More on Monday’s meet up with Biss and Nekritz. More on Bizarro World.


Illinois Representative Elaine Nekritz.

I have already posted about Monday night’s pension forum at Niles North High School sponsored by the North Suburban Teachers Union of the IFT.

The political cynicism and pension ignorance of the legislative participants (Biss, Nekritz, Fine and Gabel) were on display for all to see.

Representative Fine, a newbie, said nothing.

Gabel, who must have thought she was too cool for school, made some lame comment about something she heard from somebody in TRS about amortization. That was her singular contribution to the discussion.  Ralph Martire of the Center for Tax and Budget Accountability immediately shot her argument down.

Both Gabel and Nekritz tried to suggest that the TRS board agreed with them. The TRS board has taken no position on any of this.

In the earlier post I told how Nekritz also tried to pin the non-payment of pension contributions to the public employee unions. And how IFT President Dan Montgomery had to explain to the Democrat’s second-in-command in the House, right behind Boss Madigan, that the unions had early on taken the state to court for being deadbeats to the state’s public employee pensions. The courts ruled against the unions and against the employees. The courts said that the law requires that benefits are paid. The law does not require specific funding by the legislature of the pension funds.

When the General Assembly voted for two years of  pension holidays in 2005, it was the Democrats, Michael Madigan and Nekritz who came up with the idea.

In the Bizarro World of Illinois politics, it was the Republicans who opposed it.

Check this out:

Friday, May 27, 2005

By Aaron Chambers
Source: Rockford Register Star Dems propose ‘pension holiday’

SPRINGFIELD — Democratic leaders want to balance the state’s budget by postponing payment of part of the state’s pension bill, a move that could pre-empt a politically damaging summertime budget fight but cost taxpayers billions in the long run.

“We’re not taking anything from” the state’s five pension systems, said Rep. Chuck Jefferson, D-Rockford. “We’re just taking longer to pay it back.”

Indeed, support for the plan pitched Thursday to cut the pension payment for state employees appeared to enjoy broad support among Democrats in the Legislature. The plan would eliminate much of a deficit pegged at $1.2 billion or more.

Republicans balked at the so-called pension holiday. They noted that Illinois has among the worst-funded pension systems precisely because lawmakers have long neglected them.

“Pension holiday? I think it’s a pension raid,” said House Minority Leader Tom Cross, R-Oswego.

Sen. Dave Syverson, R-Rockford, was not so kind: “It is a raping of the taxpayers.”

How it’s envisioned

The agreement reached by Gov. Rod Blagojevich, Senate President Emil Jones Jr. and House Speaker Michael Madigan involves reducing the state’s next pension payment to between $1.1 billion and $1.35 billion.

The plan involves suspending a law that mandates a payment of $2.1 billion. If successful, it could allow Democrats to end the spring legislative session by Tuesday. Once budget talks drag into June, Democrats need a three-fifths majority to adopt a budget, requiring them to get Republican votes to implement any spending plan for the fiscal year that begins July 1.

Thursday’s deal among Democrats followed weeks of negative publicity for Blagojevich, whose approval ratings have tanked in recent months. In particular, the joint effort marked a distinct change in posture for Madigan.

Although he is chairman of the Illinois Democratic Party, Madigan joined Republicans last year in a budget fight against Blagojevich and Jones. In early May, Madigan said that coalition persisted and he is prepared for another fight.

“It could well be the case that things are just so bad that (Madigan) thinks it’s going to hurt his people,” said Chris Mooney, a political scientist at the University of Illinois-Springfield. “I don’t see why he would care about Blagojevich personally unless it affects his people in the House.”

Paying more later

The pension payment reduction would cost taxpayers as much as several billion dollars. Because the dollars withheld would not be earning interest in pension funds, the state would have to pay more in the long term to make up the difference.

Lawmakers and pension analysts said every dollar withheld now costs the state $7 to $13 over the long term.

“To the extent that they owe us a dollar and they give us a dollar, that interest is compounded and that’s going to generate a very healthy long-term return,” said James Hacking, director of the State Universities Retirement System of Illinois.

“On the other hand, if they don’t pay us that dollar, then we lose that same amount of earning that we would have received over that same period of time.”

Hacking said the payment reduction would be “extremely detrimental” to the pension systems, and they might liquidate assets to cover pension benefits to state retirees.

Democrats defended the payment reduction plan, saying Republicans failed to produce constructive solutions for the state’s fiscal crisis.

“We’ve run into a brick wall really this year on the financial side,” said Rep. Gary Hannig, a Litchfield Democrat who is Madigan’s point man on budget matters. “And it seems like the only option we have is to restructure our pension payments.”

Madigan spokesman Steve Brown added that Madigan’s move did not reflect a departure from his coalition.

“The coalition still exists,” he said. “It just has some different members.”


2 Replies to “More on Monday’s meet up with Biss and Nekritz. More on Bizarro World.”

  1. Evidence of a history of under funding. As for Monday night’s meeting at Niles North – Ralph Martire presented a long-term, well-documented, sound plan which addressed the pension crisis. Bliss and Nekritz appeared with no concrete plan and only spoke about taking from buckets and blaming the unions. This was the second meeting with Bliss and Nekritz with no real plan beyond a bill which they wrote with apparently no numbers behind it they care to share with their consituents.

  2. For those of you who want a copy of Ralph Martire’s presentation (and I strongly recommend that you have it in front of you when you dial up your legislators tomorrow, as we are once again being asked to do!), go to NSTU=North Suburban Teachers’ Union, the generous IFT folks who sponsored Monday’s forum.
    I must add, in defense of Representative Gabel, that she did, at our Wilmette Pension Meeting a few weeks back, say that she would co-sponsor the bill for a graduated tax (it is House Joint Resolution for a Constitutional Amendment 0002, I believe–correct me if I have it wrong), and she also said that “the C.M.E. (Chicago Mercantile Exchange) & corporations need to pay their fair share.” For that, she received a big round of applause from the audience. Fred is correct in saying that she wasn’t sure about the re-amortization schedule, but my take on it was not that she was agreeing w/Nekritz, as she (Gabel) said,”A concern is for how long we want to re-amortize it.”

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