Thursday, July 23, 2015

A Suit Saves 700,000 Impoverished Children in Cook County from Rauner


A decision handed down today by Illinois Judge Joan Lefkow makes even a hardened, cynical political observer hope in the power of a compassionate humanity.  

Lefkow’s order to the state’s Department of Healthcare and Family Services was for Illinois to make the necessary payments to the nearly 20 safety-net hospitals in Cook County which handle the disproportionate overload of Medicaid patients – especially children.

700,000 children.

The payments had been stalled or rendered unlikely due to the current budget impasse in Springfield.  Today’s court order follows an earlier decision from the bench requiring the Rauner administration to pay state workers in full during the fiscal stalemate. And a previous decision had been delivered ordering the Rauner administration to fund foster care operations, which were also identified as probable victims of the budget gridlock. 

In all cases, payments will come inescapably from the General Revenue Fund, where the “money is available,” according to Judge Lefkow, a magistrate of the Northern District 

The Sargent Shriver National Center on Poverty Law brought suit against the Department of Healthcare and Family Services, identifying past court orders, previous consent decrees, and federal mandates that guaranteed funding for services to aid the State of Illinois in reimbursing hospitals for medical assistance provided to the poor. 

Hospital CEO Timothy Egan of Roseland Community Hospital on the far south side explained that his institution was readying to close down in about a week prior to today’s decision.  Other hospitals were considering reduced services, lay-offs, or even the elimination of ambulance services.  

John Hoffman, spokesperson for Illinois’ Department of Healthcare and Family Services, who earlier opined that predicted increases in state Medicaid costs suggested how necessary it was for the state to get its “reckless” spending under control, now announced that the Department was reviewing the court order, one the Department believed was an incorrect interpretation of the original consent decree. 

The Shriver Center is considering an additional suit to increase the court decree beyond the boundaries of Cook County, unless Rauner is willing voluntarily to consider needs beyond the parameters of the original decision.  The Illinois Hospital Association Chief Government Relations Officer, A. J. Wilhlmi, encouraged the Governor to reimburse the entire state safety-net system, not just one county. 

Senate Leader John Cullerton reminded the Governor, who had earlier described Cullerton as an ally in his eventual creation of a budget solution, “if court mandates keep piling up and no spending plan is approved, Illinois state government faces a $4 billion deficit.  The governor’s office did not dispute that figure”

A recent sobering report by the Annie E. Casey Foundation reiterated the need for immediate support for the lowest income workers and especially their children.  The report, entitled Kids Count, looked carefully at the effects of the Great Recession of 2007-2009, the economic recovery of the disaster, and the current fiscal health of families relative to economic class prior and after the upturn.

“After numerous years of depressing economic news. Many positive trends signal that the economy is finally recovering from the deep recession…Nonetheless, there are warning signs that the recovery may be leaving the lowest income families behind, disproportionately affecting workers of color and their children…When very young children experience poverty, particularly if that poverty is deep and persistent, they are at high risk of encountering difficulties later in life – having poor adolescent health, becoming teen mothers, dropping out of school and facing poor employment outcomes.”

700,000 children in Cook County.

At the turn of this last year, the Pew Research Center found the gap between middle income and upper income families after the Great Recession is the widest ever recorded. 

Measuring total family wealth, PEW found that middle-income families in the 1990’s had accrued a median family wealth of nearly $94,000.  Now after the Recession, they had climbed back to a median average of $96,500.

Upper income families, on the other hand, had a median accumulated wealth of $338,500 in the 90’s, and a median total wealth of $639,400 in 2013.  Nearly doubling the overall financial cushion. 

But for the lowest income earners, the Great Recession was a brutal tsunami of fiscal disaster, one that left them on a far lower rung of the economic ladder than even before the Great Recession.  In the 1990’s, a low-income median family held a total worth of nearly $14,000; now after the Recession, a reduced total fiscal value of only $9,000. 

The Federal baseline earnings to qualify as "in poverty" in a four member family is $24, 250.

In Illinois, the threshold for Medicaid eligibility for children is now (under the Affordable Care Act) set at 147% of the Federal Poverty Guidelines: that is, 1.47 times $24,250 for a four-member family.

Thus, in Illinois, two parents and two children earning less than $36,375 become eligible for Medicaid assistance.

