Kentucky teacher pensions. Can you hear us yet?

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Here in Illinois we have been fighting the battle to protect promised public employee pensions for many years.

In 2015 we won a major victory when the state Supreme Court upheld the pension protection language in the state Constitution.

Those of us who organized, blogged and went to Springfield often found us deserted by our own state union leadership as they looked to cut a deal that would cut us out.

It was really good this week to see teachers in Kentucky by the thousands rallying at the state capital in defense of their pensions.

Fellow pension blogger Glen Brown reports on his blog today, starting with a CNN report:

“More than 20 Kentucky counties had schools close Friday after the state Legislature approved changes to their pension on [March 30].  Educators, who are furious over the pension issue, called out of work sick or requested substitutes in protest.

“The bill, which overhauls the state’s pension, passed mostly on party lines and heads to Gov. Matt Bevin, who supports reforming the system. State leaders say it’s critical to fix the pension crisis, which ranks as one of the worst in the US.

“Kentucky teachers have opposed changes to their pension, which was inSenate Bill 1 that proposed reducing benefits. But in a surprise move, elements of Senate Bill 1 were tucked into another bill, Senate Bill 151, which had been about sewage services, reported several CNN affiliates in Kentucky. And the new, nearly 300-page Senate Bill 151 passed both the state House and Senate on Thursday to the chagrin of teachers and retirees who crammed into the Capitol. ‘Just vote no!’ they chanted Thursday. ‘Vote them out!’

“The Kentucky Education Association, which represents teachers and other education professionals, slammed the maneuver as a ‘classic legislative bait and switch…’

“A summary of the bill has the following, according to CNN affiliate WKYT…

“Kentucky Republicans tweeted a summary of the bill. Republican lawmakers attempted to allay concerns, saying that the bill is a compromise to save the state’s pension… The bill passed the House in a 49-46 vote and the Senate by 22-15, according to CNN affiliate WLKY.There are 10 veto days following the passage of the bill for Bevin to take action on the legislation. Bevin, a Republican praised the lawmakers who supported the bill for not ‘kicking the pension problem down the road…’

“Inspired by the West Virginia strike, in which teachers went on strike and won concessions, teachers are similarly organizing and publicly pressuring their state lawmakers in states including Oklahoma and Arizona.” 

For the full report by CNN’s Amir Vera, Marlena Baldacci and Dave Alsup, click here. 

Glen adds his own commentary:

In Kentucky, the legal basis for protection of public pension rights under state laws is contractual, like most other states. Kentucky’s pension accruals are protected, but past only and not the future. In Illinois, accruals are protected past and future; the legal basis that safeguards pension accruals is the Constitution of the State of Illinois. Two other states—New York and Alaska—are protected past and future. Four other states’ pension accruals—Arizona, Michigan, Louisiana and Hawaii—are protected past only.

The rolling national teacher revolt has addressed many school funding issues. In West Virginia it was about teacher pay. In Oklahoma it is about class size, classroom support and general education funding. In Kentucky it is about pensions.

For years, those of us fighting to defend promised pensions in Illinois warned that the pension attack was coming to your state. Some listened. Some didn’t.

I can recall on more than one occasion when several of us, including a retired activist buddy who had left Illinois for retirement in Florida, was told dismissively by national organizers that the pension fight was too local and provincial to Illinois to be included in their national education conference. There was no room for even one panel.

Now Kentucky teachers are shouting.

Can you hear us yet?

 

 

Judge rules against Chicago park district pension theft.

 

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Judge Neil Cohen

As a result of a pension deal between a number of unions representing park district workers. the Illinois Democratic Part legislative leadership and the Chicago Park District,  members would pay an additional 3 percent of members’ pay and receive lesser benefits.

Writing about it in 2013, Greg Hinz in Crain’s:

In exchange, workers who now contribute 9 percent of pay toward their retirement would gradually move up to 12 percent by 2019. The figure would remain there until the 90 percent-funded target was hit, eventually dropping to 10.5 percent.

 Also, for district employees hired prior to 2011, the minimum retirement age would move from 50 to 58. But for newer workers, who are covered under a different standard, the age for normal retirement would drop from 67 to 65.

In one other big change, annual cost-of-living hikes would move from 3 percent simple (uncompounded) to the lesser of one-half inflation or 3 percent. That change would take effect immediately and apply to current retirees.

