46 Comments - captain fuzz - Monday, Mar 9, 09 @ 9:34 am: It wouldn’t hurt for future retirees to begin paying a portion of their health insurance. If nothing else, base the premium amount on their years of service prior to retirement. The Union balks at the idea, but it’s past time to make sacrifices. - Yellow Dog Democrat - Monday, Mar 9, 09 @ 9:36 am: LOL. I love the poll. “Increase the state income tax”, but doesn’t mention any of the things that would likely be pared with an income tax increase, like an increase in the standard deduction or providing property tax relief, or that it would have a sunset date. I’d call this GOOD NEWS for advocates of an income tax increase. 1 in 4 voters support an income tax increase before they even know how high it would be or where the money would go. I’m surprised the pollsters didn’t toss in another revenue option: Taxing insurance industry profits. With Allstate and State Farm headquartered here, taxing insurance industry profits could surely help balance the budget. Whaddya think ~ about 75% of voters support taxing the insurance industry? - James the Intolerant - Monday, Mar 9, 09 @ 9:45 am: I couldn’t agree more with the increase participation by 1% for public employees in the pension. And all municipal/state agencies should pick a date, let’s say Jan. 1, 2010, after which no employees hired after that date will particpate in the pension. 401K will have to do. The public can’t afford it. - VanillaMan - Monday, Mar 9, 09 @ 9:45 am: Regardless of how the question were phrased, the sentiments are correct. Illinoians are screwed and are angry. They will not pay more for the crappy state government they have gotten over the past decade. Raise taxes at your own risk. Go ahead and mock Illinoians who don’t want their taxes raised. Go ahead and call them stupid, or ignorant, or whatever - but they vote and they are a majority. That is the political reality the pro-taxers face. - Reality Check - Monday, Mar 9, 09 @ 9:47 am: There are many, many problems with the Msall report, but I’ll just throw out three for discussion. One, with respect to his proposals to cut pensions and/or health care for public employees and retirees, Msall makes no claims about what his cuts would save. I suspect this is because the amounts are so paltry they would be laughable when measured against a $9 billion-plus current shortfall. But we can’t evaluate whether the real pain for retirees is “worth it” if Msall won’t show his work. Two, also with respect to pensions, Msall provides no wider context in which to evaluate his contention that benefits should be cut. This is a serious sin of omission, because in reality, Illinois public pension benefits are low to average any way they are measured. Compared to other Midwest and large states and to private sector employers of comparable size, the normal cost of Illinois public pensions is low, the SERS annual multiplier is low, its average annual benefit is very modest. There is simply no justification in fact to reduce benefits - so Msall omits the facts. Three, there’s likewise no justification to increase the employee contribution. The whole funding problem is caused by the state failing to pay its share. Public employees have always paid their portion, faithfully and in full, by deduction from their paychecks. - fedup dem - Monday, Mar 9, 09 @ 9:48 am: I support pairing an increase in the Illinois Income tax with an increase in the standard exemption, thus making the tax more progressive. If Republicans object to that (because they would be paying a fairier share of the tax burden than the poor Democrats), remind them that money doesn’t grow on trees and pass the the porposal anyway! - Rich Miller - Monday, Mar 9, 09 @ 9:53 am: ===The whole funding problem is caused by the state failing to pay its share.=== Partly true. But there are those who believe that state workers don’t pay enough for the benefit. - Reality Check - Monday, Mar 9, 09 @ 9:54 am: Captain Fuzz said: It wouldn’t hurt for future retirees to begin paying a portion of their health insurance. If nothing else, base the premium amount on their years of service prior to retirement. That’s exactly how the system already works. Retirees pay premiums that are reduced by 5 percent per year of service. Only retirees with 20 or more years of service pay no premium at all. And of course retirees make co-pays for drug costs, doctor visits, etc. like any other health plan participant. - Anonymous - Monday, Mar 9, 09 @ 10:06 am: ===The whole funding problem is caused by the state failing to pay its share.