Glen Brown: Today’s News: Lisa Madigan will not appeal the Illinois Supreme Court’s pension ruling, and Eric Zorn of the Chicago Tribune wrote an article entitled “Ok, what about this idea on pensions?”

– From Glen Brown’s blog.

The last line of Zorn’s article is, “You got a better idea?”  

I do, Eric:

Isn’t it about time the state addresses the flawed Pension Ramp?

“…Starting in 1995, yet another funding plan was implemented by the General Assembly. This one called for the legislature to contribute sufficient funds each year to ensure that its contributions, along with the contributions by or on behalf of members and other income, would meet the cost of maintaining and administering the respective retirement systems on a 90% funded basis in accordance with actuarial recommendations by the end of the 2045 fiscal year. 40 ILCS 5/2-124, 14-131, 15-155, 16-158, 18-131 (West 2012). That plan, however, contained inherent shortcomings which were aggravated by a phased-in ‘ramp period’ and decisions by the legislature to lower its contributions in 2006 and 2007. As a result, the plan failed to control the State’s growing pension burden. To the contrary, the SEC recently pointed out:

“‘The Statutory Funding Plan’s contribution schedule increased the unfunded liability, underfunded the State’s pension obligations, and deferred pension funding. The resulting underfunding of the pension systems (Structural Underfunding) enabled the State to shift the burden associated with its pension costs to the future and, as a result, created significant financial stress and risks for the State.’ SEC order, at 3. That the funding plan would operate in this way did not catch the State off guard. In entering a cease-and-desist order against the State in connection with misrepresentations made by the State with respect to bonds sold to help cover pension expenses, the SEC noted that the State understood the adverse implications of its strategy for the State-funded pension systems and for the financial health of the State. Id. at 10. According to the SEC, the amount of the increase in the State’s unfunded liability over the period between 1996 and 2010 was $57 billion. Id. at 4.5 The SEC order found that ‘[t]he State’s insufficient contributions under the Statutory Funding Plan were the primary driver of this increase, outweighing other causal factors, such as market performance and changes in benefits.’” (Emphasis added.) Id. at 4 (In re PENSION REFORM LITIGATION (Doris Heaton et al., Appellees, v. Pat Quinn, Governor, State of Illinois, et al., Appellants) Opinion filed May 8, 2015, JUSTICE KARMEIER delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Burke, and Theis concurred in the judgment and opinion).

The current “Pension Ramp” does not work for the five public pension systems. The “Ramp” entails larger payments today as a result of the 1995 funding law – Public Act 88-0593 – to pay the pensions systems what the state owes. There needs to be a required annual payment from the state to the pension systems. The debt needs to be amortized for a longer frame of time (a flat payment) just like a home loan that is amortized; though the initial payment will be difficult in the beginning, over the long term it will become a reduced cost and a smaller percentage of the overall Illinois budget as it is paid off throughout the years.

How about the state requiring an “actuarially-sound” annual payment to the pension systems?

“Decades of mismanagement and failure to match contributions are the predominant reasons that the state’s pension systems are suffering to the degree that they are today. Years of pension holidays, continually borrowing against the systems without a plan for repayment and a severe economic recession, which caused investments to plummet, further exacerbated the problem” (Senate President John Cullerton).

How about acknowledging the State of Illinois has a chronic revenue problem, and its policymakers have stolen money for decades from public employees’ pension plans to hide these facts?

• “At the core of the budget ‘crisis’ facing [Illinois] is [its] regressive state tax structure. Low-and-middle-income families pay a greater share of their income in taxes than the wealthy… [A regressive tax] disproportionately impacts low-income people because, unlike the wealthy, [low-income people] are forced to spend a majority of their income purchasing basic needs that are subject to sales taxes” (United for a Fair Economy). Illinois income tax uses a single-rate structure that results in low-income wage earners paying more taxes than the wealthy. Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent (The Institute on Taxation and Economic Policy).

Read the entire post on Glen’s blog here.

When it comes to public employee pensions Eric Zorn won’t quit it.

Give the Tribune’s Eric Zorn some credit.

If you must.

He is nothing if not persistent.

What it is, I think, is that he hasn’t gotten over the spanking my friend Glen Brown gave him back in 2012 in a multi-part exchange on the topic of pensions.

Zorn is back with a half-page piece in the Trib today entitled, Okay, what about this idea on pensions.

Zorn is like a backyard rat. He just keeps going back into that garbage pile until he finds a scrap of something he can eat.

It’s not the rat’s fault. That’s what rats do.