CPD’s spokeswoman was unable to comment today, saying officials were not available. But according to Mr. Madigan’s office, the bill has been agreed to by both management and labor and CPD would like it to get final legislative approval before lawmakers head home for the year tomorrow.

No way, ruled Circuit Court Judge Neil Cohen.

The judge ruled last week that Park District workers cannot have their benefits legislated or bargained away.

And then n March 1, Judge Cohen overturned the pension deal on constitutional grounds similar to those cited by the Illinois Supreme Court in 2015.

On March 21, Cohen ruled that since 2013 the higher workers contributions be returned with interest, and orders that the park district property-tax levy return to its prior, lower level.

What the original agreement between the Park District, some unions and the Michael Madigan’s legislature did was to have the Park District pension members pay for the failure of the District to make its pension payments over many years, calling it “sharing the pain.”

Yet when the Illinois Supreme Court upheld the pension protection clause of the state constitution it spelled doom for all of these kinds of agreements.

The legislature can’t constitutionally steal our pensions.

And no union can bargain away our pension rights.

 

What I have as a pension is what I wish for all retirees.

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Perhaps it is crazy to talk this way in an era in which both political parties stand for austerity.

I believe that what public employees receive as retirement security after a life-time of work is what all seniors should have.

It is the 6th year of my retirement from teaching. I am still spending a good amount of my time writing about public employee pensions in Illinois and helping to organize the defense of our contractual, constitutional and moral guarantee of it.

When the Illinois legislature was considering pension theft in 2013, most public polls showed that most people believed that the promise to pay our pensions is a promise that should be kept.

In spite of misinformed reporting like that of Paris Schutz on Chicago Tonight, my pension hasn’t made me or my family rich.

I am still shaking my head at his claim that Illinois educators are “taking home millions in pensions.”

Combined with what we have managed to save and plan for, my pension provides for a retirement that – short of a critical medical event or some other unexpected financial crisis –  is what every working person should have after a life-time of work.

It was not that long ago that unionized workers in the private sector had that kind of retirement security too.

As a result of decades of bi-partisan efforts to reduce social programs and destroy private sector unions, pensions in the public sector have been replaced with employee funded defined contribution plans, if anything at all beyond Social Security.

Most workers can’t afford to pay into them.

And now Social Security is in the cross hairs.

Take the time to read Glen Brown’s post this week on this topic.

As a public school teacher and a parent of public school children, I have always believed what John Dewey taught me:

Over a century ago Dewey wrote in School and Society “What the best and wisest parent wants for his child, that must we want for all the children of the community. Anything less is unlovely, and left unchecked, destroys our democracy.”

It is also what I believe about about those who work.

What I have earned for these years of my retirement is what I want for all those who have reached the years where they no longer should have to work or no longer can work – or frankly, never could find work.

Anything less is unlovely, and left unchecked, destroys our democracy.

 

 

 

 

Retired teachers are killing your puppies! And eating them!

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Paris Schutz reports for public television’s Chicago Tonight on WTTW.

When reporting on public teacher pensions you can count on Chicago Tonight using Illinois Policy Institute talking points, having IPI guests on their panels and Paris Schutz reprinting IPI press releases and then putting his name in the byline.

What a lazy reporter.

“Retired Illinois educators taking home millions in pensions,”posts WTTW on their web site in a report by Paris Schutz.

Never mind that the average teacher pension in Illinois is so low that it qualifies for a low-income deduction in our Cook County property tax.

To justify his premise that teachers are taking home millions of dollars, Schutz lists a couple of over-paid superintendents that get over-the-top pensions.

One of whom, Lawrence A. Wyllie, is an indicted felon and former superintendent of Lincoln-Way High School District 210.

I posted about him.

The average teacher pension in Illinois is $50,000 a year after 35 years of employment.

Even if every over-paid administrator lost their pension, it would have no impact on the $130 billion dollar unfunded pension liability.

The unfunded liability – the pension debt – is a result of the failure of the state of Illinois to pay what they owe into the pension funds.

Seventy years of underpayment.

The banks and Wall Street get the bulk of what the state now pays out as interest on the debt.

Educators, Paris Schutz?

We get peanuts.

Chicago Fox news. Pension facts as phony as the actors who pretend to be the just folks on the street.

