Rauner adopts Madigan plan for pension cost shift to local school boards.

The Chicago Tribune reports this morning:

Republican Gov. Bruce Rauner’s budget on Wednesday will propose having Chicago Public Schools, downstate and suburban school districts and state universities pay more of their teachers’ pension costs, in an attempt to save state government millions of dollars a year.

The proposal is grand larceny.

Rauner stole the idea from Democratic Party state chairman and Speaker of the Illinois House, Michael Madigan.

Rauner likes to blame every problem in Illinois on Michael Madigan.

Then he steals Madigan’s idea.

The pension cost shift is a Democratic Party idea. And a terrible one.

Currently, local school districts pay a small amount into the state’s Teacher Retirement System. Active teachers pay much more – 9% of their salary. Return on investments adds more. The state pays the rest.

Or doesn’t.

The cause of the $130 billion dollar liability – what the state owes to the pension system – is the result of 7 decades of being a deadbeat. Money that was intended to the pension system was diverted to keep corporate and other taxes low.

When Madigan proposed moving all or part of pension payments to the local school districts as part of his pension reform plan, the Republican’s rejected it.

Now Rauner is including it in his budget proposal.

Here’s the problem.

Most school districts in Illinois are in deep financial trouble. Those that aren’t on the state’s financial watch list are running at a deficit, according to the ISBE.

This situation is rooted in the way school districts are funded in this state. We rely nearly totally on local property taxes. The rate of taxation is highest in those communities which have the lowest property values.

Right. The poorest towns pay property taxes at the highest rate so that they can keep their schools open.

That’s because the state doesn’t raise enough revenue to pay its debts. A flat income tax and tax breaks to corporations have created this mess.

What happens if the state adds to local schools the cost of pensions?

Say goodbye to education programs, manageable class sizes and teacher raises to keep up with the cost of living.

It is a recipe for disaster.

It came from Madigan.

Stolen by Rauner.

Rauner’s Illinois shut-down will cause a lot of hurt. What about pension checks?


State Comptroller Leslie Munger.

There was this interesting story in the Springfield State Journal Register today:

Illinois Comptroller Leslie Munger on Wednesday outlined looming payment delays if a new state budget is not in place by July 1.

The General Assembly and Gov. Bruce Rauner remain at an impasse in negotiations as the governor asks for reforms to workers’ compensation, a property tax freeze and other changes as part of a deal.

The first serious crunch will be July 15, which is when the first scheduled payroll for the new fiscal year is supposed to go out. Payments will stop earlier for new Medicaid and vendor billings, but it is unclear when exactly that will affect people since there is a delay in providing services and billing for them.

Some payments, such as pension checks, debt service payments and income tax money channeled to local governments, will continue.

“I am here as the state’s chief fiscal officer to urge the General Assembly to avoid causing this unnecessary hardship and work with the governor to pass a balanced budget,” Munger said at a Chicago news conference.

This story will be updated.

Well, that didn’t occur to me.

I wrote Rich Frankenfeld from TRS:

Hi Rich,

I’m surprised by this, since it never occurred to me that a state government shutdown would impact pensions since we are not paid out of the state budget directly, but through TRS.

Is this just to calm people’s fears?

Rich emailed me back:

If there is no one working at the comptroller’s office, who would process the checks? The comptroller, in effect, said the checks will get processed. 

So, Leslie Munger is mailing out pension checks.

Did I mention she is running for the seat she was appointed to after Judy Topinka died.

So is State Senator Dan Biss.

So is City Clerk Susan Mendoza.

Suddenly there is a lot of concern for several hundred thousand voting pensioners.

Meanwhile the Governor’s demands are going to cause a lot of other people a whole lot hurt. And he will cause a lot of hurt on seniors in lots of different ways.