For a single mother with one child, that determination is approximately $23,000.

For a single mother with two children, the number increases to approximately $30,135.

Various research findings within the Annie E. Casey Kids Count study provide startling information about the possible benefits of governmental fiscal intervention for children in low-income or impoverished families.  "One study found that for families with annual incomes below $25,000, providing them with an additional $3000 during a child's preschool years was associated with a 17 percent increase in their earnings as an adult."

In Illinois, the majority of the poor population covered by Medicaid assistance are children: 57%.  On the other hand, those same children account for only around 26% of the costs of Medicaid, while the greater portion of medical costs remains used by the disabled and the elderly. In other words, children in poverty are the largest neediest recipient of assistance - over half, but the costs fall around 25% of all expenses. ( Medicaid Explained: How It Works & Why It’s So Important |

After Judge Lefkow's ruling, the families and parents of the 700,000 children that fall under these numbers in Cook County alone can seek employment and work knowing they have at least some financial protection against the risk of medical expenses.

It's a heartless world, and neither the Great Recession nor Illinois Governor Rauner's budget battle has helped. 

“In 2013, one of four children, 18.7 million, lived in a low-income working family in the United States.  This is 1.7 million more than in 2008.  And 27 percent of children in low-income working families are younger than age 6” (Kids Count).

Bless you, Judge Lefkow.

Monday, July 20, 2015

Dubious Research, Double Dog Dares, and Debbie Downers: Some Media's Love Affair with Rauner

Dubious Research, Double Dog Dares and Debbie Downers: Some Media's Love Affair with Rauner:

I read with no small measure of amusement the Chicago Tribune’s recent sneering editorial “A dare to Madigan,” calling out the Speaker: ” So what’s Madigan got?  Looks like nothing.”   Or, was that “nothin’?”

The Speaker, once the darling of the same editorial board’s acclamations in 2013 for his masterful (yet unconstitutional) approach to doing the Tribune’s bidding; that is, masterminding the passage of SB1 and the reneging of benefits promised to public workers and retirees in Illinois, has now become the media’s vilified antagonist. 

Before:  “Madigan acknowledged during debate that his bill is not salvation…but it hurtles the ball forward.  That is worth celebrating...” Then, listing Michael Madigan as one of those great politicians who would not accept the status quo of unpaid bills and tax increases, the Trib gushed: “Please accept our applause.”

Now:  “The speaker looks like he has nothing.”

How time changes all. 

Well, all except the Tribune Editorial Board. 

The Tribune editorial board may be vacillating in their political favorites, but we can depend on consistency in their mission to maintain Illinois’ flat tax, avoid any progressive concepts in taxing services, undermine collective bargaining, privatize public education, and use whatever ink it takes to promote that plutocratic agenda. 

And, if that takes some fudging of information or some old-fashioned disaster mongering, so be it.

“If people needed yet another reminder of the Illinois disaster; it came in a new study this week.  The Mercatus Center, a public policy research group, examined the financial outlook for state governments in all 50 states – and ranked Illinois dead last.”   (Chicago Tribune, July 9, 2015)   

The Mercatus Center?

According to Sourcewatch, the Mercatus Center was founded and is funded by the Koch Family Foundations.  Moreover, the Mercatus Center is involved in ALEC’s tax and fiscal policy task force.  “The Wall Street Journal has called the Mercatus Center “the most important think tank you’ve never heard of” (

Why would the Trib use that dubious source? Other more reputable researchers don't quite see it the way ALEC does.

Business Insider just ranked Illinois #12 out of all 50 states – well ahead of Indiana and Wisconsin. 

Kiplinger just ranked Illinois’ future financial outlook as in the middle of the pack, beating out 14 other states (including Indiana).

Maybe much of the economic outlooks are not only clouded by but also wrought with the political position of the analyst.  Take for example ALEC researcher Laffer’s Rich States, Poor States study.  Illinois falls far, far down the hierarchy for positive economic outlook (approximately 40); he also rates many of the most underperforming and lower producing economies (southern states) as potentially powerhouses in the next year.  In fact, many of the right-to-work and non-union areas of the country which frustrate any comparison with the kind of opportunities in Illinois are characterized as better or promising.   

