. You wanted him, now you have him. No fan of Judy here, but even Madigan should have known she would play ball.
If the Republicans don’t can McKenna and find someone to take advantage of this mess we should be banned from the 2010 election.
Comment by the Patriot Thursday, Jul 5, 07 @ 8:37 am
The electorate knew that Judy would play ball, that is why they elected the Governor.
Rod is not afraid of very much, Brownie, particularly you, and he is not at the beck and call of the Speaker.Sorry, no GRT-like spectacle today. Try getting the people’s work done for a change.
Comment by Bill Thursday, Jul 5, 07 @ 8:46 am
Bill,
I think he does himself more of a favor and ‘gets the people’s business done’ if he sits in the meeting and argues forcefully for the lease. Also by putting a bill out on the issue he can say he tried.
To be frank I think this way he kind of looks like he is hiding.
Comment by OneMan Thursday, Jul 5, 07 @ 8:49 am
The reason the Governor will not appear today is: He is afraid someone will ask him a question that is not in his prepared script. We already know the Governor is very good at memorizing facts. The problem is comprehending what he’s memorizing.
Comment by Lula May Thursday, Jul 5, 07 @ 8:49 am
the Patriot is right-Cross & Watson need to sack up and use this to the GOP’s advantage. 2008 is a chance for the GOP to make the state legislative races a referendum on Blago/Emil/Madigan’s “leadership” and use this budget mess as Exhibit A.
Comment by Ravenswood Right Winger Thursday, Jul 5, 07 @ 8:50 am
Patriot I blame the voters for this one. Rod’s nifty PR team put out the cutesy “What’s She Thinking?” smear campaign and the voters lapped it up. I’m no big Topinka fan but at least she’s an adult, unlike the little boy we have in charge. As long as Illinoisans remain blind one-party voters we won’t see improvement.
Madigan called Rod’s bluff and the wannabe bully hid behind his aides like a coward.
Comment by Tom Thursday, Jul 5, 07 @ 8:53 am
All Madigan asked is that the governor show up with his ideas on paper in tangible, bill form so as to eliminate the executive fog around the administration’s urgent, stubborn push for votes on something apparently the governor himself doesn’t even know how to make happen.
So the gov sends his minions to do his work for him. Again.
I am politically agnostic, so I have no particular allegiance in the people doing the job — only that the job gets done.
Rod has no idea how to get the job done. Playing games by dodging press, dispatching minions and grandstanding via press release does not get the job done.
People can spin if they want to, but the only people who spin are the ones who refuse to recognize and accept the core truth.
The job isn’t getting done, people. Our leaders are playing games, and our governor is doing ZERO to stop it.
Remove the lot and begin anew. Slash-and-burn politics.
Comment by This Guy Thursday, Jul 5, 07 @ 8:58 am
The Republicans are doing the right thing. If it were reversed the Democrats would be calling a press conference everyday talking about how disfunctional the Republicans are.
The Republicans should be above this bickering.
Comment by Lula May Thursday, Jul 5, 07 @ 8:59 am
So the legislative leaders and Governor failed to complete their jobs in the regular session due to in-fighting and petty personality issues? Then please explain WHY any of them now are rewarded with “overtime” pay to finish?? I propose that if the Governor and legislature fails to complete their budget/work on schedule that THEY pay overtime expenses out of their pockets?? IL taxpayers should not have to pay for their failures and inadequacies….
Comment by North of I-80 Thursday, Jul 5, 07 @ 9:07 am
North of I-80–Totally agree with you, someone down here suggested a law that stated NO other bills can be passed until the budget is passed. That way they couldn’t mess around on unimportant issues when the bigger issue (the budget is getting no progress)
This garbage shows the need for a Con Con.
Comment by He makes Ryan look like a saint Thursday, Jul 5, 07 @ 9:30 am
Maybe Blago is afraid someone will ask about those pesky FBI investigations that he is refusing to comment on. Or release any documents asked for through freedom of information requests.
Comment by Fed up Thursday, Jul 5, 07 @ 9:31 am
Dear Governor -
You have to actually HAVE a pension plan before we can vote it down. We eagerly await the introduction of your legislation.
The Speaker
Comment by Yellow Dog Democrat Thursday, Jul 5, 07 @ 9:42 am
Bill, you are going to have your hands full for the next day or two or three or however long it takes all of these children to agree on a budget. I’ll try to lay off the beating you will get; but please make it easy on yourself as well and try not to defend Elvis too much. There comes a time when you just have realize you are backing a loser. However, we won’t make you admit that either.
Comment by Little Egypt Thursday, Jul 5, 07 @ 9:50 am
People who compared the Governor to George W Bush are looking more prescient all the time. This reminds me of George Bush’s manuever on Social Security in 2005 - “We need to reform Social Security, and we have a moral duty to finally address this problem; I am flexible about how we do it as long as it must contain policies A, B, and C and omit D, E, and F; and now you write out all the details of the plan for me to approve, because I’m not going to propose anything too specific I could get attacked for proposing myself.”
Didn’t work for George W. Doubt it will work any better for Blago.
Comment by ZC Thursday, Jul 5, 07 @ 9:54 am
Since the governor freely admits that he didn’t do well in constitutional law class at law school because he was too busy surfing, perhaps he needs a refresher course on how a bill becomes a law. Rod–pay particular attention to the first and second items on the list!
http://www.ilga.gov/commission/lis/98bill_law.pdf
Comment by Con Law 101 Thursday, Jul 5, 07 @ 9:59 am
This soap opera just gets better and better. It’s actually laughable at this point.