So Zorn won’t consider something like raising revenue on the wealthy of this state. HIs goal is to find a way to cut public employee pensions.

He is convinced that there must be a way to get a hold of that pile of money.

His problem is the Illinois Supreme Court. They said retiree benefits were untouchable. And if you can’t cut retiree benefits, and won’t tax the rich to pay their share, nothing in Zorn’s new proposal does anything about the hundred billion dollar pension liability.

For that he just has to wait for current retirees to die.

Which, by the way, was his solution in his recent column on the Dyett hunger strikers.

The reason that the hundred billion pension debt will get smaller is that current Tier II employees are paying it down. They are making their contribution into TRS but must wait until 67 to retiree and then collect much less than current state retirees. In about 20 years they will begin to retire. When that happens, all shit will break loose.

Why? Because their benefits will be less than Social Security requires. That’s against federal law. By then the pension debt owed to Tier II retirees will be so large that nobody will know how to pay them back.

Unless Zorn knows. But if he does, he ain’t saying.

Zorn says that the unions would probably fight his new proposal.

I think he might be wrong about that as well.

It is very likely they will sit down at the table and bargain a reduction in benefits impacting current employees – future retirees.

When a few delegates to last April’s state convention asked the IEA leadership to promise they would never negotiate away what the court’s had given us, they refused.

This was prior to the Illinois State Supreme Court ruling that struck down Senate Bill 1, the pension theft.

This is what I come away with from Zorn’s column today:

The state’s political leadership is like Zorn. They will never quit trying to get a hold of our pension. There is just too much money sitting there. They drool over it as underfunded as it is.

The second take-away is that while current retirees’ pensions are relatively safe, current employees should worry.

And if it is the current state union leadership they are counting on fighting for them?

Double trouble.

Eric Zorn does it again. Talking with the #FightForDyett hunger strikers is negotiating with “hostage takers.”

Jeanette Taylor, a hunger striker seeking to press Chicago Public Schools to establish an academy at the closed Dyett High School, is taken away by paramedics after falling ill on Aug. 26, 2015, after speaking at a Chicago Board of Education meeting. (Antonio Perez / Chicago Tribune)

The Chicago Tribune has the most amazing stable of screwed-up journalists around.

This is not a newspaper.

This is group therapy that we all can listen in on.

Two weeks ago it was Kristen McQueary and her dreams of a major disaster like Hurricane Katrina hitting Chicago so we could get a New Orleans style school reform.

Her op-ed piece included what some thought were some very Freudian images of water gushing through manhole covers.

So, Kristen. How did that make you feel?

Columnist Eric Zorn was obviously feeling jealous. Up until the Trib hired McQueary, Zorn was the weirdest Trib writer in their stable of head cases.

Hunger striking is a form of hostage taking, albeit one in which the captors and the hostages are the same people.

Should we negotiate with hostage takers? Only when it’s literally a matter of life and death.

The captors and the hostages are the same people!

Should we negotiate with hostage takers, Zorn ponders.

But they are the captors! Or the hostages? Or the captors?

Negotiate about what, Eric?

The hunger strikers are asking for a neighborhood high school in an African American neighborhood where there is none.

Eric thinks we should wait until someone dies first?

His column is titled, “When to pay attention to hunger strikers.”

Not yet, Eric. Nobody has died.

Chicago politics. Magical thinking, perfect storms and bean bag.

All weekend I have been asked the same question.

“Is Karen going to run?”

I consider Karen a friend.

But let us be clear. I am not on her exploratory committee, an insider or political confidant.

I don’t like sitting in on strategy meetings.

I’m great at knocking on doors.

But my answer to those who asked was YES.

Because I hope she does and believe she will.

The cynics in the press either ignore the possibility that she will run. Or laugh at the possibility she can win.

When Toni Preckwinkle announced that she would not run, the Trib’s Eric Zorn wrote,  “Mayor Emanuel can now be extremely confident of having another four years in office.”

That was followed up by Zorn printing Ten Question for Karen Lewis written by the teacher union-bashing Democrats for Education Reform.

I was asked if the idea that Karen Lewis could win wasn’t just some more magical thinking on the part of Chicago’s progressive activists? A kind of self-delusion among Chicago progressives.

This is a good question.

The thing is I believe in magical thinking. And perfect storms. If it is combined with good organization and hard work.

I was a delegate to the NEA Representative Assembly two weeks ago in Denver. I was talking to another retiree who was volunteering to work the Assembly. When a voice vote was called on a New Business Item I supported, I stopped our conversation to yell “aye.” And lost. The guy I was talking to laughed and pointed out that I didn’t win many votes.

