Rauner: Revise benefits for workers, not retirees

Rauner: Revise benefits for workers, not retirees

URBANA — Gov. Bruce Rauner said he agreed with Friday's ruling by the Illinois Supreme Court that a 2013 law aimed at cutting pension costs was unfair and unconstitutional.

"I don't think we should ever reduce a retiree's benefit after they're retired, under any circumstance. A deal's a deal. When somebody's retired they should have their benefits, no reductions," Rauner said after speaking at an awards dinner for the Illinois Innovation Celebration for high school students in Urbana.

But Rauner said he didn't appreciate several suggestions for pensions fixes that the Supreme Court included in its 38-page decision. The unanimous decision included suggestions by the court that the state raise new revenue or enact a new schedule for repaying pension debt.

"I'm not sure it makes sense for the judiciary to comment on government policy. I think it's their role to interpret the law, the existing law," Rauner said. "It sounds like they made the decision which I agree with that the bill that was passed was unconstitutional. I believe it was because when I read the constitution and also understanding a bit about contract law in America, you don't unilaterally change a contract after the fact for a benefit that was earned."

But Rauner said "there's no reason a new contract can't have different compensation in the future."

He wants lawmakers to approve legislation that protects earned benefits for retirees and enrollees in the state's five pension systems, but revise them for existing employees and future employees immediately.

"But for future work starting tomorrow, or whenever we pass a bill, for current employees and new employees, we can have a different pension just like we may have different pay scales, different incentives, different bonuses, different compensation levels," he said. "We should be able to change the future, never the past, never changing what was earned from prior work. That's what has happened in the business world for many, many years to deal with pension problems, and I'm recommending that for the government."

He said he wants to enshrine the proposal as an amendment to Illinois' Constitution.

Rauner dismissed this week's Illinois House debate on workers' compensation reforms that he has pushed, and on a version of his spending cuts for the budget year beginning July 1. Both were viewed as messages from House Speaker Michael Madigan and House Democrats that they're going to drive a hard bargain with the freshman governor.

"Government negotiations often involve a certain amount of political theater," Rauner said. "That's fine. It's not very relevant. It's all part of the process. It's fine. No big issue."

In fact, he said that while he hasn't spoken to Madigan "in a number of days," top officials in his administration met with senior staff of the four legislative leaders for four hours on Thursday.

"They're working through what our (legislative and administration) working groups have done this week," he said. "I'm cautiously optimistic things are going well. We're getting some progress."

He said he wasn't disheartened by the setbacks of the last week.

"That's why I wanted the job. I knew it was going to be hard. That's what we've got to do, we've got to take this stuff on," Rauner said.

In his speech to the high school innovation award winners, the governor said he wants "Illinois to be all about innovation, all about new ideas and new thinking and helping entrepreneurs succeed. As governor I want to create an environment where you can thrive."

He also again called the University of Illinois "one of the greatest universities in the world. I want to give it the resources to help expand it, especially in innovations and technology that grows new businesses here in Champaign-Urbana and around the state."

Referring to his proposed 31 percent cut to the UI's state appropriation next year, Rauner said, "We're going through a little rough period right now. A lot of the U of I is cranky at me because I've got to cut some costs for a little while, but we're going to fix that and get it right and then we're going to expand significantly."

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bluesky wrote on May 09, 2015 at 8:05 am

The Governor wants to give the UI resources.  He wants to cut the University's state appropriation by 31 per cent.  He's talking out of both sides of his mouth, when he's not being vauge, or simply patronizing.  "Cut some costs for a little while."  Please explain.  And "cranky"?  Really?  He is an out-of-touch, front office guy who seems to have no idea that there are big consequences to his spread sheet decisions.

