Forecast by IRTA Leadership for Coming Months

No Winner

Forecasts by IRTA Leadership

October 12, 2016 

At a meeting of the WLSU of the IRTA in Countryside this morning, leaders of the Illinois Retired Teachers Association predicted we might prepare ourselves for much of the same in Springfield’s political stalemate as we move forward(?) after elections.

That’s not the good news, they agreed.

Described by IRTA President David Davison as a “political junkie,” Executive Director Jim Bachman was quick to describe his observations of the political scene on the national level as not so very fascinating as something quite else.   In addition, Mr. Bachman reminded us that what occurs on the national level has drifted downward on our own state level – an environment where discourse and compromise are sadly missing elements. 

The IRTA has now a membership of nearly 37,000 retired educators. 

The Mission Statement incudes the following: “The Association serves the needs and interests of its members through advocacy, education, cooperation and socialization in a flexible organizational structure.”

Part of that “serves the needs and interests” was evidenced in the Association’s hiring of the law firm of Gino DeVito to argue against the Madigan-supported SB1 in the Illinois Supreme Court, and the eventual unanimous decision striking down the attempted pension theft on May 8, 2015.

Although discourse in the capitol may be polemic, Bachman believed both sides of the aisle have finally had the time to digest or acquiesce to the undisputed decision by the ILSC that precludes their coming after retirees’ pension benefits. 

In his mind, this includes benefits like TRIP or TRAIL (health insurance plans) – also protected in earlier Supreme Court deliberations (Kanerva v. Weems).

Contradictorily, he believes the next battle will occur between WeAreOne and the General Assembly regarding whether current workers’ benefits are covered upon entering the work force or at the end of their profession.   He believes that they are covered and points to the recent decision of May 8, 2015:

¶46…”The protections afforded to such benefits by article XIII, section 5 attach once an individual first embarks upon employment in a position covered by a public retirement system, not when the employee ultimately retires.”

Jim Bachman - Executive Director IRTA

Additional language in the section echoes in even more concrete terms.

When asked about what key players are currently involved in the latest iteration of a “consideration” offering, as in Senate President Cullerton’s earlier SB2404, Bachman replied it was probably too early to tell.  He reminded us all that it may well depend on whether one powerful Speaker will release the votes for such a bill.  He expected that another committee like the one that hammered together the unconstitutional SB1 might come about as the willing and interested members of General Assembly moved from November through December. 

What might such a bill look like?  Bachman offered a possibility:

Active Tier One teachers can elect to keep their 3% compounded Cost of Living and receive no further raises in the computation of the final annuity benefit OR Tier One active teachers can elect to drop their 3% compounded COLA and include their annual raises as part of the final annuity settlement (in essence, become a Tier Two recipient).

Because the attack would be on active educators, WeAreOne would be the organization to muster a legal defense against the next attempt to curtail benefits.  Here again, Bachman believed that there was quite enough in earlier precedent to thwart such an assault.  

Currently, the IRTA has $130,000 in its Emergency Legal Fund.  Before the legal battle in 2015 over SB1, my records indicate the IRTA had nearly $350,000 reserved for the upcoming litigation.  Let’s hope we need not gird for another confrontation, but it is one good reason to continue sending a donation to our legal defense fund.

The six-month interim budget allowed by Rauner will end soon, and our state is now awash in debt.  In fact, this is how we now do business in Illinois – by not paying our bills.  And each dollar we owe become one with a late charge and interest attached.  This is no longer a change by the governor.  This has become his history, his way of operating a state.

Bachman suggests that the legislators are becoming slightly more open to other ideas for revenue.  Perforce.  We can expect discussion this time around about taxation on services, or even taxation on retirement income.  But in each of these cases, there are diminishing returns and possible reactions which might lead to lessening income. 

Game of Thrones 2.0

Ralph Martire’s (Director of the Center for Tax and Budget Accountability) often recommended re-amortization of the pension payments – away from the balloon mortgage of the 1995 payment schedule for the money owed – is gaining interest.  On the other hand, according to legislators I have talked to, the first years’ payments of such a readjustment prevent it being taken seriously.  Too much is owed to provide for a greater payment the next two years in order to find a stable amount.  And think about Rauner’s backlog of bills since.  Not likely at all.  Not likely ever.

People in the audience also asked about a graduated income tax, but Bachman reminded them the issue is constitutional as it states in Article IX: “A tax on or measured by income shall be at a non-graduated rate.”  Once again, not a likely scenario yet; not until the General Assembly has found no more road down which to kick a can.