=== This is a little deceptive. The employee share is fixed. The state “share” is open ended, since the benefits are defined and the state has the legal obligation to pay the benefits, regardless of inflation, investment returns, etc. There’s nothing written in stone that the current employee share is the “right” amount, or even fair, given the substantial benefit employees receive from having a defined benefit pension [very few folks in the private sector get that any more]. - Reality Check - Monday, Mar 9, 09 @ 10:23 am: @ Anon 10:06 You’re right there’s “nothing written in stone”. It’s subject to collective bargaining. Under current terms employees on the standard formula pay 4 percent. A new contract was settled six months ago and no changes were made to that status quo. However, if you’re trying to imply that the state’s costs are too high, that is simply not supported by facts. The normal cost across all five public pension system - not just SERS - is 9 percent of payroll. The national average is 12.5 percent. Finally to your claim that employees receive a “substantial benefit”, here’s the facts: On average, a retired state employee today gets about $1,400 a month. That’s less than $17,000 a year. It is almost exactly at the national average for state and local governments. And it is certainly not exorbitant, I hope you will agree. So benefits are modest and in line with national averages. Normal cost to the state is significantly lower than the national average. Where’s the problem? The state failed to make its payments in the past. That is the problem. Period. - Former State Employee - Monday, Mar 9, 09 @ 10:49 am: While this will not solve the state’s budget problem, it would be viewed as a “good faith effort”…the pension’s in the legislature should mirror regular state employees….years of service, % of benefits, etc. - Six Degrees of Separation - Monday, Mar 9, 09 @ 10:50 am: You’re right there’s “nothing written in stone”. It’s subject to collective bargaining. A heavily unionized state workforce would seemingly not be inclined to give back benefits, especially if they could prove that the pension mess was largely caused by prior state “restructuring” of its payback obligations. And if they are willing to bargain on this, they are going to want something in return. Further complicating the issue is Obama’s push on national healthcare (which will necessarily affect the state’s plans for its workforce and retirees). - Princess - Monday, Mar 9, 09 @ 11:01 am: One of the main problems with the QC health insurance option is the restrictions. Families with college students can’t take a HMO on and have their student covered, same with the retiring employee who choses to ‘go south’ to live out their later years–the HMO is regional. Actually the majority of currently employed peon level employees carry a HMO. I doubt you’ll find many workers/unions jumping on to support higher employee cost of their healthcare while currently they faithfully pay their premiums every month and their share of deductibles and co-pays but then find the state not paying their share and having providers and collection agencies chasing them around for the services rendered. - Cassandra - Monday, Mar 9, 09 @ 11:14 am: It’s hard to tell which way our Dem majority legislators would jump on a tax increase. Even if polls suggest thatthe bulk of taxpayers are against income or gas tax increases, most legislators run unopposed in heavily gerrymandered districts, so how scared would they be. When I wrote my local state senator, Don Harmon, about tax increases I got back a snippy little missive which said, in effect, that I was lucky to live in a state which had so few state employees. I hadn’t mentioned employee cuts, just cuts in general and corruption in particular. And this defensive response comes from a fairly prominent state senator, suggesting that cuts aren’t on our fearless legislators’ mind, but taxes are. As to the earned income tax credit, how far into the middle class can it apply without defeating the purpose of tax increases in the first place. Can we assume there is no consitutional limit, so it could be used to bail out the middle class as well as the so-called poor. Kind of a convoluted way of getting money from the wealthier members of our Illinois society. And will the corporate sector be taxed to the max possible in tandem with an individual income tax increase. Or, unlike the middle class, will they be spared in the interest of economic recovery and, of course, campaign contributions. - wordslinger - Monday, Mar 9, 09 @ 11:16 am: Changes in pensions and benefits for new hires seems to be low-hanging fruit. If you can’t do that, what can you do? - Yellow Dog Democrat - Monday, Mar 9, 09 @ 11:33 am: Reality Check - The Reality is that the Civic Federation is philosophically opposed to ANY defined benefit pension for public employees. If it were up to the Civic Federation, the pension and health care system for government retirees would be replaced by a 401(K) and a medical savings account. I’d like to see the health and pension benefits of the Illinois retirement system stacked up against the CEO’s and top executives of the corporations that comprise the Civic Federation. THAT would be a useful context. - Vote Quimby! - Monday, Mar 9, 09 @ 11:44 am: ==believe that state workers don’t pay enough== into a system of proven corruption and lax oversight. Last fall a co-worker was tracking payments into her self-guided account, and even her own deductions were not posted for days and the state match was generally months late. I can’t imagine being in or close to retirement from the state, watching and worrying if it will take a court order to get your monthly pension check. I agree something should be done, but let’s not keep pouring water into a leaky bucket. Fix TRS, SURS and the other state pension (including the judicial/legislative one!) boards. - Yellow