“10:00am, Governor snubs Speaker, hilarity ensues.”
Comment by michael k Thursday, Jul 5, 07 @ 10:11 am
Let’s try to keep our critical faculties and our eyes on the money here…us regular, overtaxed taxpayers, that is.
It doesn’t matter whose fault it is. That discussion is an utter waste of time; Carol Marin should know better. Besides, the problem of exorbitant government pensions coming home to roost is hardly limited to Illinois. It’s a national problem.
Some questions:
What assumptions is the guv using when he speaks of saving 60 billion?
If he sells the lottery, where will he get the money for the schools that the lottery currently generates?
Will a lottery sale result in an increase in taxes somewhere else to cover the loss of school lottery revenues? What taxes? On which segment of the population?
How much is the sale of more bonds (to fund pension obligations) going to add to the state’s current debt. Where will the monies to service the extra debt come from? Higher taxes? Where?
Will there be any effort to reduce the lavish pensions currently granted to state employees…at least for future employees. Or does Blago feel he must generously reward generations of state employees yet to come?
Etc
Comment by Cassandra Thursday, Jul 5, 07 @ 10:18 am
It’s July 5 (#&@!) and we don’t even have a budget on the horizon. What a shame. And now Rod, who is ultimate grandstander, won’t take questions from members of the General Assembly. He isn’t helping matters.
To me, Emil deserves to lose control of the Senate next November. He has a super-majority and can’t get them to agree on much of anything. For all of MJM’s problems, he at least can keep his minions in line and in agreement.
I really do believe Rod thinks the governor’s office is his birthright. He is sending his press people to bash members of his own party, and his top advisors are facing the press and the public. At least President Bush hosts press conferences in the White House blue room.
Comment by Team Sleep Thursday, Jul 5, 07 @ 10:22 am
Little e,
I am not going to spend all of my time during the next few days defending my hero because I admit he is PART of the problem. He is not ALL of the problem. There is plenty of gamesmanship on all sides, including the sainted speaker,who, it should be remembered, really wants his daughter to be governor. It seems that the prime motivation there is to make Rod look really bad which, I admit, doesn’t take much effort.
I intend to sit back, enjoy the hillarity with everyone else, and let demgrrl do most of the heavy lifting.
I wouldn’t bet against some form of health care legislation if I were you, however.
Comment by Bill Thursday, Jul 5, 07 @ 10:23 am
Bill, you are definitely chillin’ out. Actually I’m not betting against anything this session. More power to ‘em if they can pull off health care and find a way to fund it. I agree with you (yet again) that LMadigan is playing into all of this and the big dog MMadigan is accomplishing his goal of making Blago look like a fool. Have a great day and enjoy the blogging. I know I’m going to.
Comment by Little Egypt Thursday, Jul 5, 07 @ 10:27 am
YELLOW!
Comment by Milo's True Colors Thursday, Jul 5, 07 @ 10:28 am
Cassandra, no pension reform until Blago’s last year so he can take care of his people. And even then, I wouldn’t bet the ranch on it.
Comment by Little Egypt Thursday, Jul 5, 07 @ 10:28 am
This executive-legislative gridlock has degenerated into a political farce, with tragic implications for the average person in our state (e.g., the pending mass transit meltdown in the Chicago metropolitan area.)
It makes for good political theater for those few of us paying any attention. But,as far as I can tell, absolutely nothing is getting done.
Maybe we can/should organize a coup on Governor’s Day/Democrats Day at the State Fair. All three top Democratic leaders should be required to fall upon their respective swords.Or maybe we can have a trial by ordeal - it seems entirely appropriate for our feudal system of politics and government.
When will the Democratic leaders of conscience rise up against the excesses of the Democratic trumvirate? Where’s Brutus - Brutti plural?- when we need them? (Speaking rhetorically -completely tongue-in-cheek - not to be taken literally -lest I offend anyone’s delicate sensibilities.)
Comment by Captain America Thursday, Jul 5, 07 @ 10:34 am
Rod has no bills nor plans to present to anyone.
All he want’s is the money and the power, no questions asked.
Never had a plan!
Comment by What ? No Powerpoint ? Thursday, Jul 5, 07 @ 10:37 am
It sure appears to me that the gov has resigned from the budget process. I just hope that Madagin is up to the task of finalizing his budget (the only one in bill form and passed in the House. I’m sure that with his skills in the process that he and Emil can finalize a compromise and get this state back on track. I imagine the gov will have a tantrum and veto it but they can then simply override it and the job is done. They both know we can’t afford grandiose programs and taxing schemes. I see no reason not to end this and let the state progress.
Comment by A Citizen Thursday, Jul 5, 07 @ 10:56 am
SOLUTION!
Madigan, needs to pass about a 52/54 bil budget similar to the last one George Ryan signed. Put an extra 2-4 Bil to solve the pension problems and add a bil for education. Give it to the Gov to sign(he won’t).
Imagine a 56 bil budget, funding pensions and education. Who would not support a bill which addresses two of the biggest problems, and cuts overall spending in an effort to get the state on the right track?
Comment by the Patriot Thursday, Jul 5, 07 @ 10:57 am
This situation has stopped being fun to watch. I’m not sure what they do now. No one can vote on legislation that hasn’t been introduced, but I understand the Gov’s reluctance, remembering that the House had no problem voting on a resolution regarding legislation not before it. I presume there aren’t enough votes in the House to pass a lottery sale or lease, but I could be wrong. However, I would hope both Houses could pass POB legislation, since that continues to be one of the best things (financially) this administration has done.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:00 am
Lula May,
Please. Elected Republicans don’t need to do run on about the Dems when bloggers and columnists throughout the state are doing it for them.