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Fox 32’s General Manager Dennis Welsh.

Chicago veteran media reporter Robert Feder has the goods on Chicago Fox 32 General Manager Dennis Welsh.

Welsh went on the air the other day with an editorial that featured ordinary folks complaining about public pensions and the need to raise revenue to pay them.

Except the ordinary folks were all Fox employees.

Who are these supposed ordinary citizens expressing their outrage over high taxes and government workers’ pensions? For a few seconds in small print at the bottom of the screen it says: “Illinois Taxpayer enactments performed by Fox 32 employees.” In other words, they’re all Fox 32 staffers being used as props for the boss.

That’s not all. Fox 32 is paying to promote Welsh’s rant in Facebook ads, according to Illinois Working Together, a coalition of unions including chairs of the Illinois AFL-CIO and Chicago Federation of Labor.

“@Fox32News is PAYING TO PROMOTE this video that blames all IL taxes on pensions + advocates constitution changes,” Illinois Working Together tweeted this week. “It’s one thing for a newscast to air its political views/advocate policy change. It’s a very different thing to *pay to promote* those views. Apparently the “views expressed” may or may not represent @Fox32News. So . . . who paid for the Facebook ads?”

Welsh did not respond to a request for comment Wednesday.

Fox 32 sources said the editorial was produced outside of the news department and did not involve news personnel. “We’re not happy about it,” one insider said..

It is more than the people in the ad that are phony. So is everything Welsh said, including “the” and “it.”

Channel 32 staffers, pretending to be random folks, recite their scripts complaining that their taxes are paying for “unsustainable public pension costs” instead of paying for roads and “educating our kids.”

Welsh knows better. He knows that seventy years of unpaid pension dollars were diverted to pay for roads and schools because Illinois revenue, taxes on the wealthy, were kept unsustainably low.

Welsh calls for a constitutional amendment to erase the pension protection clause from the Illinois Constitution knowing that this will do nothing to erase the $200 billion dollar (according to Bloomberg) pension liability.

 

 

Pensions. It is true that I get impatient, but 70 years is a long time to wait for a problem to get fixed.

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Tune in to this week’s Hitting Left with the Klonsky Brothers. Our guests will be Jay Rehak, a teacher at Whitney Young High School and president of the board of trustees of the Chicago Teachers Pension Fund. Joining Jay and my brother will be John Dillon and Glen Brown, both pension bloggers and what some in the leadership of the Illinois Teachers Union refer to as the Perfection Caucus. That’s because they have never been willing to concede basic contractual and constitutional principals.

You can still listen to last Friday’s HL on podcast. Our guest was gubernatorial candidate and current State Senator Daniel Biss.

Senator Biss was on the wrong side of the pension issue for years until the Illinois Supreme Court ruled his solution unconstitutional.

To his credit, he now says that he was wrong.

Senator Biss may have felt a level of frustration coming from me in our conversation. It was not my intention to be rude. You don’t invite someone to be a guest in your home or on a radio show and treat them rudely.

Plus, on a range of important issues, Senator Biss does the right thing.

Just the other day a judge blocked enforcement of a good bill that Senator Biss introduced and got passed in the Illinois legislature. Biss’ law required hospital and medical clinic professionals to tell pregnant women about all their available options, including abortion.

But back to my frustration.

First of all, Senator Biss did not complain. In fact, we received a friendly note of thanks and an offer to return to talk more.

And my frustration reaches far beyond Senator Biss. It goes back seventy years to legislative, bi-partisan pension thievery.

It goes back seven years to the creation of a Tier II for teachers hired after January 1, 2011. If Senator Biss’ bill was pension theft, the creation of Tier II was grand larceny of felonious proportions.

My frustration extends to the recent legislative creation of a Tier III which establishes a private investment option, placing a firm foot in the door for pension privatization. Plus it moves pension costs to already cash-strapped local school districts.

Senator Biss said that his mistake in pushing so-called pension reform was buying into the Culture of Springfield, of failing to address the core problem of adequate revenue and a fair system of taxation that places the responsibility for meeting the state’s obligations on those who can most afford it.

In my opinion, most of the leading candidates for the Democratic nomination for governor are firmly rooted in the Culture of Springfield.

The current governor doesn’t only buy into it, his turnaround agenda embodies it.

