Wednesday, November 14, 2012

Civic Committee: "Illinois Pension System is Unfixable"

November 14, 2012

from The Associated Press

SPRINGFIELD, Illinois — a business group says the Illinois pension system is "unfixable" and that even current retirees' benefits will have to be cut to keep it from bankruptcy. The Civic Committee of the Commercial Club of Chicago told members Wednesday in a memo -- shown to The Associated Press in advance -- that keeping the state's five pension systems from collapsing will require drastic action. That includes eliminating annual cost-of-living increases, capping the salaries that pensions are based on and more. Committee president Tyrone Fahner told the AP that current state employees and teachers will never see the benefits promised them. The systems are underfunded by at least $85 billion. The committee hopes to light a fire under a stalemated legislature. Fahner says lawmakers' ideas for reducing benefits are "half measures."

Letter to Members of the Commercial Club from Fahner, et al.

Commentary
Remember this: it is a “rigged system” that exempts the wealthy from their proposed “reforms.” The rising inequalities that continue to exist in Illinois are funded by powerful and wealthy interests’ groups, like “We Mean Business” of the Civic Committee of the Commercial Club of Chicago.

Ty Fahner of the Civic Committee said prior to the elections that he wanted “to build a $1 million pot” by November to elect lawmakers who back pension reform. Well, Representatives Tim Schmitz, Elaine Nekritz, and Darlene Senger are among some of the legislators who have received donations from the Civic Committee’s “We Mean Business” coffers.

There are legislators who proffer unequal opportunities for the citizenry and quantifiable payoffs for the state’s largest corporate executives to ensure patronage for their re-election campaigns. I guess it’s time for payoffs now.

Such is the case in the State of Illinois where the government is held hostage by affluent and influential “special interests” (to protect the riches of the state’s wealthy ruling class); where both the Republican and Democratic parties (the Money Party) are one side of the same dirty coin corrupted by briberies (unlimited campaign funding) made legal; and by the Civic Committee of the Commercial Club of Chicago, in particular, that can and will manipulate the state’s politicians, set the legislative agenda, and hoodwink and oppress an oblivious populace, especially  through media and its obverse website Illinois Is Broke.

What is the relationship between dishonest politics and corrupt partnerships? A substantial amount of campaign money affects the ability and the will of our state legislators to make ethical decisions. It is money and their re-election that motivate legislators to believe that radical “pension reform,” for instance, is a road to navigate for reducing the state’s future budget deficit.

Of course, Illinois policymakers will attempt to break the contracts with their public employees by calling it “pension reform” very soon, and Pulitzer Prize-Winning Reporter David Cay Johnston states why: “It is the rich who are gorging themselves on the government with giveaways, favors, contracts, rules that rig the economy, tax breaks, and secret deals [and not the majority of citizens in Illinois, many of whom are public employees with a hard-earned pension plan]” (Free Lunch, How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You with the Bill).

By the end of January 2013, public employees of Illinois will become victims of well-financed, organizational interest group politics and unreasonable policies unless they unite now and defend their rights and benefits.

What does the Civic Committee want?

Eliminate all cost-of-living increases for retirees or future retirees;
Cap the final salary on which pensions may be based;
Increase retirement age to 67;
Shift the cost of teacher pensions to local school districts over a 12-year period.
 
AFSCME’s Response
Millionaire CEOs want to slash the modest retirement savings earned by middle-class public servants like teachers, police, nurses and caregivers. Regrettably, that’s not news. But it is disappointing that the Civic Committee’s letter to the governor is alarmingly fact-free: No mention that the pension debt was mostly caused by politicians who skipped required payments even as public employees always paid their share. No mention that retirees rely on an average pension of just $32,000 a year, with nearly 80% not eligible for Social Security.
But Illinois residents reject these false attacks. Last week they defeated a change to the Illinois Constitution meant to pin the blame for the pension problem on workers and retirees. And a recent statewide newspaper poll found that voters rightly fault politicians, not workers, by a margin of 51 to 2.
Like all public employees, AFSCME members are helpers and problem solvers by trade, and we remain ready to help solve the pension funding problem. But that’s going to require everyone to work together.
Along with our partners in the We Are One Illinois coalition of unions that represent public employees, we have proposed a pension funding framework that would guarantee politicians pay their share going forward, never repeating the mistakes of the past. It would protect retirees from changes while offering that active employees would make increased contributions to help pay down the debt. And crucially, it would end tax giveaways for big, profitable corporations, helping Illinois to end its practice of using public retirement systems as a credit card to fund vital public services. This last imperative explains the agenda of the CEO crowd: They want to protect their special treatment in the tax code at all costs—even if that means picking the pockets of retired teachers, fire fighters, child protection workers and other public servants.

from Crain's Chicago Business:
State’s pension systems will run out of cash even if lawmakers make big changes
 

 

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