Saturday, February 23, 2019

A Letter Penned to Illinois House Minority Leader Jim Durkin

A Letter Penned to Illinois House Minority Leader Jim Durken


February 22, 2019


Dear Representative Durkin,

I read with great interest your observations on the dangers of new-Governor Pritzker’s extension of the pension payment program in order to save money.  It is not often that a Republican Leader and the IRTA (Illinois Retired Teachers Association) often agree, and so emphatically.  (see below)

“The Governor recommended reducing contributions to TRS by $576 million dollars in his budget address. He is basing this reduction on his anticipated legislation that would add 7 years to the ramp, making the date to reach 90% 2052 instead of 2045. Essentially, this reduces contributions annually by several hundred million dollars. He is also proposing, and anticipating savings from, an extension of a buyout program that was passed last year but never put into place. This proposed pension holiday of $1 billion a year for every year of Pritzker’s term will ultimately cost the State of Illinois taxpayers around $150 billion. It is impossible to know the exact amounts until TRS performs an analysis.” (IRTA)

On the other hand, you also call for an immediate reduction in benefits for pensioners, one that both the Tribune and city mayoral candidate Bill Daley promote.  

If I am wrong, and I’d like your opinion, that avenue was closed in May of 2015 when the Illinois Supreme Court ruled unanimously that any or all benefits earned or even accrued during a public employee’s work career are protected from any impairment or diminishment.   Even (as in Kanerva), additional ancillary benefits like health care are shielded from reductions.  

The Illinois General Assembly later designed two new Tiers (II and III) to reduce the benefits available to any of those employees entering the work force after 2011 and 2019 respectively.  Hasn’t the reduction in benefits already taken place through legislative action, Representative Durkin?  Tier II employees are effectively paying more than they will ever receive in return after retirement, will have only a simple COLA, and will retire later in life to avoid significant penalties.  Tier III employees will work an entire career paying more as well, and they will never break even on the payments made to the system unless they toil for over 50 years in the field.  

Here’s how I see it: Tier I employees are protected.  Period. We may be expensive, but we are a diminishing population.  I suppose that’s one positive takeaway.  Is my observation wrong?

In fact, Tier II and Tier III employees are paying for Tier I, and they will never recoup the payments they have made into the pension system; thus, they are working to repay the unfunded liability owed to TRS for decades of the state’s shorting the necessary payments.

That brings me back to your and the IRTA’s critical observation.  Why on earth would Governor Pritzker, especially with an advisor like past Governor Edgar, decide on an extension of the original postponement of paying what’s due, one which will increase the unfunded liability and the interest (compounded) that is attached to it?  The “ramp” plan adopted in 1995, if not so detrimental, would be laughable in the increased accumulation of debt as payments were once again calculated to avoid full payment, etc.  

We have communicated before, and I look forward to your thoughtful response.

Sincerely,


John Dillon

Friday, February 22, 2019

READ Yoni Appelbaum's Impeach Donald Trump in March The Atlantic

A Most Critical Read: “Impeach Donald Trump” by Yoni Appelbaum – The Atlantic (March 2019)

“On January 20, 2017, Donald Trump stood on the steps of the Capitol, raised his right hand, and solemnly swore to faithfully execute the office of president of the United States and, to the best of his ability, to preserve, protect, and defend the Constitution of the United States. He has not kept that promise.

“Instead, he has mounted a concerted challenge to the separation of powers, to the rule of law, and to the civil liberties enshrined in our founding documents. He has purposefully inflamed America’s divisions. He has set himself against the American idea, the principle that all of us—of every race, gender, and creed—are created equal.

“This is not a partisan judgment. Many of the president’s fiercest critics have emerged from within his own party. Even officials and observers who support his policies are appalled by his pronouncements, and those who have the most firsthand experience of governance are also the most alarmed by how Trump is governing.

“’The damage inflicted by President Trump’s naïveté, egotism, false equivalence, and sympathy for autocrats is difficult to calculate,’” the late senator and former Republican presidential nominee John McCain lamented last summer. “’The president has not risen to the mantle of the office,’” the GOP’s other recent nominee, the former governor and now senator Mitt Romney, wrote in January.

“The oath of office is a president’s promise to subordinate his private desires to the public interest, to serve the nation as a whole rather than any faction within it. Trump displays no evidence that he understands these obligations. To the contrary, he has routinely privileged his self-interest above the responsibilities of the presidency. He has failed to disclose or divest himself from his extensive financial interests, instead using the platform of the presidency to promote them. This has encouraged a wide array of actors, domestic and foreign, to seek to influence his decisions by funneling cash to properties such as Mar-a-Lago (the “Winter White House,” as Trump has branded it) and his hotel on Pennsylvania Avenue. Courts are now considering whether some of those payments violate the Constitution.”

