Prescience: Looking for Answers in Illinois
Had the real purpose
of SB1 been to show how disconnected forced diminishment of workers’
compensation was to Illinois’s fiscal problems, it couldn’t have been more
successful.
A week-old report by the Fiscal Futures Project at the University
of Illinois points out glaring contradictions to the lustrous predictions
handed out by supporters in both houses and drafters like Rep. Elaine Nekritz
(Northbrook) and Sen. Daniel Biss (Skokie). The report warns that not much if
anything will be fiscally ameliorated by the passage of SB1, even if courts later
allow its dubious constitutionality.
In December, Representative Nekritz promoted SB1’s savings
of $187 billion over the next 30 years, including knocking off an estimated $21
billion of Illinois’ unfunded pension liabilities. She indicated SB1 cold save the state as much
as $1.9 billion by 2015. Exceptional
promises. But her comments dispute the
recent study by U of I’s Fiscal Projects Futures Project team of Dye, Hudspeth,
and Merriman. (http://rogersanders.tumblr.com/post/51692621955/action-on-pension-reform-imminent)
Senator Daniel Biss of Skokie was a bit more circumspect and
politically shrewd in his choice of words to endorse SB1. “SB1 saves a significant enough (my italics) amount of money to stabilize the state’s finances while protecting current retirees, those who rely on small pensions and those
who have worked longest” (http://senatorbiss.com/index.php/component/content/article/1-latest-news/127-update-pension-reform).
In other words, if teaching were not the primary earners’
profession, your secondary income would be hurt less drastically like, well,
let’s say any other hamburger flipper.
Those of you with two or more Masters, Doctorates, specialties, extra
work and stipends – you need to rethink your commitments and efforts, Mister!
Senator Biss also lionized the inclusion of a commitment to
move to a “responsible funding schedule.”
This was an historical first, according to the Senator. Really?
Funding to eliminate your debt to the pensions? Nope.
In disagreement, the Fiscal Futures Project sees the SB1 budgetary
outcome differently, very differently.
The income savings hoped for and predicted by advocates Biss and Nekrtiz
in December will not be likely to appear.
In fact, according to the report, there is likely to be a shortfall of
$3 billion by year 2015, increasing to $15 billion by 2025.
Adding salt to this economic wound is the project’s further
prediction that significant deficits will occur even if the current increases
in income tax rates continue past 2015, when they are scheduled to fade
away. How bad? One billion dollars in 2014 and $5 billion by
2025. (http://igpa.uillinois.edu/system/files/Pension-Reform-Will-Not-Fix-Deficit.pdf)
How can this recent report be so at odds with the glowing
promises of those who prepared the bill, those like Senator Biss and
Representative Nekritz?
On July 3, 2013, delegates from the Center for Tax and Budget
Accountability came before the Pension Conference Committee to provide oral
testimony regarding the potentiality of “pension reform” and fiscal issues
facing the State of Illinois. Besides
warning that SB1 would NOT
accomplish the remedy to the state’s budgetary woes, the CTBA warned that other
fiscally corrosive factors would continue to negate the General Assembly’s
shortsighted attempts to correct a very long-standing problem.
They warned, “It is primarily this borrowing – and more
specifically the amortization schedule passed into law in FY 1995 that
delineates how it is to be repaid – that is straining state resources today. Over 80% of the payment by the General Fund
to the pension(s) contribution is for
debt service (http://www.ctbaonline.org/sites/default/files/reports/ctba.limeredstaging.com/node/add/repository-report/1386537800/T_2013.07.03_CTBA
Pension Committee Testimony.pdf).
“The debt service therefore is the driver of the fiscal
problems generated by the unfunded liability.
Because of the 1995 “Ramp-Up, the entire $1.08 billion in year-to-year
increase in the state’s General Fund pension contribution called for in FY 2014
is caused by debt service (the Ramp), not the cost of benefits earned.”
SB1 was never about
what workers earn or earned.
As much as politicians like Senator Biss determine what
workers are acceptable earners and which are not; as much as Representative
Nekritz wants to play with numbers and overlook those who worked their entire
lives giving the state of Illinois their professional commitment – it was
always about what had been stolen to begin with. About not keeping promises then…and now. And so huge, so very immense was the amount
diverted from those who were owed; the only thing to do was to identify them
(the workers) as the problem. To make
them bear the pain and pay the state’s thievery.
But now we know that even SB1 is not enough to cover the
crime – even if the arrogant/Madigan-inspired law were to be upheld. Now we are finding out that it is not the
workers at all. It was the theft, then
the 1995 Ramp, and the continual structural revenue deficit in Illinois.
Let’s start talking about fixing that.
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