“Nobody ever went to heaven because they won a lot of votes,” I said. Laughing, because I have no anticipation of going to heaven anyway.

The truth is that I have won some political victories over the years.

Chicago has a wealth of perfect storms.

Jane Byrne.

Who thought Harold would win when he first announced? That he could beat the Daley Machine?

Please!

Who thought Will Guzzardi would win two years ago? That Jay Travis would come within 400 votes of beating Christian Mitchell?

What the cynics among the local pundits forget is how many times magical thinking and perfect storms – combined with hard work – have occurred in this City.

There is a strong progressive base. There is a strong dislike of the current mayor.

That is a winning coalition.

If we organize it.

Magical thinking.

Perfect storms.

And remember what Harold said.

Politics ain’t bean bag.

We have to organize it.

Romney wants us to to talk about inequality in quiet rooms.

The other day I was sitting through a school staff meeting. It was terrible.

Under our current administration, each meeting seems worse than the last.

Pointless. A checklist of what counts as poor professional practice.

We sat through two consecutive 20 minute power point presentations that had no context, no connection to each other or to any real needs we had. The sound on the last one didn’t work, so every bullet point was read to us.

At the conclusion, the Type 75 asked if there were any questions. I raised my hand and said, “I have a question. Do you think that none of us can read?”

She looked at me and said, “I don’t think I will respond to that,” as if I were a rude child.

Which brings me to an exchange between NBC’s Matt Lauer and Mitt Romney from the Tribune’s Eric Zorn’s blog:

HOST MATT LAUER: When you said that we already have a leader who divides us with the bitter politics of envy, I’m curious about the word envy. Do you suggest that anyone who questions the policies and practices of Wall Street and financial institutions, anyone who has questions about the distribution of wealth and power in this country, is envious? Is it about jealousy, or is it about fairness? 

 MITT ROMNEY: You know, I think it’s about envy. I think it’s about class warfare. I think when you have a president encouraging the idea of dividing America based on 99 percent versus one percent, and those people who’ve been most successful will be in the one percent, you’ve opened up a wave of approach in this country which is entirely inconsistent with the concept of one nation under God. And the American people, I believe in the final analysis, will reject it. 

 LAUER: Are there no fair questions about the distribution of wealth without it being seen as envy, though? 

 ROMNEY: You know I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made this part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it’ll fail.

These days, the most important thing seems to be that we should be polite.

Don’t complain when professional teachers are treated with contempt.

Don’t bring up income inequality except in quiet rooms.

Keep your voices down. Shhh. Be polite.

Three over coffee.

Summer thunderstorms rolled through last night. The sound of the thunder had to compete with the band playing at a party across the alley.

No problem. Windows got closed. AC got turned on.

You really can’t complain about a summer party on a Friday night. And storms do what they do.

I was thinking about the difference between Cambridge, Mass. and Logan Square. In Cambridge, the police actually show up when there’s a report of a burglary.

Professor Gates joins The Club.

I remember back in the early days of the fight for women’s reproductive rights. Suddenly, a number of high profile women came out and told of their harrowing experiences with abortions or unwanted pregnancies

One of the results of the Henry Louis Gates incident is that the internet in now full of the stories of high profile black men and their experiences with what NY Times columnist Charles Blow calls being in The Club.

My own induction into the “club” came when I was an 18-year-old college freshman. I was in a car with my friend Andre. We were young black men in a mostly white section of the mostly white town in Louisiana, about three miles from the college town where we lived.

How close were we to soldiers knocking down doors in your city or town and arresting people? This close.

The NY Times is reporting that the Bush administration was this close to using the Army as a policy to arrest people in the US, in their homes, without due process.

Top Bush administration officials in 2002 debated testing the Constitution by sending American troops into the suburbs of Buffalo to arrest a group of men suspected of plotting with Al Qaeda, according to former administration officials.

Tribune columnist Eric Zorn writes a column about Skip Gates to explain why he’s not writing a column about Skip Gates.

For those of you outside of Chicago, Eric Zorn‘s name probably means nothing. He’s a Chicago Trib columnist. But he exemplifies why the analog press is dying.

Today, for example, he writes an entire column speculating on the Henry Louis Gates incident, to explain why he’s staying out of it.

I could pile more guesses on top of guesses and try to peer into the hearts of the main players in this unfortunate drama — I’m sure most of us have — but I’ll leave that to those who are sure they know what happened here and sure they know what it means.

I’m doing what Obama should have done. I’m staying out of it.