(By the by, your claim is also proved false by Washington Republicans’ and others’ constant carping that Congressional Dems are somehow “doing nothing” which is completely inaccurate.)
Comment by Rob_N Thursday, Jul 5, 07 @ 11:05 am
Does anyone know if the State will have another early buy-out for state employees??
Comment by Curious Thursday, Jul 5, 07 @ 11:06 am
Steve - ” …resolution regarding legislation not before it …” That was the GRT, largest tax increase in the history of the State of Illinois, right? Thank God they had the guts to send that message - Grandiose best describes that taxing plan. Don’t forget the Senate performed a similar “vote” indicating their disfavor of the House’s passed budget bill. Therein lies a good starting point for the Senate. Offer a compromise to the House’s budget. Process, Steve, process.
Comment by A Citizen Thursday, Jul 5, 07 @ 11:09 am
There seems to be a continuing perception by people posting here that President Jones has lost the ability to use his super-majority to pass actions out of the Senate. I don’t think that’s either fair or accurate. I think he’s just being smart by not putting his members on votes that could be election time problems for them, while knowing they’re going nowhere in the House. I suspect that when the time comes he will put the necessary votes on bills that are going to become law.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:12 am
Cassandra, great questions. I suspect the general assembly would’ve liked to ask the guv those very questions if he’d bothered to show up today. What a coward. And a hypocrite. He carried on at his presser announcing the special session that he was calling it to get the members more involved in the process, and make it more transparent to the media. The committee of the whole is all that on a silver platter. But then, no one would should be suprised by the gov’s antics anymore.
Comment by Ellinoyed Thursday, Jul 5, 07 @ 11:20 am
Citizen,
just one point on process; unfortunately, they can’t offer a compromise on the House budget (or anything else) because they’re in a Special Session limited to pension issues.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:20 am
And yes, Steve, that is the most important thing. Right? Making sure his caucus members are re-elected should NOT be more important than taking care of the state’s business. But to Emil, I’m sure it is. And thanks to last November’s onslaught, that fact will not change.
Comment by Team Sleep Thursday, Jul 5, 07 @ 11:29 am
Steve S, 11:12 am: But Emil HAS put some of his members on votes that pose problems for them, such as the SenDems’ huge gaming package that everyone knew was going to crash and burn in the House. Some of the Senate’s “yes” votes for that one came from Dems with existing casinos in their backyards. So much for protecting the supermajority.
Comment by mad dog 20/20 vision Thursday, Jul 5, 07 @ 11:29 am
Agreed, Steve - today. However, the opportunity will shortly arise and the House and Senate should take it to heart and come up with a rational compromise. Not the gov’s grandiose tea leaf musings of Neverland Ranch.
Comment by A Citizen Thursday, Jul 5, 07 @ 11:31 am
Steve, I think you have hit on the root of the problem here. Everyone is stuck in the corner, sucking their thumbs waiting for someone else to come up with a budget deal. Everyone is afraid that any budget that truly addresses the current needs of the state is too politically toxic to have a lead role on. WHAT LEADERSHIP!! No one wants to lead, they just want to protect turf and compare “testicular virility.” Why can’t Jones, Madigan and Cross just go into a room and settle this thing? Everyone else is irrelevant at this point.
Comment by S. Illinois Thursday, Jul 5, 07 @ 11:35 am
Steve - Normally I’m in agreement with you, but I don’t think its correct in this case to say that Emil is withholding votes from targets until their is an agreement.
First, he had no problem putting targets on the rollcall to add four casinos, despite the fact that idea is DOA in the House.
Secondly, as Rich points out in today’s CapFax, the holdouts on the Gov’s lottery lease are Cullerton, Viverito and Munoz, who aren’t targets.
I’ll bet that in addition to those three, there are plenty of other Senators who have serious misgivings about attaching their name to any legislation that combines “Lottery” and “education funding”, because of the widespread public perception that the initiation of the lottery to fund education was a sham, facts be damned. Any lottery deal that ultimately funds teacher pensions could be painted as “Rod Blagojevich’s latest Lottery scheme.” “Democrats gamble on our schools future”, etc, etc.
In addition, it would be foolhardy, based on the Governor’s history, to assume anything other than a lottery lease contract will fatten the pockets of the Gov’s campaign contributors/insider buddies. If you don’t believe me, ask your self why the Governor’s Gross Receipts Tax specifically excluded the lottery lessee from the GRT.
Who really wants to put their name on that “reform and renewal” mess when the story breaks?
If I were Democrats in the House and Senate, I’d insist that any company, including its officers and registered lobbying agents, that has contributed $5,000 or more in aggregate to the Governor over the last five years be prohibited from getting the lease or be involved in the financing of the deal. Love to hear the Gov’s response to that.
Comment by Yellow Dog Democrat Thursday, Jul 5, 07 @ 11:41 am
SI, Sleep
I think we all feel frustration, but this isn’t Mr Smith Goes To Washington. A leader can’t ask his followers to be kamikazes too often, and voting for controversial bills that aren’t going to become law is asking them to do that. BTW, my guess is something akin to the Senate’s gaming bill has a better chance of becoming law than the GRT.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:43 am
Let’s hope Cross and Watson will use this opportunity to rip into the Democrats from the floor. That is where such ripping belongs, and it is long overdue for all three: Blago, Jones AND Madigan, as “Machine Mike” offered a budget that also was out of balance and ridiculous, just less ridiculous than the “Pie in the Sky” proposed by Blago.