Dog Democrat - Monday, Mar 9, 09 @ 11:45 am: “We must reject the idea — well-intentioned, but dead wrong — that the primary path to greatness in the social sectors is to become “more like a business.” Most businesses — like most of anything else in life — fall somewhere between mediocre and good. Few are great. When you compare great companies with good ones, many widely practiced business norms turn out to correlate with mediocrity, not greatness. So then, why would we want to import the practices of mediocrity into the social sectors?” - Jim Collins, best selling business author and researcher “Good to Great and the Social Sectors”, introduction - prowler - Monday, Mar 9, 09 @ 11:48 am: YDD A Comparision of the health and pension benefits of the politicians (Gov, reps and legislators) agianst rank and file state workers would give you further useful context. - prowler - Monday, Mar 9, 09 @ 11:49 am: Sorry about the spelling error! A Comparision of the health and pension benefits of the politicians (Gov, reps and legislators) against rank and file state workers would give you further useful context. - Pot calling kettle - Monday, Mar 9, 09 @ 11:51 am: As someone in a state pension system, I agree that the retirement age needs to be raised. The productive work life of the average worker must be close to 70. People live too long to be put out to pasture at 60 or 65. What should not change is COLA. To limit COLA to 2% is not fair to the retired person and could send them into a slow decline to poverty. - Scooby - Monday, Mar 9, 09 @ 12:31 pm: Quinn is going to have to pass a pretty substantial tax increase. The Speaker will hang him out to dry on it for as long as possible to try and protect his members. This will create an environment where it’s tough to get re-elected. If Quinn was smart he’d insist on sunsetting the tax increase for, I don’t know, say the day after the inauguration in 2011. If it’s going to cost you the election you might as well stick the next guy (or girl) with the same problem. - James the Intolerant - Monday, Mar 9, 09 @ 12:41 pm: YDD-how about comparing public employees pensions and benefits against employees of those firms that make up the federation, that is a more fair comparison. - Six Degrees of Separation - Monday, Mar 9, 09 @ 12:48 pm: To limit COLA to 2% is not fair to the retired person and could send them into a slow decline to poverty. If you raise the retirement age high enough, you won’t have to worry about too many COLA’s:-) - Six Degrees of Separation - Monday, Mar 9, 09 @ 12:50 pm: how about comparing public employees pensions and benefits against employees of those firms that make up the federation And even more fair if the selected firms are highly unionized and employ several thousand in the state. Apples to apples, as AFSCME would contend. - Just a Citizen - Monday, Mar 9, 09 @ 1:27 pm: I agree with Vanilla Man—raise taxes at your own risk. Now is not the time if you want to be re-elected. If the Unions want to keep jobs for their people, now is the time to make some sacrifices. Raise retirement age to 67 right away. Increase employee contributions towards the pension fund. Every retiree should pay some towards their health care premiums– no matter how long they worked for the State. Suspend the COLA for 2010 as a ONE time cost cutting measure. Review and cut programs. There is still fat out there. - Hoping For Rational Thought - Monday, Mar 9, 09 @ 1:32 pm: Rich, I’m knowledgeable when it comes to Medicaid. That $700 million looks way too high. They seem to be referencing the Institutions for the Mentally Diseased(IMD) rule in federal regulations but $700 million is much more than what is not matched on because of this. I read the report and there is nothing to substantiate this number. So who is their “Medicaid expert”? This is a big whoops because they are implying that more than $350 million is being left on the table. The last thing we need is the GA spending this mythical money…especially since they probable will spend it twice! - Proud Goo-Goo - Monday, Mar 9, 09 @ 2:30 pm: —”About 65 percent of the gasoline sold in Illinois is purchased in the Chicago metropolitan region, according to the Illinois Petroleum Institute. Yet, less than half of the road spending is traditionally focused in that area.”— This surprises me not at -all. I recall being rather surprised to see I55 expanding one year from 4 lanes to 6, when no matter the time of day, there was only a trickle of cars. Later I came to understand into whose districts and for what reasons, the IDOT money rolled. In Washington State, BTW, the Senate Transportation committee is giving ZERO in its stim money to the Seattle area. Seemed very familiar. - steve schnorf - Monday, Mar 9, 09 @ 2:37 pm: The Report almost entirely ignores the fact that the state’s workforce is heavily unionized, and almost all of the proposals involving pensions and benefits would have to be collectively bargained. I anticipate that will be a fatal flaw for much of what they propose. - Six Degrees of Separation - Monday, Mar 9, 09 @ 2:50 pm: Goo Goo- The 6 lane construction between Lincoln and Springfield was done as part of the original I-55 construction, and was meant to handle the extra traffic