Madigan's pension plan speaks volumes

People have been waiting for months for Illinois House Speaker Michael Madigan to take the lead on the public pension issue.

Michael Madigan finally laid his cards on the table when he introduced pension legislation Tuesday. Or did he?

One never knows with the inscrutable Madigan, who operates by the theory that he who says least has the most power. Perhaps the most one can say is that Madigan introduced a bill that purports to reflect his idea of what is necessary to fix Illinois' underfunded public pension systems.

Reflecting Madigan's dominance of legislative proceedings in Springfield, the House Personnel and Pensions Committee voted 9-1 Wednesday morning to send the proposal to the House floor.

Madigan's proposed legislation is sure to raise howls of protests from public employees and public employee unions. But, significantly, it's already received an endorsement of sorts from the governor's office. Brooke Anderson, a spokeswoman for Gov. Pat Quinn, described it as a "solution that fixes the problem," an overly generous assessment. A spokeswoman for state Rep. Tom Cross, leader of minority Republicans, said he "welcomes any sort of comprehensive look at pension reform."

But it would be a stretch to say this is a done deal. Madigan appears to remain at loggerheads with his legislative junior, Senate President John Cullerton, who has a different interpretation of what's constitutionally permissible and a different proposal.

Since the two plans are incompatible, someone will have to cave. Madigan doesn't cave very often.

But his proposal includes one significant concession — it abandons his plan to shift the cost of teacher pensions to local school districts. That's a big deal to some legislators, particularly downstate Republicans concerned about holding the line on local property taxes.

But in our view, Madigan went too far. While dropping the cost-shift plan makes sense, it is perfectly reasonable to hold local school districts responsible for the end-of-career salary boosts they've handed out for years to retiring teachers. We're talking about outsized pay hikes, those in excess of annual increases given to non-retiring teachers, to encourage veterans to leave. They forced extra costs on the Teachers' Retirement System, and there's no reason that local school districts should not pick up the tab.

Unfortunately, Madigan's plan would place the lion's share of the concessions on public employees by requiring larger retirement contributions while reducing benefits.

The plan would limit the salary on which a pension could be based to $110,000 and reduce annual cost-of-living increases. It would also require the state to make the annual pension contributions it skipped in previous years, self-destructive decisions that created this financial nightmare.

Madigan's action, however, does nothing to address the overriding question — what's constitutionally permissible? No pensioners would get less than they currently receive, but they would get less than they have been promised. Is that allowable under the state Constitution's guarantee that pension benefits cannot be diminished? Only the Illinois Supreme Court can answer that question.

Nonetheless, the Madigan plan — despite its unfortunate impact on state employees — is a welcome addition to the debate in Springfield. The General Assembly cannot allow this ever-growing financial problem to fester, and the Legislature can't act until Madigan is ready. His push may well force necessary action.

Sections (2):Editorials, Opinion

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EL YATIRI wrote on May 02, 2013 at 12:05 pm
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A promise to be spoken is a promise to be broken!  Who cares if it's unconstitutional!  

Sid Saltfork wrote on May 02, 2013 at 12:05 pm

You sure don't.  Tell that to your creditors, and see what happens.  They may even repossess your little white dog.

EL YATIRI wrote on May 02, 2013 at 2:05 pm
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Sid, politicians don't have to follow any rules, they do as they please in this country, and it doesn't matter what party they belong to.  The US Constitution is meaningless in this police state.

Sid Saltfork wrote on May 02, 2013 at 4:05 pm

I am old; but I have not yet got as cynical as you seem to be.  I still hold faith in the doing the right thing.  I did my job well helping others for over 40 years.  I did nothing wrong.  My pension contribution was taken out of every paycheck.  I worked overtime with no additional pay.  I travelled as required paying the majority of the cost myself.  I am not complaining about my previous job.  I liked helping others.  I retired based on my life plan.

