A Bitter Pill: Illinois Supreme Court Decision and Chicago Corporate Media

A Bitter Pill: Illinois Supreme Court Decision and Chicago Corporate Media

Bitter Pill is an idiom that arises from usage nearly a century ago or in some lexicons even earlier.  Imagine a time when medicine was less than palatable or manageable, and you have a start.  Later on, during the malaria infestations of the Panama Canal  (1880 – 1920) project, “bitter” became the operative adjective.    “Bark of the cinchona tree was effective in fighting malaria, but the quinine it contained was extremely bitter. Since medications weren't coated, cinchona pellets caused any disagreeable thing to be termed a bitter pill to swallow”  (http://www.weirdfacts.com/Origin-of-Phrases-B/bitter-pill-to-swallow.html - ixzz38im70gX7) .  Thus, we have the term “bitter pill” for any unpleasant fact that perforce must be accepted. 

And, let’s be honest, the recent blitz-ink of the editorial members of the Chicago Tribune and the Chicago Sun-Times on July 25^th indicate their chiefs’ directions to criticize the recent Illinois Supreme Court findings in Kanerva v. Weems that “we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of funding to pay for them.”

In the Tribune, Jon McCarron blamed an expansive group of people for the probable failure of SB1 given the recent ISC decision for benefits: “eligibility for all of the benefits is limited to, conditioned upon, and flows directly from membership in one of the State’s various public pension systems.  Giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections.” 

In McCarron’s opine, the fault lies in Madigan, the Commercial Club, and - in a brief moment – the media.  Of course as SB1 competed with SB2404, the Tribune was quick in their editorial board to oppose any lesser package of pension theft than SB1; but now this member/writer of opinion pieces of the board seems confused by not only who is to blame, but what to do next.  “So, where do we go from here?”

So, McCarron suggests in his title that we all need to return to the “Drawing Board.”  But we all need to remember that the Tribune and other corporate media has never really looked at anything resembling a real answer to two items in order to reduce the pension obligations the State of Illinois owes now and will always owe to those from which it diverted (stole) required money for retirement. 

Using a literary puppet like I use Ernesto or Klonsky uses Tony at the Red Line Tap, McCarron suggests his good friend Cullerton proposes that the COLA would be scaled back for current workers unless they agree to no longer receiving raises while they work in the public sector.

Are you serious?

Even local graduates – superb graduates – in education would flee the state for real professions in other intelligent climes. 

If not that, McCarron suggests “savants might seek instead a constitutional amendment that removes the pension protection clause.”  McCarron does imply there would be difficulty due to numbers needed (3/5^th vote by both legislative chambers and a 60% approval of those voting).   Ignoring thornier issues, McCarron does not ponder problems of ex post facto, bills of attainder, or grandfathering of the current retirees -  not to mention the status of those who are stopped where they currently reside in earnings.  Oops, not to mention those who would file suit for a currently un-provided Social Security.

An IEA friend wrote to me that he found little to cringe about in McCarron’s piece.  Really?  I imagine if you read the title of the piece, things seem better; but the ideas offered in the second column assure me that McCarron and the Tribune are still trying to find an ultimate/negative solution to the pensions, not a actual way out.

The way out is to accept that Illinois has two issues: a revenue problem and a huge debt from years of not servicing their pension obligations.  (See answers below?)

The same issue of the Tribune has a younger editorial member, Kristen McQueary, manufacturing a more energetic if not hysterical titular piece: “The terrible-no-good-very-bad ruling.”   It would seem McQueary has even less acceptance of the court’s pill than McCarron. 

McQueary’s galvanic argument is certainly more heated than McCarron’s, but it plays upon false concepts that even McCarron denounces in his own piece.  McQueary believe that the “law (SB1) did not impair the pension system – it strengthened it.’  This of course flies in the face of the McCarron argument that it was a “go-for-broke plan…”

Moreover, it is the Court’s language reinforcement of the “diminishment and impair” clause that really provokes her ire.

Point in fact. The language of the Court is what pensioners have been arguing for nearly half a century, and what Green and Kinney placed into the Constitution of the State of Illinois in 1970 because they feared exactly what has happened would happen. 

Anyone perusing bloggers and picking even snippets of Eric Madair’s warnings to the General Assembly would be aware of this.  What does the Editorial Board at the Tribune do?    The State of Illinois has reneged/diverted/Ignored, stolen (you choose) the money needed to meet the normal costs of pensions for nearly 70 years.  Governors like James Thompson have boasted that they were able to accomplish myriad services for people without having to raid taxes, but did so by taking from the pension obligations.