from I-155 (Peoria to Lincoln) that was built later on. Was it necessary? Maybe not. I guarantee the expansion of I-55/74 to 6 lanes around Bloomington-Normal was much needed; ask any local what it was like in the good old days. And now (finally!) we have a 6-lane I-55 in Will County, north of I-80, which was very much needed. The saw about who pays the gas taxes and who benefits between Chicagoland/downstate is an old one. By highway mileage, downstate should get 80% of the money. By population, Chicagoland should get 2/3 of the money. The current and longstanding formula of 55% downstate/45% Chicagoland is an attempt to balance the two imbalances. The recent stimulus proposal hit 55/45 fairly close to the mark. - Yellow Dog Democrat - Monday, Mar 9, 09 @ 2:53 pm: — YDD-how about comparing public employees pensions and benefits against employees of those firms that make up the federation, that is a more fair comparison. — James the Intolerant: I’m sure if the CEO’s want to screw public employees, they’re already screwing their own employees. Two wrongs don’t make a right, they just double the hypocrisy. - Yellow Dog Democrat - Monday, Mar 9, 09 @ 3:00 pm: So buried you might have missed it Also from the Chicago Civic Committee’s recommendations: Sunsetting of State Tax Incentives and Exemptions. The Civic Federation endorses state efforts to end outdated and economically inefficient corporate tax deductions or credits, often characterized as “loopholes.” We believe as a matter of principle that tax exemptions and benefits should be sunsetted and their renewals debated and discussed, not continued indefinitely. Evaluation and Reporting of the Economic Benefits of State Tax Incentives, Credits, and Exemptions. Tax incentives, credits, and exemptions are usually authorized on the basis of producing jobs or economic development. However, little effort is made to consistently quantify and report the actual benefits produced. The Civic Federation believes that the state should provide evidence that tax credits or reductions granted actually produce the benefits promised through ongoing evaluation processes and that the results of such evaluations be made public. If no evidence can be produced of the beneficial impact of a tax incentive, the General Assembly should seriously consider repeal of that incentive, credit, or exemption. The lack of objective beneficial evidence led the Civic Federation to support repeal of the following two credits in its FY2009 budget analysis: - The Research and Development Credit because there was little objective evidence that the credit has actually increased research and development activities; and - The Manufacturer’s Purchase Credit because we had not seen any evidence of the effectiveness of this credit. According to Comptroller Hynes, Illinois businesses receive $1.7 BILLION annually in tax breaks (FY ‘07). I say we take the Chicago Civic Federation up on their suggestion and sunset ALL business tax breaks as of Dec. 31, 2009. Then take the resulting $850 million in savings from the first half of 2010 and use it to close the pension gap. And apply the remaining $1.7 billion each year thereafter. Problem solved. - Obamas' Puppy - Monday, Mar 9, 09 @ 3:27 pm: A 1% increase in member contribution for TRS would be roughly $90 million, a drop in the bucket fiscally. I understand that may be what it takes to sell a tax increase vote or prove they are punishing public employees but lets not kid ourselves about the fiscal impact. President Cullerton cut benefits and take credit for the saving now - sound familiar? It is “Filanesque” and how Enron distorted earnings. Taking credit for future fiscal results that may or may not occur is dangerous business and could lead to bankruptcy. - Rick - Monday, Mar 9, 09 @ 3:37 pm: Funny to read the posts that seemt to think that state workers have some type of golden parachute for retirement. What they need to do is thank the state worker who for the last few years have watched the legislaturebalance the state budget with the pension system. That is the real problem. Senator Cullerton and his copatriots have been the main problem with the budget woes. They are focused more on nanny state issues like the seat beat laws and prohibiting smoking than curbing spending and managing the states budget. - VanillaMan - Monday, Mar 9, 09 @ 3:56 pm: “We must reject the idea — well-intentioned, but dead wrong — that the primary path to greatness in the social sectors is to become “more like a business.” Not only is this a straw man argument, since no one is claiming that the “primary path” to greatness is to be “more like business”, but it insults those of us who believe that governments cannot suspend economic reality. To ignor successful economic practices because of their source, (business), is suicide by ideology. Instead of quoting Mr. Collins, let’s try a Nobel Prize winner who is understood by anyone who has ever worked and paid bills with their wages, and never asked their neighbors to bail them out of their poor choices… “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.” - Milton Friedman After a decade of politicians promising something for nothing and spending every dime we have, or will have for the next twenty