"More troubling still, Trump has demanded that public officials put their loyalty to him ahead of their duty to the public. On his first full day in office, he ordered his press secretary to lie about the size of his inaugural crowd. He never forgave his first attorney general for failing to shut down investigations into possible collusion between the Trump campaign and Russia, and ultimately forced his resignation. “I need loyalty. I expect loyalty,” Trump told his first FBI director, and then fired him when he refused to pledge it.

As for the liberties guaranteed by the Constitution, Trump has repeatedly trampled upon them. He pledged to ban entry to the United States on the basis of religion, and did his best to follow through. He has attacked the press as the “enemy of the people” and barred critical outlets and reporters from attending his events. He has assailed black protesters. He has called for his critics in private industry to be fired from their jobs. He has falsely alleged that America’s electoral system is subject to massive fraud, impugning election results with which he disagrees as irredeemably tainted. Elected officials of both parties have repeatedly condemned such statements, which has only spurred the president to repeat them.

“These actions are, in sum, an attack on the very foundations of America’s constitutional democracy.”

PLEASE READ THE ENTIRE AND CONVINCING ARTICLE HERE.

Saturday, February 9, 2019

Bill Daley Blames You Pensioners for the Anchor on Their Necks

Bill Daley on You and Your Pensions: Your Benefits are “a financial anchor around our necks.”

Bill Daley, making the effort to become third member of the family to be Mayor of Chicago, has amassed a $5 million war chest, received the recent endorsement of Al Gore, and carefully followed the guideposts of retiring Mayor Rahm Emanuel.

Emanuel, who inherited a terribly anemic pension system from Rich Daley who bled the system from the moment he took office, has always sought to blame the victims for the deficits accrued over the last many decades.

(From an earlier post in December) Emanuel’s office, like the State, faces an ever-increasing pension liability for public workers, teachers, police, firefighters, etc. For that, he blames the promise of an annual compounded 3% Cost of Living Agreement.  “Think about it.  What kind of progressive sustainable system guarantees retirees three percent annual pay increases when inflation has been basically at zero and current employees have at times been furloughed, laid off, or received minimum pay increases?”

Bill Daley has now taken up the same lamenting complaint.

“We have 50,000 retirees in the city of Chicago.  Former employees. And 50,000 present employees. That’s about 100,000 people. That’s less than 5% of the population of Chicago.  It amounts to a $29 billion-dollar anchor around the city’s neck.  In order to solve this everything must be on the table: reforms to the pension system, which will probably require a change to our constitution.  (Dick Kay WCPT Program)

Daley is fixated on the Pension Protection Clause of the Illinois Constitution (1970), which the Tribune characterizes as “rigid,” and which states; Membership in any pension or retirement of the State, any unit of local government or school district, or agency or instrumentality therof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” (Article XIII, Section 5)
 
Sadly, Bill Daley has neither an understanding of the historical reason for the inclusion of a compounded COLA nor the needlessness of trying to alter the Illinois Constitution (a formidable and divisive task) to curtail the COLA.
 
The change in the Clause has already been done, legislatively.
 
History: The annual compounded Cost of Living became a serious concern in the 1970’s.   It was a time of rampant inflation.  Inflation rates for the entire decade of the 70’s was 7.25%, and in 1978 and 1979 the numbers were vaulting back again (as in ’74) to over 12%.  People were choosing ridiculous balloon mortgages for housing ,and essentials were often unavailable or found at the end of a meandering queue.  In Illinois, concerns for the well-being of those on fixed income/pensions resulted in an attempt by the General Assembly to find some remedy.

The TRS AAI remained unchanged until 1990, when the formula was altered in state law to require subsequent increases to be compounded – calculated from the member’s current pension amount instead of the original amount. Inflation at the beginning of 1990 was 5.4 percent.
The 3 percent compounded AAI is a product of a time when inflation was higher than it is now and had been increasing at a steady pace for many years. Inflation averaged 6.37 percent during the 20 year period prior to 1990, with a high of 13.9 at the beginning of 1990 and a low of 1.46 percent at the beginning of 1987.
Again, Bill Daley: “And I believe we have to and at the same time (there’s) revenue.  The problem has been the last four years have been a waste because the former governor and the fight in Springfield and all that stuff.  But some people want to just put it on the backs of the pensioners. Others want to solve it with the revenue side.  Property tax increases some people want.  Casinos. Marijuana…I’ve said everything must be on the table but there must be reforms to the system.  Which means we’re going to have to change the constitution and we ought to get on with it.  And then allow labor and management – the government – not just the city and remember the state’s problems are much worse than the city’s.  To sit down and bargain some of these things in an honest way to make changes.”
 