Here’s another case in point.  Crain’s recently reported findings from the U.S. Bureau of Labor Statistics that Illinois has surpassed 48 other states in recent measurements of job creation.  In fact, Crain’s opened with the line, “So much for the job killer rep.”  Much of the movement was in high-tech start-ups, and much of that fuel was attributed to the post-secondary educational advantages within the state.
Speaker Madigan sent that information around in a quick note to the Illinois House members, a noteworthy fly in the Governor's shrill ointment of economic doom in the Turnaround Agenda. 

The Illinois Policy Institute was quick to attack the “good news,” identifying the report as lacking in fullness and too short on bad news.  Ardent supporter of Governor Rauner and the Turnaround Agenda, the IPI offered another series of takes on the US BLS report to dull the shine.  They even went so far as to find some research on the largest 340 counties in the nation, and selected three from Illinois that placed extremely low. 

No good news for you!

By the way, those same three counties, when compared to the over 3100 counties across the nation, do quite well and much better than most of the counties in states where ALEC says we can expect the next fiscal parousia.
The Times research looked at the quality of life in every county across the nation, and their information included life expectancy, average wage, employment numbers, obesity, education levels, etc.

Illinois’ fiscal crisis, to quote a learned Supreme Court Judge, is "one of its own making."  And as long as the Tribune, the IPI, or the new Governor can work to convince us that the fiscal sky is falling, the creditors are at the gates, or the vulnerable and marginalized are victims of Madigan; they can keep us headed in the direction they have always wanted:

Never a progressive income tax.
Never a reasonable tax on services.
Never a minimal transaction tax.
Never collective bargaining.
Never eliminate tax edge credits for corporations.
Never eliminate tax loopholes like TIFs.
Never amortize the ridiculous ramp of payments back to the pension funds.  

Instead, taking his cue from the Tribune, our new Governor has rolled out an “improved” pension reform outline to capture back the $2 billion he had counted on before the ILSC decision of May 2015. 

Unencumbered by precedent or legality, Rauner has directed his Republican leadership to put forward his new “plan” for pension reform.  House Leader and Representative Durkin has stated that he will sponsor and draft new legislation to do just that; and he will offer the Democrats a chance to join on to this measure.

In case you missed it Speaker, that’s a double dog dare from the Governor. 

And Rauner thinks he has “somethin.”

Saturday, July 4, 2015

Active Tier I Teachers and Tier I Retirees! Join IRTA NOW!

"We can make pension changes to those still working, right?"

Three years or so before my retirement from teaching, a very good friend and young colleague complained to me about the distraction the upcoming departures had on the too many of my elder companions leaving so soon.

“I’m really tired of hearing all of you trying to figure the square of the hypotenuse of the percentage of income when you all leave,” she muttered.  “There should be something better to do with an educated mind.”

She was right, of course. An advisor with the state office for the Teachers Association was the person with all the answers, and only a phone call away.  And, ironically, she was only a year or so behind me in the pipeline to retirement.

And, even though calculating accurate numerical numbers in the English Department was an unlikely prospect, an educated mind should be able to see the future a bit more clearly than just a monetary number.

If I knew what I now know, I believe I could have made a very strong and educated  commitment to do at least one thing: join the Illinois Retired Teachers Association even years before I retired.

Let me explain why. 

For as long as anyone can remember, the State of Illinois has reneged on its duty to pay into the pension funds of its State workers.  In the last half century, Illinois has also avoided the “promises” to fully pay into the pension funds that are protected by Article XIII, section 5: ”Membership in any pension or retirement system in the State…shall be an enforceable contractual relationship…the benefits of which shall not be diminished or impaired.”   Even though it would seem an a priori argument to require appropriate payment, the General Assembly continued to shirk the expectation for decades long after the inclusion of the Pension Protection Clause in 1970.

The Illinois General Assembly – a bi-partisan collection of legislators – has always dodged and sidestepped every opportunity or request or demand to provide the appropriate amount to the pensions, and it is likely they will do so again – regardless of the Illinois Supreme Court’s unanimous decision striking down SB1. 

"They can choose a 401K as a better alternative."
This is not opinion – it is both history and what State leadership is saying at this moment.

