Teachers Retirement System: Reality Check.

Augmenting the dismissal by the Illinois Supreme Court (4-3) of the Citizen Initiative to Redistricting, Governor Rauner is about to face another serious financial setback. 

From the IRTA: “The board that oversees the Teachers Retirement System voted today 9-0 to lower the expected rate of return on investments from 7.5 percent to 7 percent.”  

As a result, the expense to the state of Illinois for the forthcoming budget year will be palpable. 

According to the Governor (as in in 2015), this decision will result in the curtailing and lessening of “services to people in Illinois.” 

Those of us who have worked in such services – assistance for the poor, MAP Grants, medical assistance for the indigent and seniors, programs by various food delivery and assistance, food banks, autism succor, family support, dependent children support, Lutheran Services, Peoples’ Actions to Assist in Delivering Housing Assistance, etc. – and many more, have experienced this cruel message before. 

“There may be some pain,” according to the newly elected Governor Rauner.  In other words, you all get less until I get my way.  And as you have no advocates there will be no arguments to bother me. 

Now, after a year of eking by on less, you get even more "less." 

“The Governor appointed three new members to the board this morning to fill previous vacancies.  However, one of those members withdrew his nomination because of residency issues and the other two newly appointed members abstained from the vote. This alteration will mean the state of Illinois will have to pay TRS and additional $421 million in the coming fiscal year. When the board last altered the assumption from 8 percent to 7.5 percent in 2014, the state ended up on the hook for an additional $200 million in pension payments. We expect there will be a question over the legality of this vote because prior to today’s meeting, the issue was not posted correctly on the agenda 48 hours prior to the meeting as is required by the state of Illinois Open Meetings Act. If further action is taken the IRTA will send out additional updates.”

https://www.irtaonline.org/Default.aspx

Recall, if you will, that the $111 billion shortfall in the pension funding has little if anything to do with the teachers who paid fully into the funding for the last half century.  It is instead the result of the parade of sleazy Governors who diverted matching payments in order to make themselves look good and provide services without having to request tax increases.  Ironically, if Rauner's quickly appointed members to the TRS Board had been influential in stead of wisely abstaining on the issue of lowering the expected rate, the Governor would have entered the regalia of previous political leaders who also avoided making necessary payments.  

"Unforeseen and unknown automatic cost increases will have a devastating impact on the state's ability to provide adequate resources to social service programs and education," Michael Mahoney stated in a memo sent Monday to Rauner's chief of staff. He also called the lack of public discussion ahead of Friday's vote "troubling."

Not a problem for Rauner, but a clear warning for the 400,000 TRS members that those who will indeed suffer the unconnected consequences of Illinois’ mismanaged and structural deficit will once agin be the marginalized. 

Remember that poor kid in class that you protected?  The governor could care less for him or her. 

Willin' to capitulate yet? 

So, how do we pay back what we owe in Illinois?

We don’t.  Not yet.

Instead, the business-man Governor and his team have decided to thwart payments to those already owed by forcing an apprehensive General Assembly to redouble their attempts to reduce pension payments despite the May, 2015, unanimous scolding of the Illinois Supreme Court to “stop and desist” from avoiding fixing your own self-made problem.

And the Court likewise alluded to the inclusion of contractual benefits for Tier One teachers at the instant of their working career. 

Warning: Welcome to Tier Four you new Illinois teachers in 20XX?

Other forms of revenue enhancement to be shared by all of us in Illinois (including those of us retired teachers) remain discarded on the side table: a graduated income tax, service taxes, transaction taxes, retirement taxation, etc.

Instead, the business-savvy Governor will hold firm on his business-friendly Turnabout Agenda – or else no tax increase or budget - and we will limp on, ignoring those marginalized and extremely uncomfortable mendicants who embarrass us on street corners, or sleep under highway bridges, and quietly inhabit the depths of our forest preserves.