years, we no longer believe them. Now that each of us face our own economic uncertainty, we are unwilling to pay more for this pile of rubbish called Illinois government. Our current government can’t do the minimum it has promised to provide. Believing it can if we give it more of our wages, is a stupid thing to believe in. Voters are not willing to pay more for the failures that is the current Illinois state government. - Rich Miller - Monday, Mar 9, 09 @ 4:23 pm: Um, VanillaMan, nice quote by Friedman, but, um, have you been paying attention to the banking sector lately? Just sayin, dude. Probably not the greatest time to be worshipping at the feet of all-knowing corporate gods. - Six Degrees of Separation - Monday, Mar 9, 09 @ 4:27 pm: Probably not the greatest time to be worshipping at the feet of all-knowing corporate gods To be fair, they were playing mostly with other people’s money, too. - Leave a light on George - Monday, Mar 9, 09 @ 4:34 pm: Rick you are the man. - Rich Miller - Monday, Mar 9, 09 @ 4:52 pm: Who’s Rick? - Six Degrees of Separation - Monday, Mar 9, 09 @ 5:11 pm: Who’s Rick? The guy who posted at 3:37 PM. - Marianne North - Monday, Mar 9, 09 @ 5:33 pm: The state has been balancing the state budget with state employee pensions since the Thompson admin. The best thing AFSCME did was increase our pension to 50% of pay. Making retirement age 67 for pension benefits means the Rule of 85 will be abolished. I don’t see it happening. I don’t see AFSCME going along with 2 groups of members with different benefits. That was an issue at the last contract. The unfunded pension liability is the fault of weak legislators, not state employees. We always made our payments. - Frank Sobotka - Monday, Mar 9, 09 @ 7:34 pm: “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own.” State workers put 4% of what they make into their pension system. We can debate if this should be more, but what isn’t debatable is the fact that they have an ownership interest in their own money, and that interest trumps whatever claim the ‘taxpayer’ has on it. When people start talking about state employee pensions, the Friedman quote fits perfectly. ‘THEY make too much, I’d like to spend it on something else.’ It’s payment for work. Whether it’s healthcare providers or current and retired employees, the state has an duty to make good on it’s obligations. - Frank Sobotka - Monday, Mar 9, 09 @ 7:39 pm: “Raise the Retirement Age for New Hires. ….the age at which employees become eligible for full benefits should be increased to age 67 for employees with between 8 and 30 years of service, age 65 for employees with between 30 and 35 years of service, and age 62 for employees with 35 or more years of service.” Am I missing something, or do these not agree with the headline? Raising to 67 for employees with 8 to 30 years sure sounds like current employees, but maybe they mean future employees could be hire as late as age 59, do 8 years, and then retire at 67 with full benefits…. - steve schnorf - Monday, Mar 9, 09 @ 9:26 pm: The whole “full benefits” issue is a misnomer. The rule of 85 allows employees to retire without being penalized, not at full benefits. The last time I checked, it took slightly more than 40 years of service to reach “full benefits” and very few state employees accomplish it. - a little knowledge is a.... - Tuesday, Mar 10, 09 @ 12:42 am: Interesting … long term care services …not matched by Medicaid because it violates federal standards…potential to create savings over a relatively short time… Alas, not unmatched because it violates federal standards. Rather, it serves over 50% people with mental illness and thus qualifies as care the feds have always asserted is a state financial responsibility and not their problem. So, feds don’t match care of people between ages 22 and 64. This exclusion is unique in Medicaid - it does not apply to similarly licensed settings for people with developmental disabilities or physical disablities. One might even note this exclusion is discriminatory - at the unfortunate risk of seeming pro-nursing home. It is also why there haven’t been community care nursing home waivers as there are for everybody else. A little research would find that Illinois ended up with this unmatched care precisely by chasing federal bucks in a late 1970’s state budget mess -based on “recommendations” informed at a similar (shallow)level. Oh do let’s repeat rapidly pushing the care of people with MI wherever it’s cheapest at the moment. Move ‘em around and mix ‘em up with the frail elderly. Aren’t we also due another surge in use of homeless shelters about now - there’s another cost-conscious option for the taxpayer. Very civic. - wordslinger - Tuesday, Mar 10, 09 @ 7:40 am: –The saw about who pays the gas taxes and who benefits between Chicagoland/downstate is an old one. By highway mileage, downstate should get 80% of the money. By population, Chicagoland should get 2/3 of the money. The current and longstanding formula of 55% downstate/45% Chicagoland is an attempt to balance the two imbalances. The recent stimulus proposal hit 55/45 fairly close to the mark.– Keep in mind, motorists up north also pay for the tollway system. Sorry, comments for this post are now closed.