vcponsardin wrote on May 09, 2015 at 11:05 am

So Mr. Billionaire Rauner seems to think it's entirely fair to completely revise the proposed retirement rules for a long-time state worker who's, say, 60 years old and about to retire?  Really?  This worker was hired many years ago with the promise of a certain level of retirement paid for by monthiy contributions that came directly out of his/her salary--money that was deducted by law to be invested in a long-term retirement plan--and now Rauner thinks it's okay to just trash that retirement plan and create a retirement that will be far less?  He's nuts.  A deal is a deal.  A contract is a contract, even for current employees.  If the state promised a certain retirement plan to an employee 30 years ago, the state needs to honor that promise.  Sure, Rauner and his business-minded cohorts can change the retirement rules for new hires, people who are just starting out and who have entire lifetimes to save additional money in other retirement vehicles.  But for a current employee who's just a few years away from retirement and expecting a certain retirement plan to be intact when he/she retires--to suddenly and arbutrarily change that plan to a much lower plan is criminal. How is a 60 year-old employee supposed to plan ahead for a new retirement under those circumstances?  What happened to all the money they contributed into a system with a promised result for all those years?  That's the employee's money, not the state's.  How is a state employee who is not able to draw from Social Security (remember, state employees aren't eligible for Social Security) supposed to live in retirement now?  In dire poverty?  Just because Billionaire Rauner decided that he doesn't want to raise taxes on the wealthy a few percentage points? And when Rauner says that "earned benefits are safe" what he means is, all current employees will get a cash lump sum of all the money they've put into the pension system over the years that they can then "invest" for themselves--yielding a significantly lower retirement income.  Cashing out from a state pension results in only a few hundred thousands dollars at best for a long-term employee--not enough to live on for 10, 20 more years in retirement.  Don't be fooled by billionaire Rauner's nonsense.  His plan is for current state employees to suffer.

787 wrote on May 09, 2015 at 11:05 am

What part of "We should be able to change the future, never the past, never changing what was earned from prior work"  do you not want to understand?

vcponsardin wrote on May 09, 2015 at 1:05 pm

The part where he said:

"He wants lawmakers to approve legislation that protects earned benefits for retirees and enrollees in the state's five pension systems, but revise them for existing employees and future employees immediately. 'But for future work starting tomorrow, or whenever we pass a bill, for current employees and new employees, we can have a different pension just like we may have different pay scales, different incentives, different bonuses, different compensation levels,' he said."

Revising them for existing employees means changing future benefits, changing a contract that was promised to the current employees years ago when they were first hired.  That's where Rauner goes off the tracks.  Got it?  Regardless, whether you get it or not, whether plutocrat Rauner gets it or not, a constitutional amendment ain't gonna happen.  But if it does, for some incredible reason, there'll be a mass retirement, the size of which this state has never seen before, leaving the state completely paralyzed and devastated.

Illiniwek11 wrote on May 09, 2015 at 9:05 pm

BWHAHAHAHA.......mass reitirement?!? The state is going to be "completely paralyszed and devastated" as it is anyway when 90 cents of every dollar is going to be paying retirees in 5 years.  So you're telling me that if the state moves to a 401k program for all state employees that they will just quit en mass?  What a load of BS.  Where else are they going to find a job that lets their incompentent, lazy arses collect a paycheck just for breathing?

I just want you and all other of your ilk on record for when cuts to the truly needy programs (i.e. mentally handicapped, etc) happen that you are now the greedy 1% of this state that say "ME FIRST....SCREW THE REST!!".  Because make no bones about it - the retirees of this state will become that 1% that you all desipse and rail against after the people with means move out of IL.  This isn't the 90s anymore - jobs are easily relocatable to other states that aren't held hostage by public employee unions.  Talk to Maryland about how that millionaires tax is going.

And spare us the "we paid our share every year...its the politicians that didn't pay!!" excuse.  Those are the same politicians that your public employee unions gave MILLIONS to in campaign contributions every year and you didn't say boo about it when they skipped the payments.  And I'm guessing the unions will continue to hand over millions to them even to this day.  Why isn't your anger and outrage directed that those same Democrats that you now cry screwed you over?

