Saturday, November 30, 2013

If the state faces a crisis, it could simply vote to change what the required payment would be... –Representative Elaine Nekritz













 “…Nekritz said …the so-called pension payment guarantee has wiggle room. If the state fails to make a pension payment, a retirement system could file action in the Illinois Supreme Court to compel the state to make the required payment. But if the state faces a crisis, it could simply vote to change what the required payment would be, she noted, effectively working around that guarantee.

“Nekritz noted that flexibility does cause her some concern, despite her support of the [pension reform] deal. “I can argue both sides of it because what we end up doing . . . is sort of digging ourselves back into the hole we’re in now by failing to make an actuarially adequate payment,” she said. “On the other hand, what you end up doing [otherwise] is having to say, ‘Well I’m going to have to cut $2 billion . . . pick your favorite program,’ and that’s not a good policy outcome either. There’s really no perfect way to do this that provides flexibility for funding other current services and make sure that the pension payment is fully funded. There’s just no way to do that.”

from Pension deal faces pushback from unions; backers pursue votes by Francine Knowles


Commentary (redux):

Some members of the 98th Illinois General Assembly will guarantee what is in their best interests and nothing else. Legislators, like Nekritz, can never be trusted. “There isn’t a law that we can’t change,” Nekritz once told John Dillon and me.

"There’s really no perfect way to do this that provides flexibility for funding other current services and make sure that the pension payment is fully funded. There’s just no way to do that”:

Instead of so-called “pension reform” or breaking a constitutional contract with public employees, here are just a few legal and moral solutions that legislators like Nekritz have chosen to ignore:

·         To address the pension debt problem (unfunded liability) caused by policymakers' theft and irresponsibility, there needs to be a required annual payment from the state to the pension systems. The debt needs to be amortized for a longer frame of time (a flat payment) just like a home loan that is amortized; though the initial payment will be more in the beginning, over the long term it will become a reduced cost and a smaller percentage of the overall Illinois budget as it is paid off throughout the years.
·         According to the National Association of State Retirement Administrators, policymakers must “keep in mind that state and local pensions accumulate and pay out assets over decades. They have an extended investment horizon.”  Therefore, the focus should be on structural tax reform and not so-called “pension reform,” where public employees are victimized again and the state’s debt is not resolved.
·         There needs to be a modernization of state and local budgets and their revenue systems. “The structural problems that have built up over time in these systems need to be addressed” (The Center on Budget and Policy Priorities).
·         “At the core of the budget crisis facing [Illinois] is [its] regressive state tax structure… that is, low-and-middle-income families pay a greater share of their income in taxes than the wealthy…  [A regressive or flat tax] disproportionately impacts low-income people because, unlike the wealthy, [low-income people] are forced to spend a majority of their income purchasing basic needs that are subject to sales taxes” (United for a Fair Economy).
·         “Since the rich are able to save a much larger share of their incomes than middle-income families – and since the poor [can] rarely save at all – the taxes are inherently regressive” (The Institute on Taxation and Economic Policy, ITEP). Illinois income tax uses a single-rate structure that results in low-income wage earners paying more taxes than the wealthy. Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent (ITEP).
·         To address the revenue problem that policymakers choose to ignore: with a constitutional amendment, “given an appropriately designed graduated-rate structure, Illinois could cut the overall state income tax burden for 94 percent of all taxpayers—on average providing a tax cut to every taxpayer with less than $150,000 in base income annually, raise at least $2.4 billion more in revenue, and keep the effective individual income tax rate for millionaires well below five percent…  Illinois taxpayers with the bottom 94 percent of base income collectively would receive an annual tax cut of $1.06 billion… [T]he combined effect of this policy would be a stimulus to the economy from tax cuts and additional state spending (assuming that the additional revenue is used to fund current public services that would otherwise not be funded) that would create at least 36,000 private sector jobs in communities across Illinois…” (Center for Tax and Budget Accountability)…


Let's not forget how the economic catastrophe in Illinois was created. The state's unfunded liability has increased to approximately $100 billion. Nearly 50 percent of that figure was machinated by Illinois legislators. Today's fiscal predicament is not the result of a financial problem that was unforeseen at the time of the 1970 Illinois Constitutional Convention. The unfunded liability is a consequence of continual legislative negligence, dishonesty and ineptitude.

