Tom Kacich: Pension mess not Quinn's fault

You can blame Pat Quinn for a lot of things, but stop blaming him for Illinois' pension funding mess, and for the state's recent credit downgrade.

Ignoring years of history, Republicans, columnists, editorial writers and Illinois citizens have condemned the accidental governor (he became the chief executive in January 2009 after his corrupt predecessor, Rod Blagojevich, was impeached) for the state's dreadful pension debt and the recent bond rating downgrade by Standard & Poor's.

"It's really important to remember that we have had 20 downgrades in the entire history of the state and 11 of them have been under Pat Quinn," said Senate Minority leader Christine Radogno. Her statement has been repeated by various interest groups and writers, as if in just four years Quinn created the fiscal train wreck that has been building for more than 50 years.

It likely will be among the talking points of the candidates, Democratic and Republican, who want Quinn's job.

"He's had more downratings than all other governors combined since we've been rated," said Sen. Bill Brady, R-Bloomington, who ran against Quinn in 2010 and wants to again in 2014.

Just to be clear, though, here's the reason Standard & Poor's downgraded Illinois' credit: "The downgrade reflects what we view as the state's weakened pension funded ratios and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions," said Standard & Poor's credit analyst Robin Prunty.

It's all about pensions.

And that makes even more interesting the pension-related comments last week of House Minority Leader Tom Cross of Oswego. Cross made his remarks after Quinn's State of the State address, as he sat at a table not two feet from Radogno.

"The funny thing about it is that, because as the CEO he does wear the collar on a lot of those things, but he didn't cause the mess," Cross said of the pension mess. "Here's a guy that comes in and takes the job ... the last 12 years we've had this place run by (Senate) President (John) Cullerton and (House) Speaker (Michael) Madigan. I think from a policy standpoint they've done some awful things, from spending and borrowing and not making the pension payments, etcetera.

"And past General Assemblies have had some exposure on pension liabilities, so it would be ironic that perhaps he suffers in a gubernatorial race because he didn't solve a problem that he didn't create but that the folks on this side of the aisle are wearing a lot of the blame."

Exactly. Well, kind of exactly.

In recent years it's the Democrats who deservedly get the blame for shortchanging the pension systems. In 2005, for example, they provided all the votes for the notorious "pension holiday," a move by Blagojevich, Madigan, then-Senate President Emil Jones and their minions, including state Rep. Naomi Jakobsson of Urbana, to skip $2.3 billion in pension payments so that the operations budget wouldn't have to be cut. The move also added significantly to the state's long-term pension debt.

Between 1996 and 2011, according to an analysis by the Civic Committee of the Commercial Club of Chicago, inadequate funding by mostly Democratic governors and legislators was responsible for 44 percent of the growth in the unfunded pension liability.

But decades earlier the Republicans ran the Legislature and they were the ones who routinely underfunded the pensions so more money would go into general operations.

"As an employer, the state of Illinois should maintain with its employees its matching-fund agreements for pension purposes. Regrettably this has not been the history of our state pension programs," GOP legislators acknowledged in their platform in 1967.

"The state has been derelict and has not even come close to matching the amount of money put into the pension funds by state employees. State pension plans are less than 25 percent funded. Any sudden rash of claims could cause untold hardship among employees and their families. The state of Illinois simply has not kept good faith with them."

The Legislature's Republicans, who controlled the Senate from 1941 to 1971 and the House for 22 of those 30 years, wrote that in a document titled "Building A Better Illinois: A Republican Legislative Program."

While Quinn can't "wear the collar," as Cross put it, for the pension mess, it's his responsibility to try to fix it. There again, he is stymied by legislators who either can't focus on a single solution or don't want to.

"He's endorsed just about every pension bill that's been out there. He's been pretty outspoken on the need to do pension reform," Cross said of Quinn.

The Republican leader put the onus squarely on Madigan, who has remained largely silent on a pension solution except to say that he thinks it should include shifting some costs to colleges, universities and local school districts.

"My guess is everybody in that room today (at the State of the State address) sat there and said, 'OK, I'm glad you're talking about pensions. We know we have to do pensions.' I wanted him to turn around and say, 'Speaker,' and ask the Speaker, 'What are you going to do about pension reform, and what's your plan?' The bottom line is (Quinn) can talk about pensions, we can talk about pensions, (Cullerton) can talk about pensions, but until the Speaker tells us what he wants to do about pensions, we don't know. Therein lies the problem."

Campaign (non)disclosure

Urbana Mayor Laurel Prussing recently re-formed her political campaign (on Jan. 30) and, using Illinois' lousy campaign disclosure laws, successfully avoided disclosing the most important information about her campaign: where the money comes from.

Because full disclosure reports have to be filed only every quarter, Prussing will get through the city's Feb. 26 Democratic primary election and the April 9 general election without having to report who has given money to her re-election campaign, unless she gets contributions of $1,000 or more.

Her Jan. 30 report says only that she has $3,000 on hand, but doesn't say where it came from. Her Democratic opponent, Les Stratton, disclosed a $500 contribution from the local electrical workers' union, as well as a $500 contribution from himself and a $1,000 loan from himself.