Comment by Anon Thursday, Jul 5, 07 @ 11:43 am
One other interesting thing. Did anyone besides me wonder how the Committee of the Whole went from being just the sort of dialogue we were looking for on Monday to a game that speaks for itself on Wednesday?
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:53 am
Just as a reference point to thought processes that occur occasionally in gov’t. : …Megalomania (from the Greek word μεγαλομανία) is a psychopathological condition characterized by delusional fantasies of wealth, power, or omnipotence - often generally termed as delusions of grandeur. The word is a collaboration of the word “mania” meaning madness and the Greek “megalo” meaning an obsession with grandiosity and extravegance, a common symptom of megalomania. It is sometimes symptomatic of manic or paranoid disorders.” attrib.-Wikipedia/DSM IV. Do we know anyone like this? No, it’s not MM, nor EJ.
Comment by A Citizen Thursday, Jul 5, 07 @ 11:53 am
Rob,
We talk local politics here. Yes the local Republicans have behaved very well.
Comment by Lula May Thursday, Jul 5, 07 @ 11:54 am
Steve, I certainly realize this is not, “Mr. Smith Goes to Washington,” and was not proposing that the Speaker or anyone set up their members to vote on bills that will go nowhere. What I am saying is that someone has to show LEADERSHIP and actually start a discussion moving. So far, no one wants to even take the first step. Why shouldn’t Madigan and Jones call Cross into a meeting and discuss an actual budget solution away from the circus calls of the Gov’s office?
Comment by S. Illinois Thursday, Jul 5, 07 @ 11:57 am
SI, when it gets close to that happening is when we will see things start to move. BTW, they would probably want Frank too, both for cover and for a structured roll call.
Comment by steve schnorf Thursday, Jul 5, 07 @ 12:00 pm
This is a first in politicial history — a one party gridlock. Or are the Democrats one Party?
Comment by Truthful James Thursday, Jul 5, 07 @ 12:09 pm
I think the speaker wants Blago to propose legislation so he can get it voted down with embarrassing vote totals.
It occurs to me that the last major impass between the speaker and the governor was resolved when the speaker had to cave in because the domocratic convention was starting and he had to attend. I don’t see anything pressing the speakers time now and he is going to get more than a pound of flesh from the governor this time around. I think it is only just begun.
Comment by Garp Thursday, Jul 5, 07 @ 12:34 pm
Let’s see, how to fix pensions. Well you could try throwing out end of career bonuses that take any new dollars to inflate a state employee’s salary in the last four years of their contract and do away with it. The 20 20 20 plan was replaced with 4 6’s but the end result is an over inflated end of caree salary of which 75% of that will then become their payout per year. If that doesn’t make you mad, then you all don’t get it. This is how this problem got so big. The legislature did this and they could have stopped it but didn’t. Any and all legislation that is set up to do that for ANY state employee Afsme, IFT, IEA, police, firemen, what ever needs to stop.
Establish 401 K where each contribute. Works in the private sector.
Fund the damn thing. Pensions are a liability to the state and quit - I can’t belileve he said this - pointing fingers back at Madigan. I’m not trying to stand up for anyone but selling the lottery is a dumb idea and blaming Madigan for the pension mess is gutless. RECALL, con-con, git ‘r done.
Comment by game plan Thursday, Jul 5, 07 @ 12:37 pm
No, Game, that isn’t how the problem got so big. The reason is, very simply, that the State did not make its required contribution over a very extended period of time, and the interest on that debt that the State owes to the pension systems is more than $3.3 billion each year. BTW, creating a 401k type program would increase the State’s pension expenses over the foreseeable future, not reduce them. We would have to pay the interest on the existing debt, pey off the principal of the existing debt, and make the new current contributions required by the new plan.
Comment by steve schnorf Thursday, Jul 5, 07 @ 12:54 pm
It’s getting really tiresome to hear from Cassandra (and others) about the “lavish” pensions available to state workers. It’s true that the business world has eliminated defined-benefit pensions in favor of 401K plans, but the rules are the rules. State workers pay into the plan and have been promised a benefit, which is far from lavish. It’s a fair pension plan voted on by the representatives of the people of Illinois. The constant sniping does not change that a bit.
Comment by Peoria Pete Thursday, Jul 5, 07 @ 1:07 pm
So much for “Testicular Verility”. 50-odd yards, to walk from his bunker over to the House chamber for a meeting HE insisted on. He can’t walk it. The man has proven to be cowardly in front of the entire state. Cowardly and very, very foolish.
Comment by Rod has dirty end of the stick Thursday, Jul 5, 07 @ 1:12 pm
Peoria Pete. There are more than 1,100 retired teachers in Illinois with pensions over $111,000 per year. Tens of thousands in the $90,000 to $111,000 range. Are you saying the taxpayers of Illinois OWE government union employees more than $100,000 per year in pensions, not even counting healthcare?
In Peoria County, half of your property tax payments are for pensions and benefits. Half. Not schools or roads or crime, but lucrative retirement benefits that are only seen in the real world by greedy Enron corporate types.
The least they could do about pensions is to stop over promising other people’s money. Cap ALL future state pensions at $75,000. No one should become a millionaire pensioner at the taxpayers expense.