In 1995, acting as if the General Assembly had suddenly come to an epiphany regarding the money owed ($17 Billion at the time), legislators decided to create a “ramp” to make sure they were held to the payments necessary.  The “ramp” was designed to allow for minor payments in the beginning and finally swept upward in impossible costs by the end of the “pay-back” in 2035.  In truth, the ramp provided them with an ability to forestall full payments until many years later.  The Committee of Government Forecasting and Accountability found that from 1985 until 2012, Illinois pension liabilities grew by over $87 Billion.  More than half of that increase came from the State’s not paying its share.  That is why – despite the hue and cry from the Tribune and other corporatist enemies of all things pensions – that they now face an unfunded liability of well over $100 Billion. 

On April 14, 2010, in less than 24 hours both chambers of the General Assembly created a Tier II to absorb the costs of the growing unfunded liability.  Retirement age without penalty was extended until age 67, Cost of Living benefits were eviscerated, and retirement benefits were capped despite continued high salary contributions to the pension systems.  In short, Tier 2 was designed to help and ultimately pay off the liability accrued by the General Assembly.  

In December of 2013, the General Assembly passed SB1, a bi-partisan bill designed to curtail the benefits of current retirees and all Tier I active teachers.  The law provided a severely reduced schedule for Cost of Living, figured a salary cap for active Tier I teachers, offered defined contribution plans for current employees, prohibited sick leave accruals, and supplied a statutory promise of payments from then on into the pension funds.  Legislators Rep. Nekritz and Sen. Raoul predicted a savings for the state (in the previous bill owed) of hundreds of $Billions. 

"I think we can find a choice like Sen. Cullerton had - with SB2404."

IRTA lawyers were leaders in the battle to overturn SB1 as unconstitutional, and they were successful.  Indeed, even a somewhat contrite Representative Nekritz confirmed the admonishing tone of the Court’s unanimous decision during a recent interview.  President of the IRTA Bob Pinkerton exclaims, “Special thanks to Tabet, DiVito, and Rothstein for leading the battle in court. The IRTA attorneys were the leaders among all the attorneys involved and made an outstanding presentation to the Supreme Court.”

On the other hand, current leader of the State Governor Rauner has indicated his wish to return to a plan much like the proposal offered by Senator Cullerton in 2013 as an alternative to SB1:  A bill that provides a specious form of “consideration,” like Cullerton’s original SB2404 which provided a choice for health care or a cost of living benefit.   In Rauner’s vision, he would offer an opportunity for Tier I employees to join a defined contribution (401K) or remain in a reduced benefit pension plan.  According to his mouthpiece Tribune, Rauner believes that there is still the possibility that we can move forward from where we are “with Tier I as well as Tier II and possible III, to develop an optional (or required) 401K system for teachers.” 

Our new Governor, who is not much of a reader, has evidently not perused the recent decision by the ILSC declaring SB1 not only illegal in its attempt to recoup money that should have been given to the pension funds, but also affirming the Pension Protection Clause for even active Tier I teachers currently in the classroom.

From page 20 of the Supreme Court Decision/Analysis section of the majority opinion delivered by Justice Karmeier.  “The protections afforded to such benefits by article IIII, section 5 attach once an individual first embarks upon employment in am position covered by a public retirement system, not when the employee ultimately retires…Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the pension benefits conferred by membership in the retirement system cannot be applied to that individual…”

Despite the recent Supreme Court decision on SB1, Rauner believes that retirement benefits are set and remain static after initial employment.  

"You get what you get the day you start, not at the end. Right?"
And the General Assembly?  Have they learned any lesson?  Will they seek new revenue streams like progressive taxes, services taxation, transaction fees, amortization of the unfunded liability, re-design of State bill paying operations, etc.?  Or will they once again allow a mob mentality – like those that brought us SB7, Tier 2, SB1 – to elude the responsible path? 

This last battle cost us all in IRTA over $1/2 million. 

NOTE:  Active Tier I Teacher, these continued efforts to diminish and impair your future hard-earned retirement income will not cease.  You need protection from an organization that will not waver in their defense of your earned benefits.  Join IRTA now.

NOTE: Retired Tier I Teacher, this year the US Supreme Court will hear a case for those who wish the benefits of collective bargaining without having to pay for such advocacy.  Have you paid forward your share for yourself and for those about to retire?