Now, given a deficit of nearly $100 billion, the State is trying to find some way to shift the burden on the backs of those who worked for the state, and McQueary and McBarron would have ALL OF US believe that normal costs are the problem.

In actuality, normal costs have been dropping each year (and that includes the COLA costs).

The Tribune and the Sun-Times have no answers – only attitude.  They dislike pensions, and the workers who have them.  Because corporate America has no longer any promise of a future in retirement, and because money is to be made in 401 k’s by investment schemers, because they envy the loss of their own earlier financial possibilities; they want pensions abolished – and they will blame the pensioners, not the true causes.

Politicians, like most professional opportunists will utilize this position for their own gain. 

What we do not see, will never see, from the Tribune or the Sun Times, is actual policy to correct the problems in revenue and the enormous debt that the State of Illinois has created for itself.  That would take forethought and that would require authentic research and thoughtful journalism. 

Note: the $100 billion owed to the pension system will not be alleviated by any law or quick fix:  like a bad debt, it must be paid.

McQueary believes that union leaders “signed off on allowing the state to skip pension payments into their members’ funds.”  Really?  Why were there several suits to force the State of Illinois to pay their fair share?  Look it up.

McQueary also boasts that the money was used for “paying schools, nursing homes, public safety and other services unions claim to support…”  Really?  Wouldn’t those be costs we would all share beyond our normal payment into funds for public workers?  Why steal it from one group to pay…

True Facts:

(1)   That debt of $100 billion is NOT going away.  Instead of chaining yourself to a ridiculous scheme to make payments in a ballooning manner (1995), the State needs to amortize the debt to plan for future needs – not be at the beck and call of annual crises.

(2)    The State has limited revenue because it operates in an antiquated fashion, using a flat tax and loopholes to achieve limited funds and corporate favoritism.  This needs to change.

McCarron and McQueary may tell you and me that unions “thrive on scaring their members…,” but it’s the Tribune and Sun-Times who want us all to act without thinking.  Hopefully, the Illinois Supreme Court will act while thinking.  That’s what really scares them.

McCarron:http://www.chicagotribune.com/news/opinion/commentary/ct-john-cullerton-pension-reform-illinois-perspec--20140725,0,4588893.story

McQueary: http://www.chicagotribune.com/news/opinion/commentary/ct-mcqueary-perspec-0725-20140725,0,3347980.story

A Letter From the Inside: "Will You Join Me?"

Letters From the Inside: Thank you, Mr. Ratto.

In the last few months, I have had the opportunity and pleasure to have some time to converse with active teachers who remain in the classroom trying to construct great lessons for children while being subjected to an often threatening and reductionist matrix by forces cascading down from well outside the school or even the district in which they teach.  I provide here an echo of the voices and feelings I have perceived in our casual meetings.

What follows is an interesting blog piece from R.L. Ratto, an elementary teacher in New York who blogs on personal reactions to his active and daily  work as a teacher.  The Washington Post, Diane Ravitch, and others carry his blog from time to time.  I highly recommend your looking at his insights and staying in touch with what our actives are enduring.

http://rlratto.wordpress.com/

H/T: K. Hester

“Time to reflect..but not for long

“As I sit in my backyard, contemplating another end to another school year, I am drawn to the thoughts of why does this year seem so different than others. In the past, I would often look at summer break as an opportunity to unwind, reflect, recharge, and prepare for the following year’s challenges. But, this year is different, much different. The distractions caused by education reformers, political agendas, corporate raiders, and social upheaval have taken a toll. It has taken a toll on me, on how I teach, and on my students.

“Education reformers have been successful in turning my classroom into some grand social experiment. We now march through a curriculum that is geared towards a Common Core test that is meant to evaluate teachers and administrators. Our vocabulary lists now include words most likely to be found on these tests and we are now told to assess our students against these one-size fits all standards. I have to test my students several times a year on an internet based program to determine their growth against students of their own ability. This is the true Race to The Top, as students are placed in categories and their growth scores are calculated to determine my effectiveness. They have turned our classrooms into assembly lines.

“My administrators visit my classroom almost daily with a clipboard and a  rubric used to again measure me. They look at my room and judge me on everything from what is on my walls to whether or not a kid may be daydreaming. I guess in today’s world, kids are not allowed to daydream, especially when an administrator happens by.