Comment by Jeff Trigg Thursday, Jul 5, 07 @ 2:01 pm
The pension debt is a time bomb that needs defusing. But for AFSCME to go along with a major break and switch to 401 K now, even if only for just the very newest members, would be the beginning of the end for them. How could they recruit or keep members if they agree to revoke the pension as it is now contracted? There IS such a thing as the social contract; employees have contributed their labor in exchange for a promised amount in salary and pension. The state can’t break that. But it should never have allowed those late-in-service artificial bumps. That was cowardly, and lazy to boot: foisting off the actual payments on other people’s watch. The pension reform has to start there. Then we have to see if there is a way the state can use the deposited money, such as it is, to get a higher ROI where it has been invested.
Comment by pension bomb Thursday, Jul 5, 07 @ 2:04 pm
The 4 leaders have to put an end to this nonsense
! The four of them should sit down with Elvis, explain to him the basic constitutional provisiions governring the situation–The Governor CANNOT make laws (including a budget) without them, BUT they (the House and Senate) CAN enact laws and a budget without the Governor. It takes the same number of votes to override a veto as it does to pass the budget now. Then, they tell the Governor to grow up, start being cooperative, stop the “special session” nonsense OR the 4 leaders will start meeting without him, craft a budget without him, and pass it into law without him! The Governor then becomes totally IRRRELEVANT. It’s time to play hardball!
Comment by Ivote Thursday, Jul 5, 07 @ 2:12 pm
I know, Steve, but it would nice to see some of these new members suck it up and vote for “controversial” legislation. They all ran smart, respectable and hard-working races, but now is the time to fulfill their campaign promises and not pass the blame on the governor or Emil. And since a couple of the Fab Five are up next year, a working budget looks better than gridlock.
The state’s pension and road funds are the state-level equivalent of the Social Security trust fund. Congress can’t keep their hands out of the cookie jar, and when anyone gets his or her SSA statement each June you will now see an insolvency warning. In 10 years - 10!!! - Social Security will morph into a single-payer system and in 2041 the funds will be exhausted. Of course, Medicare is a whole other ballgame. And the state pensions don’t look much better. State employees are already putting extra per-paycheck allocations into the system, but we can’t seem to catch a break. But selling the lotto or the tollways or the Thompson Center or Abe Lincoln’s nose won’t solve the issue long-term, either.
Comment by Team Sleep Thursday, Jul 5, 07 @ 2:19 pm
Yes, Jeff, we do owe them. I’m surprised you don’t know that. The question is why we haven’t paid them, not do we owe them. From your post I take it you must live in Peoria County. In that case, you and your fellow residents elected the County Board members that are acting in a manner unacceptable to you. It’s called representative democracy.
Comment by steve schnorf Thursday, Jul 5, 07 @ 2:24 pm
Steve, with all due respect, the end of career is one of the reasons it has expanded. Yes, the state not making payments is the lions share but the inflation of salaries over the last 15 years has not helped the situation at all. 401 K would work if one would take the newbies signing up and move them into a 401 K process. SOMEWHERE this insanity has to stop so give some solutions because this pension plan is not working. In fact look at all the large companies that out and out said we’re done with pensions and moving to 401k. BITE THE BULLET and come up with a solution.
Comment by game plan Thursday, Jul 5, 07 @ 2:29 pm
Leasing the lottery is a bad idea and most of the dems know it, but the key is do they dare tell blago and jones no sale.
Comment by FED UP Thursday, Jul 5, 07 @ 2:36 pm
Steve –
I understand that you were State Budget Director — one of the really tough jobs. During your aegis, were the pernsions fully funded each year? If not, did you bring this to the attention of the public? How abouth the performance of your successors?
Were the Teachers, for instance, over burdening the system with the accelerated early retirement benefits which now burden their pension system? If they were, what public comment did you make regarding the budgetary effects of this rolling boondoggle, which is even now not fully corrected?
Comment by Truthful James Thursday, Jul 5, 07 @ 2:37 pm
Yes, Steve, unfortunately and almost criminally we do owe those million dollar pensions. Add the word should in there and the meaning comes out better. Should we owe them $111,000 a year pensions? That answer is no.
I lived in Peoria County, and they do deserve some of the blame, but Madigan’s led House gets more of it. They (with Pate and all) set the rules (and the example) for the Counties and made most of the stupid pension promises. It’s painfully obvious we can’t afford to make those pension promises any more, but none of the Democrats will even touch it as we are witnessing today?
Comment by Jeff Trigg Thursday, Jul 5, 07 @ 2:45 pm
I have one of the higher paying jobs at IDOT, and when I retire in a few years I will make about $40,000 a year in pension benefits. Since medical coverage is not constitutionally guaranteed like pensions in IL, I expect this is one area where state retirees will be expected to pony up more in the future.
Mention of all these $100k+ “lavish” pension benefits makes me (and probably 99.9% of SERS-covered state employees) somewhat envious and wondering whatever happened to the “lavish” benefits I am supposed to be getting.
Comment by IDOT'er Thursday, Jul 5, 07 @ 2:51 pm
IDOT’er what happened is that your unions aren’t the number one and number two campaign contributors in the state of Illinois, like the two teachers unions. And your pensions and benefits suffer (relatively…) because of that. And you work year-round, imagine that.
Comment by Jeff Trigg Thursday, Jul 5, 07 @ 3:04 pm
Jeff, you’re way off base on the teacher pensions. No way there are “tens of thousands” of retired teachers with $90,000 plus pensions. The total count of retired teachers is 80,000 and their average pension is $35,000. To call that “ENRONesque” is a bit much.
