Senator Kwame Raoul, “It depends on what the premise of what he wants. He could say he wants to put me in slavery. Right? Should I meet him halfway?”
There were a lot of frightened public employee pension recipients yesterday when the news flashed that Illinois Comptroller Leslie Munger said she didn’t have the money to make pension payments.
I got tons of email and more than a few phone calls.
I posted twice on this yesterday, including reposting an email that TRS Communications Director Dave Urbanek sent out explaining it did not impact what TRS was paying out to annuitants.
This has been a point of confusion since the state budget battle began. We do not receive our pensions directly out of the state budget. Our monthly pension check comes out of TRS funds, which are completely separate.
Where do TRS funds come from? We teachers pay into it. We have never missed a payment. Our school districts pay a small amount into it. The state of Illinois pays into it. Until a few years ago the legislature more often than not failed to fund it at the level they were supposed to and took frequent pension holidays. And then there is the return on investments.
You don’t need to be an expert on high finance to see that the last source – return on investment – is fully dependent on all the others. The more we have to invest, the more we get in return. The current situation in which we are less than 50% funded means TRS has less to invest and receives less in return.
The rate of return on TRS investments has been pretty good over the years. Which means if we were funded at the level we were supposed to be, we would be in great shape and there would be no pension crisis now.
When Comptroller Munger fails to make the state’s $560 million payment in November, that is money that cannot be invested or bring a return. With no budget agreement there will be another missed payment to TRS in December. These are dollars lost on investments that are lost forever, even after the missing payments are made up, if they are made up.
Why is there no budget agreement?
Because Governor Rauner will only agree to a budget if the legislature votes to include his union-busting turnaround agenda.
Without a budget, only those programs that are federally mandated or court ordered will be paid.
And first in line ahead of even those payouts are the banks that hold bonds, the state’s debt.
Because state debt is a profit center for Rauner’s friends on Wall Street.
Some have called on the Democrats and Rauner to compromise, meaning that the Democrats would agree to some of the union-busting demands of Governor Rauner.
“It depends on what the premise of what he wants. He could say he wants to put me in slavery. Right? Should I meet him halfway?”
Meanwhile our pension theft continues.