Since 1953, Illinois policymakers have consistently failed to make the annual required contributions to the state's pension systems, primarily because they could pay for services and their "pet projects" without raising taxes; in 1995, policymakers created a flawed re-funding schedule, and they have refused to correctly amortize the pension systems' unfunded liabilities since then. Instead they have favored corporate interests rather than the interests of their citizenry and; thus, they have seriously sabotaged the public employees' retirement plans and the State of Illinois' future economic solvency through mismanagement and fiscal irresponsibility. Past state policymakers left us with a fiscal disaster.

Instead of protecting public pension rights and benefits, which have a legal basis under Illinois State Law; instead of restructuring the state's revenue base to pay for the state's growth in expenditures and its recklessly-accumulated debts and obligations, current policymakers have chosen to diminish the public employees' constitutional rights and their benefits, even though revenue restructuring and pension debt re-amortization are the best legal and moral solutions.

Let’s not also forget “The Pension Code sufficiently manifests intent to make pension payments the obligations of the State when due… [T]he Illinois Pension Code Article of each of the five state-funded pension systems contains a provision with sufficient language binding the State to pay pensions even if a system defaults. Each provision states in pertinent part that ‘[t]he payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified in this Article…’

“[Furthermore,] the inclusion of the phrase ‘benefits of which shall not be diminished or impaired’ manifests… clear evidence of the framers’ intent to limit the General Assembly’s power to modify pension benefit rights even in the face of a fiscal crisis. This conclusion is supported by the common dictionary definitions of the terms ‘benefits,’ ‘diminish,’ and ‘impair.’ After all, the Clause’s prohibitory language contains no exceptions and is fashioned in absolute terms…” (Madiar (2011), Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution).

The promise to honor commitments and pay for the public employees’ pension is of “sufficient importance” to all citizens of Illinois. To pass pension reform is “an unequivocal manifestation of intention not to perform… legal duties…under a contract… When there is a duty of immediate performance of a promise, failure to perform in full is a breach…” (Professor of Law, Emeritus, Claude D. Rohwer and Professor of Law, Emeritus, Anthony M. Skrocki, Contracts in a Nutshell).

Friday, November 29, 2013

Proposed Pension Reform Bill Next Week (from Today’s Capitol Fax by Rich Miller)


…Employees will contribute 1% less toward their pension.

…Future COLAs will be based on a retiree's years of service and the CPI. The annual increase is equal to 3% of years of service multiplied by $1,000 ($800 for those coordinated with social security). The $1000/$800 will be adjusted each year by the CPI for everyone (retirees and current employees). Those with an annuity that is less than their years of service times $1000/$800 (or whatever the amount is at the time of retirement) will receive a COLA equal to 3% compounded each year until their annuity reaches that amount.

…Current employees will miss annual adjustments depending on age: employees 50 or over miss 1 adjustment (year 2); 49-47 miss 3 adjustments (years 2, 4, and 6); 46-44 miss 4 adjustments (years 2, 4, 6, and 8); 43 and under miss 5 adjustments (years 2, 4, 6, 8, 10).

Pensionable salary cap: Applies the Tier II salary cap ($109,971 for 2013), which is annually adjusted by the lesser of 3% or ? of the annual CPI-U. Salaries that currently exceed the cap or that will exceed the cap based on raises in a collective bargaining agreement would be grandfathered in.

…For those 45 years of age or under, the retirement age will be increased on a graduated scale. For each year a member is under 46, the retirement age will be increased by 4 months (up to 5 years)…
  
…Up to 5% of Tier 1 active members have the option of joining a defined contribution plan. If a member chooses to opt into the defined contribution plan, benefits previously accrued in the defined benefit plan will be frozen.

…All pension matters, except pension pickups, are removed from collective bargaining.

…Prohibits the State pension systems from using pension funds to pay healthcare costs.