I will vote for somebody in November who is not Bruce Rauner.

But listen this Friday, 105.5fm at 11AM and streaming on lumpenradio.com and hear about about a Movement that defeated a major piece of legislative pension theft.

A Movement was the only thing that could defeat it.

And as for my impatience, I will try and do better.

HITTING LEFT WITH THE KLONSKY BROTHERS PODCAST.

A pension story like no other. Like every other. The Memphis sanitation workers + 49 years.

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Memphis, 2017. Photo credit: Fred Klonsky

April, 2018 will mark the 50th anniversary of the assassination of Dr. Martin Luther King in Memphis, Tennessee.

This past March, Anne and I drove to Memphis to pay honor to the man and to remind ourselves of the struggle of Memphis sanitation workers. It was that struggle that brought King to Memphis.

Today’s NY Times publishes a story about public pensions that is like no other.

In its essence, it is a story about public employee pensions that is like every other one.

It is about how labor is rewarded and not rewarded. It is about how there is justice and injustice for working people when they finish their working lives.

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Memphis sanitation workers strike, 1968.

It is about how even after nearly 50 years, for the 14 surviving striking Memphis sanitation workers, there is still little in the way of real justice.

The sanitation workers of the 1960s have long faced a gap between their retirement benefits and those of other city workers. The difference hinged on a choice after Memphis recognized a union for the sanitation workers: They elected to participate in Social Security instead of Memphis’s pension plan. Only later did it become clear that the Social Security payments would be insufficient to provide meaningful retirements, setting off years of talks and searches for legal loopholes.

Elmore Nickleberry was a striking Memphis sanitation worker when Dr. King was murdered. He is a Memphis sanitation worker today at the age of 85.

He likes his job but is concerned about retirement and living on what he will get from the tiny Social Security check he will receive.

Memphis’ mayor has come up with a grant of $50,000 for each of the 14 strike survivors.

A one-time only retirement payment.

“They’ve been saying they didn’t have no money, so I didn’t think it was ever going to happen,” Mr. Nickleberry said in an interview this month. “I was shocked.”

Of course, Mr. Nickleberry is happy to receive it.

After 63 years of work he is still not sure when he can retire.

He said the expected payment and a stronger retirement offered to those who are not yet retired is a measure of vindication, decades after he first protested.

“That’s what I wanted,” he said softly, “always wanted.”

Frank Gallagher is after your retirement savings.

Frank Gallagher is the perfect metaphor for state governments and Wall Street when it comes to retirement pensions.

If you’re not a regular viewer of the television show Shameless you are missing a great portrayal of one of the most amoral human beings in the history of entertainment.

That would be Frank Gallagher, played by the wonderful William H. Macy.

Frank is the father of a barely-working class, struggling Chicago south side family, the likes of which makes the word dysfunctional seem wholly inadequate.

But it is Frank I want to focus on here.

Frank Gallagher is a drunk and drug addicted soul whose only reason to actually get a job is to scam some workman’s comp within the first day of work.

In fact, in one episode he takes a job because it requires him to breathe toxic fumes. But when he discovers it would take years to get sick enough to collect on it, he grabs a staple gun and staples his hand to a wall.

The time he is not spending on getting sotted at The Alibi, the local pub, he is working on separating somebody, mostly women, from their savings accounts. Or their meds.

I couldn’t help thinking of Frank Gallagher as I heard about Donald Trump’s plan to toss out a simple reform negotiated under the Obama administration called the Fiduciary Rule.

The Fiduciary Rule was an attempt to keep Wall Street from acting totally like Frank Gallagher when it comes to our retirement savings and investments.

It would require financial advisors to act in their clients’ best interests.

Crazy, right?

The United States Chamber of Commerce has advised Trump to dump the rule.

We are urging immediate action to undo the Department of Labor’s Fiduciary Rule. If enacted, it would choke economic growth, increase frivolous litigation against financial advisers, and make saving for retirement more difficult for hardworking Americans.

Damn! That “more difficult for hardworking Americans” part is exactly the hustle Frank Gallagher would use.

The Labor Department estimates that if enacted, the Fiduciary Rule  will cost industry $16 billion over the next decade, but that it will save IRA investors more than $33 billion.

It seems that by electing Donald Trump, we just invited Frank Gallagher into every current and future retiree’s home.