A similar situation arose in Champaign's 2011 mayoral election when neither incumbent Jerry Schweighart nor challenger Don Gerard had to disclose campaign donations (except for those of $1,000 or more) until after the election.

It makes you wonder about the value of campaign disclosure in Illinois when the relevant information only comes out after the election.

Tom Kacich is a News-Gazette editor and columnist. His column appears on Sundays and Wednesdays. He can be reached at 351-5221 or at kacich@news-gazette.com.

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kc072157 wrote on February 10, 2013 at 8:02 am

And this is why, as an independent I can not support any political party. The oath of honesty and truth is never upheld. When one takes an oath of office they usually have their hand on the Bible, personally I think it should be on the constitution whether it be state or federal, but that’s another issue. The issue is this, whether in office or campaigning the truth takes a back seat!! When one takes the oath of office no matter which office, they vow to be honest and truthful and to do the work of the office to the best of their abilities. If honesty and truth are not in their abilities why are we putting them in!! For if the do not speak the truth before getting in office they certainly will not when in. So when we see a Poll run for office or take an oath of office in which they were voted in, check and see if we see one hand on a symbol of honesty and truth and the other hand behind their back with fingers crossed this may be their real abilities.          

Sid Saltfork wrote on February 10, 2013 at 10:02 am

Read today's edition of Springfield's State Journal Register newspaper.  It gives a complete history of the lack of employer contributions to the pension systems from Gov. Stratton's tenure until now.  It shows why the pensions are under funded.  The overwhelming reason was the employer, the State of Illinois, not paying the employer's portion of the annual payment.  The employees paid with every paycheck.  The problem was not caused by one party, or the other.  It was caused by both parties.  It was not caused by the employees, and retirees.  The recent credit rating agencies reports such as Moody's does not call for the theft of the employees, and retirees pensions.  They call for the payment by the state to the pensions systems.  They understand the State of Illinois Constitution, and contract law.  They realize that states cannot go bankrupt.  They know that the state's bondholders are legally behind the employees, and vendors in payment of debts.  It is time to drop this charade of "pension reform".  If Illinois is serious about "pension reform", it should do what the State of Pennsylvania did recently.  Honor the debt owed.  Make changes on current employees from a date forward while honoring the pension debt owed to them up to that date.  Have employees on a 401k plan from that date forward.  Honor the obligations made to retirees.  Illinois cannot weasel it's way out of this.

cretis16 wrote on February 10, 2013 at 12:02 pm

This is why State Employess..."buy" years of service and retire at 55 with full everything.And  you wonder why we are broke? The answer is not to tax those of us unable to leave this bankrupt state into oblivion so employees can retire early. We just got pounded with a 67% tax increase...but thank jesus it was only temporary.

Sid Saltfork wrote on February 10, 2013 at 2:02 pm

cretis;  State employees such as veterans can "buy" years of service.  If an employee did not pay into the pension system their first year which is the only year that they cannot; they can "buy" that one year.  For a state employee to retire at age 55, the most years they would have is 37 if they started when they were 18 years old.  The age 55 is the minimum age for state retirement for employees.  The pension on 37 years would be 61.79% of their highest four year average of pay.  If they are under the State Employees  Pension System (SERS); they would get the approximate 62% pay, and wait 7 years to get Early Social Security Retirment since they are required to pay into Social Security plus the state pension system.  If they are a state university employee; they are under the State University Retirement System (SURS).  They are not allowed to pay into Social Security.  The retirement pay would be 80% of their highest four year average pay.  For someone earning $45,000 a year for the past four years; they could have a pension of $36,000 a year before taxes after 37 years of work.  Very, very few state employees whether state, or university retire at age 55.  The new employees are required to work until age 67 before they can retire.  The employees, and retirees paid into their pension systems; their employer, the State of Illinois, did not.  The state spent the money owed to the pension systems on the citizens which includes it's employees.  The employees pay taxes just like you.  The debt owed to them will be paid.

By the way, the recent tax increase is not "temporary".  The state will spend it on pork barrel projects for votes, and campaign donations instead of paying the debts owed.  Get over it.  The problem is not the state employees.  It is the politicians of both parties which you, and I voted into office.  If you want to change things, push for term limits.

Now, go back to the end of the line. 

Tom Kacich wrote on February 11, 2013 at 11:02 am
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As passed, the January 2011 income tax increase is temporary. It is supposed to revert to a lower rate  in January 2015 and drop to its original rate 10 years later ...

http://www.civicfed.org/iifs/blog/governor%E2%80%99s-projection-shows-im...

 

rsp wrote on February 10, 2013 at 12:02 pm

Everyone runs on what good leaders they will be, but as soon as they are elected nobody is capable of it. You keep hearing statements form them about they are waiting for a budget or waiting for something else. They spend all their time waiting and we pay them for it. Then we give them "overtime" so they can go back and wait around some more. But if it's something that benefits them or their friends they can get that done.