For entire article:  Capitol Fax by Rich Miller 


Thursday, November 28, 2013

Pope Francis Understands Economics Better than Most Politicians by Heidi Moore, Guardian UK



“…Pope Francis is a pontiff who has constructively broken all the rules of popery - so far to widespread acclaim. He's faulted the Catholic Church for its negative obsession with gays and birth control, and now he has expanded his mandate to economics with a groundbreaking screed denouncing ‘the new idolatry of money.’


“As the Pope wrote in his ‘apostolic exhortation’:


“‘The worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings…’


‘“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality…’


“‘Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting…’


“Pope Francis, in his simple black shoes and unassuming car and house, is the first pontiff in a long time to reject flashy shows of power and live by the principle of simplicity. That makes him uniquely qualified to make the Vatican an outpost of Occupy Wall Street. His message about spiritual salvation applies mainly to Catholics, but it would be sensible for economists and lawmakers to recognize his core message about the importance of income inequality applies to those even those who have no belief in religion.


“Capitalism has always seen itself as an amoral pursuit, where the guiding stars were not ‘good’ or ‘bad,’ but only ‘profit’ and ‘loss.’ It's going to be harder to sustain that belief over the next few years.”



for the complete article, Pope Francis Understands Economics Better than Most Politicians, click here.



Wednesday, November 27, 2013

Four Legislative Leaders Strike Deal on Pension Reform



by Stefano Esposito and Kate Grossman, Chicago Sun-Times

The four legislative leaders have struck a tentative deal on solving Illinois’ $100 billion pension crisis, the top Republicans in the House and Senate confirmed Wednesday.

“We have a deal,” House Minority Leader Jim Durkin, R-Western Springs, told reporters at the Bilandic Building, where leaders met Wednesday morning.

No details were offered by either him or Senate Minority Leader Christine Radogno, R-Lemont, but Durkin said a vote is expected next week.

“That’s our hope,” he said.

*****


According to the Chicago Sun Times and Capitol Fax, the four legislative leaders have struck a tentative deal on “Pension Reform”:

Three elements are
·         Change to the COLA
·         Defined Contribution Plan
·         Adjustment to the Retirement Age

Vote is expected next week as both House and Senate will be in session on December 3, 2013.

*****

"House Speaker Michael Madigan's staff is putting together an 'explanatory memo' for lawmakers and will send details of the proposed legislation to them Friday, said Madigan spokesman Steve Brown. The Illinois House and Senate will consider the measure in a special session, which has been set for Dec. 3."

*****



This is the address for sending donations to the Legal Defense Fund:

Illinois Retired Teachers Association
620 N. Walnut St.
Springfield, IL 62702

Please make your check payable to IRTA and write "Legal Defense Fund" on the check memo line.

Or

Go to the IRTA website and Click on Donate online at

http://www.irtaonline.org/Events.aspx#legal defense
Thank you.

[You do not have to be retired or a member of IRTA to donate; however, one day you will be retired]!
 


We Are One Illinois coalition is participating in a series of events statewide on December 2nd, which has been designated Pension Emergency Day


 
Purpose:  Lawmakers are expected to convene the first week in December to act on a bipartisan proposal to slash pension benefits.  It is critical that we maximize pressure on legislators, especially those who voted for SB 1 but may be concerned about backlash from our members. To do so in Springfield is logistically difficult, but targeted actions at district offices offer an opportunity to convey such outrage, even with a limited timeframe.

Plan:  The We Are One unions will coordinate a series of such actions as part of a “Pension Emergency Day” on Monday, December 2.  We will mobilize groupings of 10-50 folks from our ranks to descend on targeted legislative offices, noisily entering the office deliver a “Pension Emergency Declaration” to the lawmakers and urge the legislator to join the “Pension Rescue Squad” and vote against the pension bill. Participants would have a whistle/noisemaker, an oversized “Declaration” to present, and a sticker designating they’re on the “Pension Rescue Squad.”

The action is not meant to be an attack on the legislator. Rather, with urgency and intensity, public employees and retirees will be urging targeted legislators to help save their pensions and be on their side.