Sid Saltfork wrote on May 11, 2015 at 3:05 pm

We would rather direct our anger and outrage toward the anti-public employee howlers.  People like you, and the other wantabee thieves.  The cheap, and fatherless howlers who don't want to pay for services received.  You would rather steal others EARNED money to pay for your responsibilities.  If you, and the other C.B.'s don't want to pay, move.  Public employees pay taxes also.  Talk about something you know rather than what you do not; or you can sit back on your "incompentent, lazy arse" and make more absurd comments. 

chief21 wrote on May 09, 2015 at 2:05 pm

This is the reaction you get when a successfull businessman attempts to make Illinois solvent again, as opposed to the parade of career politicians marching in lock step, tossing dollars after dollars into an endless pit. This state has a chance with Rauner...not with politicos who's only motivation is to win the next election. This state does not have the money to continue paying these excessive retirement benefits to state employees, unless we stop funding all schools, roads and programs all together. Over 50 cents per dollar goes to this out of control pension costs....people fleeing the state, property taxes out of control and a #2 ranking from Finacial Times. Magazine as the " second most taxed state in the United States."

Sid Saltfork wrote on May 11, 2015 at 2:05 pm

"Excessive retirement benefits"?  Retirement pension before deductions for 30 years of service pays 50% of the average of the last three years of employment.  The pension before deductions for 40 years pays 66%.  A clerical working for 40 years with an average of $33,000 receives $22,000 per year before deductions.  Yeah, real "excessive retirement benefits" that endanger your taxes going up.

I view anti-public employee howlers as cheap, and fatherless.  Yeah, Cheap B------ds, C.B.'s.  Better move, or pay up.

Citizen1 wrote on May 09, 2015 at 4:05 pm

This ruling will result in the largest single transfer in history to the haves from the have nots.  Taxpayers will no longer be able to fund their own retirements because they have to fund the fat retirements of those who retired at age 48 and who are screaming that they are entitled.  Yep   Moving

Sid Saltfork wrote on May 11, 2015 at 2:05 pm

Public pensions cannot be paid to a person age 48.  The person may have earned 26 to 28 years of service, but they will not receive their pension money at age 48.  Plus, your first sentence shows the absurdity of your comments.

So, your still moving?  Please let the other commentors know when your ready.  I will gather a crew of retired public employees to help you pack when your ready.  In the mean time, talk about what you know. Try corn and bean prices, or that wiley coyote you shoot at.  

Rocky7 wrote on May 09, 2015 at 4:05 pm

The legislature has ducked this issue for too long.  I recall in 1993 attending a meeting where a local member of the legislature claimed he didn’t have any idea why the pension was underfunded. During the question period, I got up and told him that the legislature is responsible for failing to pass adequate funding bills.  In the middle of my comments, interrupted me, so I said, “Sir, I didn’t  interrupt you when you spoke, so please show me the curtesy and not interrupt me,” and finished.  He turned pale.  When I finished, he admitted that I was correct.

With elected officials , in the Illinois legislature, who talk a good game and then are forced to admit their errors, don’t expect anything.

Joe Melugins wrote on May 10, 2015 at 7:05 am

Rauner needs to read the Constitution and the decision more carefully.  Neither the Constitution's public pension protection clause or the Court's ruling say that only "earned" benefits are protected.

To the contrary, I think that the Illinois Supreme Court's decision also provided some direction that they consider current employee's future work yet performed is also protected by the contractual relationship of the Constitution's pension clause. They stated that those protections begin at the day of hire, not the day of retirement. In paragraph 46 the decision says:

“The protections afforded to such benefits by article XIII, section 5 attach ONCE AN INDIVIDUAL FIRST EMBARKS UPON EMPLOYMENT IN A POSITION COVERED BY A PUBLIC RETIREMENT SYSTEM, not when the employee ultimately retires.”