Comment by Arthur Andersen Thursday, Jul 5, 07 @ 3:06 pm
This is not about lavish, it’s about inflated career ending bonuses that the general public does not partake in.
Adding 20 20 20 to a salary which inflates ones salary -
Example $65,000 * .20 = 13,000 = $78,000
78,000 * .20% (15,600) = 93,600;
93,600 * .20% (18720) = 112,230
112,230 * .75% (the retirement pensioned % of salary amount) = 84,240 as a pension.
SB27 last year and SB 29 fixed the 20% to 6% but when compounded comes out to be nearly the same as 20, 20, 20. Listen to the debate on these bills and you will realize how detrimental to the health of the pension system this is. Don’t let any teachers union folks tell you it’s about administrative salaries - some of it is but teachers when you’re at career end at 65,000 move, as you see above to the 100K fairly quickly.
Comment by game plan Thursday, Jul 5, 07 @ 3:08 pm
Game plan-
I do not agree 4*6’s is nearly the same as 3*20 when compounded.
By the way, I do agree that a 6% raise seems reasonable for all but the most exceptional employees, public or private sector.
Here’s the math using your example:
20/20/20
Example $65,000 * .20 (13,000) = $78,000
78,000 * .20 (15,600) = 93,600;
93,600 * .20 (18720) = 112,230
112,230 * .75 (the retirement pensioned % of salary amount) = 84,240 as a pension.
6/6/6/6
Example $65,000 * .06 (3,900) = $68,900
68,900 * .06 (4,100) = $73,000;
73,000 * .06 (4,400) = $77,400;
$77,400 * .06 (4,600) = $82,000;
$82,000 * .75% (the retirement pensioned % of salary amount) = $61,000 as a pension, saving about $23,000 per year over the 20/20/20 plan. And I didn’t even back the $65 k up a year to compare apples to apples.
Comment by IDOT'er Thursday, Jul 5, 07 @ 3:23 pm
State pensions are hardly “lavish” with the average annual benefit totaling a whopping $18,000 per year. That is somewhat less than state employees would receive from social security if they were eligble for it, which most are not. Actually, if all state employees were to be covered by SS and a defined contribution plan, the cost to the state would be MORE than the current pension plan. The IRS would not allow any “holidays” regarding the state’s contribution each year like the GA does with the state’s pension obligations. The state would have to actually match their employees contributions of over 6% of payroll on time each year plus pay the interest on the debt already incurred,plus any match in the “401k”.
The pension problems stem from the 25 years of chronic under-funding highlighted by the infamous SB 27.
Pumping 26 billion(or 36 with the lotto lease) into the funds now would SAVE the state many more billions in the next few decades. The interest saved would more than offset the loss of $600 million from the lottery each year.
The Gov’s plan works and should be adopted.
I guess it is more fun, however, to talk about Rod’s travel habits and other nonsensical traits. If Rod and Emil are for it, the Speaker and his dolts in the so called Dem caucus will be against it whether it is good policy ot not.
By the way, explain again,please, how 6% per year compounded for 4 years is “almost the same as” 20%X3? That makes as much sense as the rest of your argument.
Comment by Bill Thursday, Jul 5, 07 @ 3:31 pm
Bill, then why hasn’t the Senate taken up the guv’s Lottery plan? He proposed it months ago. They could’ve voted on it before the end of May.
Answer? They don’t have the votes. Blaming the House is the easy way out. Admitting you have a problem is a good first step to recovery.
Comment by Rich Miller Thursday, Jul 5, 07 @ 3:35 pm
Rich,
I guess that you have a point. I am not blaming the House exclusively. The Senate and Gov should equally share in the blame.
Comment by Bill Thursday, Jul 5, 07 @ 3:47 pm
I just choked on my coffee.
Comment by Rich Miller Thursday, Jul 5, 07 @ 3:48 pm
By the way, there seems to be more meaningful debate on the pension issue here on the ol’blog than there is on the floor of the House…and most of us are not even getting the per diem.
Comment by Bill Thursday, Jul 5, 07 @ 3:50 pm
Holy Cow! Can that 3:47 post be memorialized somehow?
Bill, I agree with you on the debate. I’m dizzy from all the numbers being tossed around.
Comment by Arthur Andersen Thursday, Jul 5, 07 @ 4:04 pm
This whole “Average pesnion” is a beard. You have in the the teacher’s Fund high pension AND early retired people who got the 20-20-20 deal and you have a lot of earlier people who do indeed have lower pensions. You need to look actuarily at the life spans remaining to get the full flavor.
Comment by Truthful James Thursday, Jul 5, 07 @ 4:08 pm
A more meaningful “average pension” # would look 5, 10, 15 years down the road, to see what future pensioners + existing pensioners would be owed at that time. The 401k solution doesn’t do a thing for the state until 20-30 years down the road when twenty- and thirty-something potential state hires retire. Until then, the state would simply be exchanging a mortgage payment on defined-benefit pensions for a matching payment on a 401k, plus or minus a few bucks.
Short of some kind of financial trick to sell state assets to eat up the defined-benefit interest obligation, I’d say the state ought to concentrate its efforts on saving more money and making more money to pay the bill, by better retirement system investment returns, higher employee contributions and limiting “new” benefits. There might be a better way to do it without eating the seed corn of revenue-producing state assets like the lottery and tollway.