Rauner put on this earth to cut pensions.

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Illinois has gone without a budget longer than any state since the Great Depression.

That would be the one in 1929. Not the Bush Depression of 2008.

When corporate billionaire Bruce Rauner took office promising to shake up Springfield he presented a list of 44 demands, most aimed at working families, in exchange for his signature on a budget.

The Democrats in Springfield, most of whom owe their seats to union and working family voters, said no.

Some would like to blame both sides for the budget stand-off.

Not me. Long-time readers know that I am no fan of Michael Madigan or Springfield Democrats. In fact, when we had a Democratic Governor in the shape of Pat Quinn, everybody was a bit too cozy and collaborative, especially when it came to cutting pensions.

But this is all on Rauner.

Rauner spent $50 million on this last election trying to blame others for this budget debacle and the campaign was a massive failure.

In response there are now reports are that Governor Rauner has reduced his Turnaround  Agenda from 44 to five.

The five, Rauner says, include workman’s comp reform, cutting property taxes,  the school funding formula and – wait for it – pension reform.

He says he is willing to even give in on a few of the five. Want to bet which one he wants to keep?

Yes! Pensions.

You recall that the Illinois Supreme Court ruled in 2015 that state employee pensions were covered by the pension protection clause of the Illinois constitution. The clause states that contractual pensions may not be diminished or impaired.

For current retirees like me this is an ironclad promise and obligation, said the court.

But there is a small loop hole when it comes to current employees. Contract law allows for changes in an agreement as long as there is consideration given. If there is a change in the agreement, employees must be given something of equal or greater value in return. And it may be bargained.

Democratic Senate President John Cullerton and the Governor believe that this is the opening they need.

As my colleague Glen Brown wrote in a recent exchange between the two of us, cross posted on both of our blogs:

Nevertheless, there will be another attempt, not long after the election, for a “modification of contract principles.” Any attempt at modifications of the Pension Protection Clause by the Illinois General Assembly should be seen for what it is: another challenge by the current General Assembly and governor to steal money from the public pension systems so they can avoid addressing the real causes of the state’s budget deficits: the pension ramp, the resultant pension debt, and the state’s insufficient flow of revenue.

I have written many times: contracts supported by consideration are often one-sided, advantageous arrangements, especially a consideration from the Illinois General Assembly that would be in exchange for reductions of originally-vested benefits assured by the Illinois Constitution.

It appears that what the Governor has done is to reduce his demands from 44 to five. But there is really just one.

He can’t touch retirees.

I believe that any deal to cut the pension guarantees of current employees will face the same legal result as the last attempt.

Illinois has had nearly two years without a state budget because Rauner believes he was put on this earth to cut pensions.

Been there. Couldn’t do that.

Over bargaining? What didn’t we get?

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So, this happens.

I was at a social event and a fellow state retiree introduced me to an old friend of his that he went to school with on the North Shore, like fifty years ago.

A boarding school.

My friend is a bit of a provocateur, so he mentions my pension activism and that I was a teacher.

I shot him a look.

It seems that there are two things that everybody thinks they are experts on.

Teaching and pensions.

I taught for 30 years. So I actually know something about that. I write, research and organize around pension rights. So I actually know something about that.

Yet I seem to run into people who do neither, but tell me that they know way more than I do.

This is especially true about men who went to boarding school on the North Shore.

They know about these two things because, well, they went to school and the read Crain’s.

“The problem with pensions is that they were over bargained,” he explained knowingly to me.

“Over bargained?” That’s a new one.

Another thing I spent years doing is bargaining. I can remember every one of the dozen teacher contract negotiations I was involved in. So, I know something about bargaining too. I never heard of over bargaining.

This is what happens: We start at one place and through the process of collective bargaining, we give and get some things. The other side gives and gets some things. You keep up the process until each side can walk away satisfied. As a representative of the teachers I always tried to do better than we did last time.

But over bargained?

By this I assume that he thinks we got too much.

The other side always thinks that.

But.

If our pension was over bargained and if bargaining means you give and you get, what didn’t we get?

In the middle of this conversation my mind starts wandering, thinking about what we gave and what we didn’t get.

The man from the North Shore was convinced we would never get our pension.

I told him we would.

He smiled that condescending North Shore smile.

We never got to the other subject he is an expert on.

Teaching.