List of events, categorized by “Lead Union”:

AFSCME
·         Rockford – Stadelman/Syverson, Jefferson
o   Start Time: 10 a.m.
o   Transportation: Self. (Parking is plentiful.)
o   Meeting Location: All three offices are located in third-floor suites at 200 S. Wyman, Rockford, IL.
o   Note: The lead local has set a meeting time in a conference room with Sens. Stadelman and Syverson and plans to fill it to overflow capacity with 50+ retirees. The event for Rep. Jefferson would follow.
o   Contact: Jay Ferraro, 815-742-6553
·         Chicago (traveling squad) – M. Davis, Dunkin, Evans, C. Mitchell, Turner, Berrios
o   Start Time: 9 a.m.
o   Transportation: Bus
o   Bus Pickup Location: Jewel-Osco parking lot, near the junction of W. 87th St. and the Dan Ryan on the south side of Chicago
o   Food: Lunch will be provided on the bus.
o   Contact: Mary Jones, 773-426-4367
·         Chicago - North Suburbs, morning wave (traveling squad) – Gabel, Biss, Nekritz/Moylan
o   Start Time: 9:30 a.m.
o   Transportation: Bus
o   Bus Pickup Location: Evanston Plaza parking lot, 1968 Dempster St., Evanston, IL
o   Order of Visits: Gabel, Biss, Nekritz/Moylan (Nekritz/Moylan share space)
o   Pledged Turnout Support: IFT
o   Contact: Charlie Hogan, 773-679-6835
·         Chicago - South Suburbs, morning wave (traveling squad) – T. Jones, Riley
o   Start Time: 9 a.m.
o   Transportation: Bus
o   Bus Pickup Location: K-Mart parking lot at 17550 Halsted St., Homewood, IL (Note: The K-Mart itself is closed, but the parking lot stages bus pickups.)
o   Contact: Mike Bouler, 708-856-5220
·         Chicago - West Suburbs, morning wave (traveling squad) – Willis, Landek, Harmon, Radogno, Durkin
o   Start Time: 10 a.m.
o   Transportation: Bus
o   Bus Pickup Location: Melrose Crossing shopping center parking lot at 1903 N. Mannheim Rd., Melrose Park, IL
o   Contact: Al Drantz, 708-453-4641
·         Aurora (Kane County) – Kifowit
o   Start Time: 10 a.m.
o   Transportation: Self. (Parking is ample.)
o   Meeting Location: Rep. Kifowit’s district office at 1677 Montgomery Rd., Ste. 116, Aurora, IL
o   Pledged Turnout Support: IEA
o   Contact: Marcia Little, 630-365-0569
·         Metro East – Kay
o   Note: There was a fire very recently at Rep. Kay’s office, and it is unclear if this event will take place or whether he has even made temporary district office arrangements yet. If there is no office, the event may be cancelled.
o   Contact: Dorothy Asbury, 618-401-0498
·         Southern Illinois (Marion) – Bradley
o   Start Time: 10 a.m.
o   Transportation: Self. (Parking is limited, so members/retirees should carpool if possible.)
o   Meeting Location: Rep. Bradley’s district office at 510 W. DeYoung St., Ste. 5, Marion, IL
o   Pledged Turnout Support: IEA
o   Contact: Al Latoza, 618-303-3542

IFT
·         Lake County/Hainesville – Yingling
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Yingling’s district office at 20 W. North St., Hainesville, IL
o   Contact: Matt Beverly, 815-271-2530 (mbeverly@ift-aft.org) and Michelle Standridge, 262-308-9340 (mstandridge@ift-aft.org)
·         Will County/Joliet – Manley
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Manley’s district office at 2701 Black Rd., Suite 201, Joliet, IL
o   Pledged Turnout Support: AFSCME
o   Contact: Dan Mercer, 815-878-9130, dmercer@ift-aft.org
·         Will County/Romeoville - McAsey
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. McAsey’s district office at 209 W. Romeo Rd., Romeoville, IL
o   Pledged Turnout Support: AFSCME
o   Contact: Dan Mercer, 815-878-9130, dmercer@ift-aft.org
·         Grundy County/Morris – Rezin
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Sen. Rezin’s district office at 103 Fifth St., Peru, IL
o   Pledged Turnout Support: AFSCME
o   Contact: Todd Stachowiak, 815-228-1331, tstachowiak@ift-aft.org
·         Peoria – Gordon-Booth
o   Start Time: TBD
o   Transportation: Self.
o   Meeting Location: Rep. Gordon-Booth’s district office at 300 E. War Memorial Dr., Suite 303, Peoria, IL
o   Contact:
·         Peoria – LaHood
o   Start Time: TBD
o   Transportation: Self.
o   Meeting Location: Sen. LaHood’s district office at 5415 N. University, Suite 105, Peoria, IL
o   Contact:
·         Quincy – Tracy
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Tracy’s district office at 3701 East Lake Centre Dr., Suite 3, Quincy, IL
o   Contact: Michelle Eberlin, 217-440-2435, meberlin@ift-aft.org