And both the Illinois and U.S. Constitutions do not allow post de facto laws that diminish or impair the obligations of contracts. That would seem to imply that only new hires can have their benefits changed, even if the current Illinois Constitution's pension clause was changed.

Bulldogmojo wrote on May 10, 2015 at 7:05 pm

 

Rauner is really throwing handfuls of spaghetti at the wall to see what will stick. Thanks to conservatives who elected an out of touch greed motivated moron WHO HAS NO PLAN. 

 

Beware of billionaires seeking higher office, they only want tax breaks for themselves.

 

Do you people really believe a guy who would pay 6 figures to join a wine club has any interest in people who live paycheck to paycheck? You elected Gordon Gekko you tea party dopes

Joe Melugins wrote on May 10, 2015 at 7:05 pm

Rauner needs to read the Constitution and the decision.  Neither the Constitution's public pension protection clause or the Court's ruling say that only "earned" benefits are protected.

 

To the contrary, I think that the Illinois Supreme Court's decision also provided some direction that they consider current employee's future work yet performed is also protected by the contractual relationship of the Constitution's pension clause. They stated that those protections begin at the day of hire, not the day of retirement. In paragraph 46 the decision says:

 

“The protections afforded to such benefits by article XIII, section 5 attach ONCE AN INDIVIDUAL FIRST EMBARKS UPON EMPLOYMENT IN A POSITION COVERED BY A PUBLIC RETIREMENT SYSTEM, not when the employee ultimately retires.”

 

And both the Illinois and U.S. Constitutions do not allow post de facto laws that diminish or impair the obligations of contracts. That would seem to imply that only new hires can have their benefits changed, even if the current Constitution's pension clause was changed.  Does Rauner propose to change the U.S. Constitution and also multiple sections of the Illinois Constitution?

fflkommish wrote on May 11, 2015 at 10:05 am

It will be neat when Illinois is the first (or second) state to declare bankruptcy.  Promised pensions can't be paid if they can't be paid.  

The unions need to come to the table to protect their current membership - a scaled back plan going forward, along with a calculation of the current benefit that has been earned, is the only real hope.

Sid Saltfork wrote on May 11, 2015 at 1:05 pm

The federal, and state governments cannot declare bankruptcy due to their ability to raise revenues.  The "bankruptcy" interpretation of cities going bankrupt does not work for states.  It is just another grubby myth to steal benefits earned by others that the lazy, cheap howling mob hangs on to when wanting to shred their responsibilites for services provided to them in the past.

For those who disagreed with the decision, it was not your money that the theft attempt was directed toward.  Try working for the public instead of complaining.  Of course, you would have to be qualified, and pass a test.  I consider the anti-public employee population to be fatherless, and cheap.  Yeah, a bunch of C.B.'s. 

fflkommish wrote on May 11, 2015 at 1:05 pm

Raising taxes is not the same as printing money.  And, raising taxes doesn't immediately translate into money available to pay pension benefits.  

The legislators need to start the ball rolling by ending their own pension program and switching to a 401k-style plan as part of their compensation.

Sid Saltfork wrote on May 11, 2015 at 2:05 pm

That will not happen.  Most of the legislators have successful careers outside of their "part-time job" as lawmakers.  Their political "contributions" from PAC's pay more than their pensions.  The upcoming law not requiring C.D.'s for grain truckers is a good example.  Who is the lobby group pushing it?  Will, or have been, contributions be made to legislators to pass the bill?  You betcha.

Illinois is not going to improve it's financial situation by making cuts, and attempting to steal others money.  Income taxes will have to be raised.  Retirees, not only retired public employees, will need to be included in state income taxes also.  Adopting MInnesota's approach to financial stability maybe an answer.

Kenny Powers wrote on May 12, 2015 at 9:05 pm
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The point of what I said is if someone upholds their end of the bargin for 30 years you should not be able to steal their money I could go into more details about the situation but someone censored me. Even Rauner said a deals a deal