“Political agendas have also been successful in upending my teaching apple cart. Here in New York, we have Governor Cuomo, who proclaims himself to be the state’s only student advocate. He proudly proclaims his tax cap policy is good for the state while he funds his schools below 2009 levels. He seeks out tax breaks for millionaires while those of us in the classroom scramble to secure needed resources wherever we can. I have watched teachers lose their jobs all across the state as the concept of one person one vote has been thrown under the wheels of  his bus. This year we have seen the same Regents, that have approved the mess we are in, reappointed by our legislature. I have also personally felt the rage of my NYS Assemblywomen when I dared questioned her on vote.

“On a national level, I supported President Obama’s re-election and heard his State of the Union as he praised teachers and asked for less high stakes tests. Yet, his Secretary of Education has failed or refused to do anything about it. Now we have to defend against an attack on  a teacher’s right to due process, and  justify our earned pensions. I have watched schools closed in places like Chicago and teachers’ unions vilified for standing up for the students their members teach.

“Corporate raiders have begun the takeover of public education. They have discovered billions of dollars meant for educating the children of our nation can now be theirs. They have driven the Common Core, which in turn requires new resources, which they then sell. They have opened their own schools, often turning those with special needs away, as they rob the budgets of local districts. They have even taken over public facilities, driving public schools into corners of their own buildings.

“Social upheaval often is by design. We now have lock down and lock out drills in our schools. We often have to use valuable resources on security plans as we must now fortify our schools. All the while the gun lobbyists point at others every time another school shooting occurs. When a nation averages 1 school shooting a week and does not mobilize resources to change our mindset, one has to conclude this is by design. When a nation refuses to address poverty as the real reason some children do not succeed, it is by design. When one segment of our population fills our prisons and as a nation we do not direct our resources into those communities, it is by design. There is no other answer.

“So this year, I am ending my year by reflecting. There is no time to unwind. I need to recharge because our nation is at war. We are at war to protect our nation’s future, our children. Our public schools are needed, and I am not ready to be defeated by those who want to destroy and then steal our nation’s most important asset. Will you join me?”

Illinois Policy Institute By Any Other Name...

Illinois Policy Institute By Any Other Name Would Smell the Same

A writer for the Illinois Policy Institute tried her hand at analogies the other day.  Diana Sroka Rickert, whose article was directed at “solving the pension mess,” had some suggestions.  Of course as an IPI spokesperson, those recommendations involved privatization, 401K programs, and a scrapping of the firefighters Illinois pension code.

“In 1979, the original Sony Walkman was the newest way to listen to music. Switchboard operators still connected telephone calls.

That's also when the Illinois village of North Riverside signed its first contract with the firefighters' union.”  

I think you can see where this is headed, but if you’d like to see some over-stretched resemblances, here’s where to go:

http://articles.chicagotribune.com/2014-07-08/opinion/ct-pensions-north-20140708_1_firefighters-union-rank-and-file-firefighters-pension-mess

The Tribune enjoys the Illinois Policy Institute and most of the “think tank’s” conservative and oft tea-party proposals.  And, to be honest, there are many similarities in the Tribune’s conscious efforts to blame the pension shortfalls on the concept of a defined benefit to start with – that’s the basic credo for the IPI.  If you watch or read the two, you’ll often note the harmony in their themes.

John Tillman - Illinois Policy Institute

You may have seen Ms. Rickert on WTTW Chicago Tonight arguing against all things pensions when Ted Dabrowski or the John Tillman aren’t available.  She usually plays opposite Ralph Martire of the Center for Tax and Budget Accountability.  He provides numbers and information; like most IPI spokespeople, her mantra is “all pensions are wrong.” 

Now, she likens pensions to Sony Discmans.  This goes beyond simply saying pensions are bad.

Indeed, Rickert’s handling of the facts facing the good firemen and first responders in North Riverside is nearly as inventive as her creative comparisons in the opinion piece.   And, if she were to have her way (the IPI way), the citizens of North Riverside should consider another activity by night, rather than sleeping soundly.

Diana Sroka Rickert

Rickert claims “The union's most recent contract expired April 30.  The village of 6,700 faces a $1.9 million budget shortfall. Officials say $1.8 million is due to rising police and fire pension costs…It's a common scenario in Illinois.”

In actuality, the town’s politicians, including the Mayor, have put themselves in the cross hairs of the Illinois Department of Insurance, which oversees the required funding for village and Illinois pensions systems.  The real reason for the $1.8 million shortfall is due to their refusal to pay anything at all into the funds in the last six of twelve years. 