IFT – second waves in Rockford and around Chicago to try to accommodate actives
·         Rockford, second wave – Stadelman, Syverson, Jefferson
o   Start Time: TBD
o   Transportation: Self. (Parking is plentiful.)
o   Meeting Location: All three offices are located in third-floor suites at 200 S. Wyman, Rockford, IL.
o   Contact: Chris Weaver, cweaver@ift-aft.org
·         Evanston/Chicago North Suburbs, second wave – Gabel
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Gabel’s district office at 820 Davis St., Suite 103, Evanston, IL
o   Contact: Pankaj Sharma, 847-530-9425, pmsharma25@gmail.com
·         Glenview/Chicago North Suburbs, second wave – Fine
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Fine’s district office at 1812 Waukegan Rd., Suite A, Glenview, IL
o   Contact: Lenny Nieves, 224-622-5409, lnieves@ift-aft.org and Bob Shaevel, 847-997-4352, bshaevel@ift-aft.org
·         Chicago North Suburbs, second wave – Silverstein
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Sen. Silverstein’s district office at 2951 W. Devon, Chicago, IL
o   Contact: Deb Takehara, dtakehara@ift-aft.org
·         Skokie/Chicago North Suburbs, second wave – Biss
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Sen. Biss’s district office at 3706 N. Dempster St., Skokie, IL
o   Contact: Steve Grossman, 773-991-0793, stevegrossman@nstu.org
·         Northlake/Chicago West Suburbs, second wave – Willis
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Willis’ district office at 112 N. Wolf Rd., Northlake, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org
·         Burbank/Chicago West Suburbs, second wave – Landek
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Sen. Landek’s district office at 6215 W. 79th St., Suite 1A, Burbank, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org
·         Villa Park/Chicago West Suburbs, second wave – Conroy
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Conroy’s district office at 28 S. Villa Ave., Villa Park, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org
·         Burr Ridge/Chicago West Suburbs, second wave – Durkin
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Durkin’s district office at 16W281 83rd St., Suite C, Burr Ridge, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org
·         Lemont/Chicago West Suburbs, second wave – Radogno
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: 1011 State St., Suite 210, Lemont, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org
·         Oak Park/Chicago West Suburbs, second wave – Harmon
o   Start Time: 4 p.m.
o   Transportation: Self.
o   Meeting Location: 6933 W. North Ave., Oak Park, IL
o   Contact: Tom Smith, 708-204-3243, tsmith@ift-aft.org and Arnavez Mistry-Mujthaba, amistry@ift-aft.org

IEA
·         Streamwood -- Crespo
o   Start Time: 3:30 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Crespo’s district office at 1014 E. Schaumburg Rd., Streamwood, IL
o   Contact: Connie Campbell, cell 847-754-5377
·         Schaumburg -- Mussman
o   Start Time: 3 p.m.
o   Transportation: Self.
o   Meeting Location: Rep. Mussman’s district office at 15 W. Weathersfield Way, Schaumburg, IL
o   Contact: Connie Campbell, cell 847-754-5377
·         Bloomington -- Brady
o   Start Time: 3:45 p.m.
o   Transportation: Self.
o   Meeting Location: Sen. Brady’s district office at 2203 Eastland Dr., Suite 3, Bloomington, IL
o   Contact: Ben Matthews, Ben.Matthews@ieanea.org