Comment by Six Degrees of Separation Thursday, Jul 5, 07 @ 4:29 pm
If new hires are in a 401k type plan, their contributions would then go into their plan, not to fund the existing liabilities of the current plan. What then? GRT? income tax hikes? bankruptcy? Be careful what you ask for.
Comment by Bill Thursday, Jul 5, 07 @ 4:37 pm
James, each year I was budget director, the State contributed the amount required by the ‘95 pension reform law. No credit to me, but to the Governors I worked for. That was less than the actuarial number, and the purpose of the ramp-up. It never occured to us not to. Granted, until the last year (FY02) we were not faced with the financial problems that this Governor faced when he took office. However , Governor Ryan’s FY 03 budget made the entire statutorily required contribution, even though he reduced total GRF approps to below the FY01 level.
But, your underlying question is did I publicly say the things I say now. When I was asked the question, I answered truthfully but I didn’t take out ads in newspapers decrying the situation; but again, we believed that the 95 plan was viable and that it would suffice to solve the problem, and as long as natural revenue growth had continued at close to a billion annually, it would have. It would have pinched but it could have been done. When revenues actually fell for 2 straight years, I believe it changed what was possible.
Comment by steve schnorf Thursday, Jul 5, 07 @ 4:55 pm
I am assuming the new hires will not be bringing a lot of pension $ for 10 years anyway. Is there anything in state law to prevent current employees from funding 1% or 2% more of their own pensions? There’s a lot more potential pension contribution$ in higher-income current state employees than there is in entry level new hires anyway. A solvent pension system is in their best interest as well as the state’s.
Comment by Six Degrees of Separation Thursday, Jul 5, 07 @ 4:57 pm
Steve,
So you are finally admitting that the 95 time bomb was not a good idea and was based on faulty revenue assumptions. Yes, the state paid the woefully inadequate contributions required by the ramp in the late 90s when the ramp was almost flat while putting the real problem off until the distant 2000’s when it would be someone else’s problem. The Ryan early retirement plan just exacerbated the growing problem.
Basing any solution today on increasing revenue growth going forward is just as foolhardy. We need to pay off some of those billions of debt now and free the state from the ever growing compounding liabilities and interest. What is it now, about 46 Billion? No ramp is going to solve the problem. It will just extend the problem further into the future.
Revenue from somewhere must be deposited into those plans. Lottery, tollway, governor’s mansion???Whatever!
Comment by Bill Thursday, Jul 5, 07 @ 5:22 pm
Six Degrees, all sides of this debate generally agree on a few things. A couple of those are that the employee contributions are among the highest in the country for the level of benefits and that the investment returns for the systems have been quite good over the years. (Certainly better than AA’s own investments)
The problem is the State has not paid its fair share of the pension bill for about 30 years.
Bill, let’s not forget that part of the “Ryan early retirement plan” was paying it off over 10 years. Blago did some “exacerbating” of his own by rolling that bill into the 50 year funding plan.
Let’s face it, no one who has been around here very long really has a pristine record on this issue.
Comment by Arthur Andersen Thursday, Jul 5, 07 @ 5:39 pm
No, Bill, I’m not. The $200-$400 million per year of the ramp-up COULD have been tolerated as long as revenues continued to grow. As I said, it would have pinched and certainly it would have required a discipline more in line with the early 90s. Edgar repeatedly said he wouldn’t agree to spend money the State didn’t have, and he wanted old bills paid off before there would be program expansion or new programs (e.g., Kidcare, subsidized child care, etc). I believe Gov Edgar intended for the ‘95 law to impose similar disciplne on the State in the future. I don’t think any of us ever thought that future administrations would evade the law, but I can also guarantee you that none of us ever thought state revenues would fall 2 years in a row.
Had Governor Ryan had another year to go in his administration, I don’t believe that we could have proposed a balanced 04 budget without a tax increase or doing some of the things the current administration has done. I believe Gov Ryan would have proposed an income tax increase. He fully understood that it needed to be done and that he had no popular approval left to lose.
Comment by steve schnorf Thursday, Jul 5, 07 @ 6:02 pm
Since the Bush tax cuts, it is my understanding that all states received a windfall of sales tax revenue as well as individual income tax and perhaps other income tax reveneues themselves.
Why was only Illinois exempt from that windfall?
Or was it merely the special earmarks and member projects as well as the governor’s slush funds which on the side and out of he sluices picked up this largesse?
Comment by Truthful James Thursday, Jul 5, 07 @ 6:37 pm
Steve, you’ve still got it. Too bad GoverNOT Speechify doesn’t tap into your knowledge and expertise. He could certainly use someone with experience and history of this State’s finances about now. It doesn’t appear that Blago or any of his “finance” people know which end is up.
Comment by Little Egypt Thursday, Jul 5, 07 @ 6:44 pm
I found an interesting link while starting to research this issue.
http://www.nasra.org/resources/Key%20Facts%20on%20Public%20Employee%20Retirement%20Plans.pdf
I wonder how IL stacks up against these national averages, what the other states are doing right, and what IL is doing wrong if it is not in league with similar state pension systems.
Comment by Six Degrees of Separation Thursday, Jul 5, 07 @ 6:54 pm
Scorecard for today’s Special Session: Gov-NO SHOW, Emil-WENT HOME EARLY, very early, Madagin and the House Membership-WORKED HARD all day, and it was a long day! Guess that is proof of where the active LEADERSHIP is in state government. Any solutions are going to come out of MM’s shop as the others are AWOL.
Comment by A Citizen Thursday, Jul 5, 07 @ 7:06 pm
And here’s 2 opposing views on defined-benefit vs. 401 style public pension plans.