My employer did not make it's required payments into the pension system.  If it were a private employer, it would have been required to do so by the courts.  Now, my previous employer will steal the money I paid into my pension when it did not pay.  You say that my previous employer was "politicians"; but it was not.  It was the State of Illinois with a legislature elected by the citizens of the State of Illinois.  If the state, and federal constitutions are meaningless, that means that any law is meaningless.

nick wrote on May 02, 2013 at 2:05 pm

There is an important point to remember regarding the members of the TRS and the use of the term teacher unions. The largest end of career bonus payments have never gone to classroom teachers.The huge bonus payouts that newspaper editors consistently refer to in their editorials go to administrators.Administrators are not members of teacher unions. Teacher unions do not negotiate for administrators. Administrators make their own individual deals with school boards.School boards arrange the salary and benefits of administrators. School boards negotiated these deals,not with a union,but with the individual administrators.Teacher unions had nothing to do with the salary arrangement of any administrator in Illinois. The great abuse of end of career bonus payments developed as individual school boards worked out fantastic payouts to their favorite administrators. Perhaps local school boards believe that paying huge salaries to certain administrators is in the best interest of their local school district. They have that right, but we cannot associate that practice with a teacher union. Teacher unions are not involved in establishing the salary,benefits or working conditions of school administrators.School administrators are,by a large margin,the highest paid employees of all school districts. They receive the most generous portion of TRS benefits.Newspaper editorial writers always choose to blame teacher unions,for allmost anything. I don't often see an examination of the role of local school boards in any discussion of the pension crisis. Nor do I ever see any mention of the fact that local school boards are always dominated by the interests of the local Chamber of Commerce,local banks,real estate developers and architects.

Sid Saltfork wrote on May 02, 2013 at 3:05 pm

Well stated, Nick.  Madigan made sure to sweeten the deal by agreeing that down state school districts will not be responsible for pension payments like Chicago, and the state will continue to do so.  That brought the Republican side over since property taxes would not be increased to pay for the school districts being responsible for their teachers pensions like Chicago.  Of course, Madigan promised that the state would continue to make the annual payments; but that did not happen in the past.  He added in his bill that there will be a "guarantee" that the state will make pension payments; but the state constitution already holds the state responsible for the pensions even when the state has not made pension payments.  Madigan has been there over 30 years.  He helped to create the problem of the state not paying what is owed.  It is not a Democrat, or Republican thing.  It is not a Chicago, or downstate thing.  It is pure, and simple corruption.  Money not paid as required; spending on corporate tax breaks, municipal grants, and pork barrel projects for the sake of votes and "campaign donations" has led to this immoral act.  The Judges Pension System is exempt from this "pension reform".  Madigan has written a nine page preamble to his bill.  The Illinois Supreme Court can agree, or disagree with the State of Illinois' position that police powers exist due to the state being unable to raise revenue, and reduce spending.  Those "powers" if the judges agree would mean the state constitution, and contract law mean nothing in Illinois while they do in the rest of the nation.

It would, also, mean that the State of Illinois can stiff it's creditors, and investors.

EL YATIRI wrote on May 02, 2013 at 6:05 pm
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Madigan is one of those career politicians I was speaking of.  Of course they are corrupt and bereft of any ethical compass.  I am past cynical and am in the process of moving to another country where the government isn't all powerful as it is here.

Sid Saltfork wrote on May 02, 2013 at 6:05 pm

I sincerly wish you the best of luck.  I will probably end up in a Third World country where my pension will allow me to live above poverty.  I need to improve my Spanish right away.  Maybe, I can sneak into Mexico.....

Lostinspace wrote on May 04, 2013 at 5:05 pm

"Past cynical" is the word.  Past hopeless as well.  The taste of the country's great promise is more and more that of wormwood.

All that is left is to enjoy the spectacle of slow decay and rot.  I am glad I am not young, faced with the future all too easy to foresee.

Sorry, Mr. Saltfork.

Mr. El Yatiri, what country are you thinking of.

One of Five wrote on May 02, 2013 at 4:05 pm

Actually, it are most teachers (as well as administrators) who have gamed the system through inflation of their salaries at the end of their careers to inflate their pensions. In the Chicagoland area elementary teachers routinely get increases (called ROIP) using for axample their $80K salaries to $120K or more. Before the recent law capping the increases to 6% for the last 4 years teachers typically had their salaries doubled ($80K to $160K) in th last four years. Their pensions then and now wind up being near or more than their pre-ROPI salaries.

Don't believe me? Check out your district here: http://www.openthebooks.com

 

Sid Saltfork wrote on May 02, 2013 at 6:05 pm

Your creditability slipped with the "it are most teachers".  Americaneagle.com is behind openthebooks.com .  Their motive is suspect in their slant on the information.