In Article 4 of the Illinois Pension Code (Firefighters’ Pension Fund  - Municipalities 500,000 and under), the city council of North Riverside is obliged to pay the 17.5% matched contribution to the downstate fund, “equal a sum sufficient to meet the annual actuarial requirements of the pension fund, as determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality.” [(40)  ILCS 5/4-118 Financing]

The city council of North Riverside chose not to contribute.

Understandably, the Illinois Department of Insurance wants to know WHY?

And, although Rickert takes aim at the Firefighters of North Riverside, it’s actually the shortfall in the police pensions of $1.1 million that greatly surpasses their $.7 million deficit in the payments that should have been made by the town to the downstate pension funds. 

If this is beginning to sound familiar, you’re not wrong.  The firefighters contribute 9.45% of each paycheck to the fund, the local politicians decide to take a holiday or refuse to pay their required share every other year, and the Illinois Policy Institute finds the pensions are the problem. 

Rickert’s solution: Privatize the fire department. 

“Beyond preserving all the firefighters' jobs and keeping intact the level of fire protection, the move also would save the village more than $3.5 million over the next five years. Most savings would come from firefighters banking what they've put into their pensions and earning new retirement benefits through a 401(k).”

That sounds simple.

On the other hand, Pat Devaney, president of the Associated Fire Fighters of Illinois was not impressed with Rickert’s or Mayor Hermanek’s suggestion, not to mention the Trib editorial board for putting such misinformation out there.  “The Tribune’s defense of suburban North Riverside’s bid to abolish its fire department in favor of a private, profit-incentive service steps way beyond the boundary of sensibility. Worse, your (editorial) advocates government malfeasance that borders on lawlessness.”(http://www.carrollcountytimes.com/topic/chi-letter-privatization-of-emergency-first-responders-is-dangerous-20140702,0,4036921,print.story)
And, really it does endorse an avoidance of responsibility toward the towns people's welfare..  

Let’s not forget that the lion’s share of the debt also originates in non-payment to the police downstate fund; therefore, would the IPI and Rickert suggest privatizing that as well?  Probably. 

And North Riverside already moved its ambulance service to a private company rather than the firefighters.  By the way, being a union member firefighter Emergency Medical Technician requires several certifications to provide safe, adequate service; the private company requires only one basic certification.

Sleepless in North Riverside, yet? 

Rickert laments, “It’s hard to put a price tag on the bravery and service provided by any fire department.”  But of course, she just did.  And even though this IPI writer would suggest that a 401K is a more up-to-date and streamlined version of the Sony Discman, a veritable IPod if you will – its what we call in the writing world a disconnected or noisy analogy/metaphor. 

Pensions were retirement savings program, an agreement to provide some comfort and safety for efforts and greater mastery of the job over the years.  It was a contractual exchange.   Conversely, the 401K was introduced as a supplementary savings program, one which could be controlled by the employee and managed for a cost by pricey fund managers.   According to Forbes, pension plans often beat 401(k) plans. "Since 1995, Towers Watson found, defined benefit plans outperformed by 76 basis points annually (0.76%). They(sic) did so in nearly all of those years except years in which stocks boomed, such as 2009…Part of the reason is mutual fund fees.  Mutual funds in the plans studied had weighted average expenses of 65 basis points in 2011, a drag which reduced overall returns by 31 basis points. Nearly half of the 401(k)-type plans were composed of mutual funds, compared to just 14% in the pension-style plans” (http://www.forbes.com/sites/mitchelltuchman/2013/06/04/pension-plans-beat-401k-savers-silly-heres-why/ ).

Some companies match employee 401K contributions to some levels, but not in the public arena.  In addition, the firefighters in North Riverside, like other public employees, are not entitled to Social Security; one more fly in the ointment for Rickert in her suggestion to simply jump to a 401K.  In addition, 14 of the 15 firefighters in North Riverside are vested; that is, they have spent more than a decade in service. 

In her conclusion, Rickert wags a warning, pedantic finger at the reader:  “But because new ideas and competition constantly are introduced, society changes. At some point, we upgrade the Walkman for the Discman for the iPod. We learn to be flexible and embrace innovation, because the way things were done 30 and 40 years ago might not be the best way to do them today.”

It’s only an upgrade?  Not if you're a responsible firefighter or police officer.  I'd have trouble sleeping in North Riverside if I lived there.   It would appear there's already a crime prevention problem.