For defined-benefit:
http://www.nasra.org/resources/NASRA%20Reason%20Response.pdf
For 401-style:
http://www.reason.org/news/pension_reform_061605.shtml
Comment by Six Degrees of Separation Thursday, Jul 5, 07 @ 7:08 pm
Toward the end of today’s session Madagin made special recognition and a gracious welcome to Lt. Governor Pat Quinn. Is Quinn coming up to speed in preparation for assuming the Governor’s Office?
Comment by A Citizen Thursday, Jul 5, 07 @ 7:14 pm
IDOT;;
I don’t know how the state’s actuaries would calculate the present value of a $40,000 SERS pension but I would think it would be in the $500,000 range, at least. Remember, there is an automatic 3 percent increase every year. And pension income is not subject to state tax in Illinois. Add on Social Security and free (no premium) state health insurance with a very low deductible–that looks pretty lavish to a lot of Illinoisians who don’t work for the govt. Especially since they have to pay for the pension and the health care while they save for their own retirement.
I am not convinced that transition costs would doom a switch to a defined contribution system but that’s probably not realistic in a Dem administration. But state employees and teachers could pay more for the pensions and more for health insurance….it shouldn’t be an all or nothing deal for us taxpayers who are paying the freight.
Comment by Cassandra Thursday, Jul 5, 07 @ 9:10 pm
To go back to the 20’s and 6’s I showed compounded in the 20s. In some contracts it was not a compound but a straight $13,000 added to each of the 3 years and in some 20% compounded. Every contract is negotiationed and very few look the same. The arguement isn’t about the % being added on — its the “gift”/ bonus that some contracted employees of the state receive. It’s new dollars that need to go to funding pensions and not giving it to employees as they leave. Please don’t play the game “it’s a savings” - no it is not, it’s dollars leaving government bodies that could use it for programs. It is increasingly rare except in ceo cases where people have a golden parachutte. In fact in cases such as SBC, United, pensions are no longer available. A contributed amount is available via 401 k or some other type of employee / employer contribution. What also needs to really be looked at is some type of health care after you retire program as most people no longer have health care when they leave employment.
I appreciate the history lesson here but I’m not seeing anything that will move people off of center. There are so many basic needs and yet we keep giving away the store. I believe them when they say if no new revenues the only thing they can afford is medicare and pensions - you have a horrific problem for the state. Get off of center, fund the pensions, ease off the pensions for the newbies and grow your own or move the current money (dollars given by employees) into 401ks and let them roll it.
Comment by game plan Thursday, Jul 5, 07 @ 9:18 pm
And pension income is not subject to state tax in Illinois.
(This is true for ALL retirees, not just state retirees)
Add on Social Security
(Which state employees are TAXED on just like everyone else)
and free (no premium) state health insurance with a very low deductible
(Ummm, when I was on the state’s plan I had about $1000 out of pocket for a newborn. Then I switched to HMO. I am currently paying $200 a month for my HMO family plan, $15 copay for doctor visits and $10 for prescriptions IF they are covered, which they sometimes are not)
–that looks pretty lavish to a lot of Illinoisians who don’t work for the govt. Especially since they have to pay for the pension and the health care while they save for their own retirement.
(We have to pay $$$ for our health care, see above, and retirement also, remember the 4% pension contribution that was added 4 years ago)
I am not convinced that transition costs would doom a switch to a defined contribution system but that’s probably not realistic in a Dem administration.
But state employees and teachers could pay more for the pensions and more for health insurance….it shouldn’t be an all or nothing deal for us taxpayers who are paying the freight.
(I don’t doubt that the budget crisis will be put on our backs even though the state employees are the ONLY ones who didn’t miss a payment during the under-funding).
Comment by IDOT'er Thursday, Jul 5, 07 @ 9:55 pm
For those of you who continue to believe that defined benefit plans have disappeared, I remind you that the last time I checked the data that among very large highly unionized employers (the state’s peer group), the number of defined benefit plans hadn’t declined at all. For better or worse, you can’t compare the State to a corner market or a small business of any kind, nor to the Walmarts of the world who aren’t unionized. Compared to other very large heavily unionized employers, our defined benefit plan is the rule, not the exception, and our pension benefits are modest.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:08 pm
Egypt, you’re being too hard on them and too kind to me. Part of the problem they face is the pledge of no income or sales tax increases; Filan is a brilliant guy, but he operates within the structure that pledge creates. In the same situation, I don’t have a single suggestion on what should have been done differently.
It would be facile for me to say they should have held spending increases down, but that wouldn’t deal with the fact that they have a D GA. Look at what’s happening now with the Speaker trying to hold spending down for just one year.
Comment by steve schnorf Thursday, Jul 5, 07 @ 11:31 pm
C’mon Steve.
don’t you feel guilty. I mean you stuck this admin with the $500 trillion deficit that keeps Rod from curing cancer, making sure every child can read at birth and ensuring college is free.
Shame on you.
Comment by Michelle Flaherty Thursday, Jul 5, 07 @ 11:57 pm
Much of the problem with end of career pension funding rests with the state to be sure. The remainder lies with the local school boards who were cozzened by the local unions well knowing that they would not have to pay the freight under triple 20. The legislature did not have the cojones to cut it out completely so they approved the triple 6, telling the locals any more than that and they would have to make contributions.
The legislature cut the baby in half.
Comment by Truthful James Friday, Jul 6, 07 @ 11:14 am