But an effort to amend the Pension Protection Clause is unnecessary: Incoming and new hires coming in to the public sector in Illinois do not have access to a compounded COLA in their retirement.  Nearly a decade ago, the legislature in the General Assembly passed a bill generating a second Tier for incoming educators which would force them to work longer (age 67 without penalty), for a simple and capped interest COLA based on the CPI, and the same payments to the pensions as Tier One (those who have 3% compounded).  The dwindling population of Tier One teachers is now already in or heading toward retirement.
 
The General Assembly can (and has) made changes to the COLA as well as other requirements and diminishments for public sector workers who are entering the public work force.  That is legal and easier to do.  From the Center for Tax and Budget Accountability, Ralph Martire: “Why take away the constitutional protection for workers when legislatively, you can create a Tier II, Tier III, Tier IV that has a different cost of living adjustment, COLA, for workers going forward? You accomplish the same thing in much less time, because passing a piece of legislation through Springfield is a much quicker process than getting a constitutional amendment.”
 
Like most arguments made by various Daleys through Chicago history, their voices express a kind of confused exasperation: “To be honest with you…I’m not saying it’s on one side only, but it cannot be but when you have a system that cannot be changed right now.  And I’m not talking about gutting anybody’s pension.  Take a simple 3% COLA a year compounded, compounded a year.  Somebody retiring at age 55.    Lives to 85 or 90.  And be getting whatever they’ve earned on their pension, and still be getting 3% a year compounded, okay…which is incredible.  If someone came to you and said I will guarantee you 3 % compounded for the next 35 years you would take that investment in a minute.  Right now, everybody is basically stuck to try to solve this problem and all I’m saying is we ought to take the handcuff off in order to be fair. I’m not sayin’ be unfair to people unless you believe absolutely no way going forward new employees or present employees you cannot change anything no matter how bad the city’s finances get for no matter how few people live here …you know, the pensioners who I admire, you know many on pensions from government… the minute they retire and they have a right to they can move anywhere- they can go anywhere – and they can pay taxes in other places…and they are not the ones who are not necessarily here having to pay those obligations albeit legal obligations…but all I’m saying is let’s get real and together try to figure this thing out.  But if you don’t change the constitution being able to do that in a fair and balanced way it is almost impossible.
 
And although he may have family and people he knows on government pensions in Illinois…well, it’s just not fair and (exasperation) you’re the problem.
 
Summary: The calls by the outgoing Mayor of Chicago and Bill Daley identify the critical costs and debt the city (as well as the state) have built up over the last 80 years, but to try to blame a single reason (like the compounded COLA) ignores the truth as well as the answers.
 
The legislature has already addressed those issues through Tier developments even if unfairly.
The Illinois Supreme Court states that such an attempt will not affect current Tier One retirees.  Any changes, even those by constitutional amendment, can only be enforced “going forward.”
The refusal to amortize the pension debt and subscribe to an artificial “ramp” that is draining services is undermining the general revenue. By 2030, $6.5 billion in General revenue will be required to pay the pension ramp (PA88-593) unless the General Assembly acts.
Tier Two and Three (and other) employees will never be given protection against inflation.
 
Bill Daley states: “We have got to get real out here.  The leadership.  The political leaders on how to deal with this financial anchor around our neck… and that is if we just think short term either personally that my pension is the only thing that matters and I’ll be outa here the minute I retire so it doesn’t and I’m not living here and I’m not worrying about the real estate taxes not worrying about anything else…That’s not fair either. The rest of the people here who are trying to pay your pension. That’s…that’s not fair. “

Yeah, let’s get real, Bill. And, please study up a bit.

Amortize the unfunded liability to pensions, dispense with the 1995 pension ramp used to short pension payments, recalculate the annual required contribution to meet the current (not smoothed) needs, create a tax structure which is both progressive and comprehensive to the people of our state. And start paying the full amount.


Saturday, February 2, 2019

Monarch Populations Increase in Mexica, But Not in Western USA

Monarch Populations Increase Dramatically in Mexico…in CA, Another Story 


We are at that point in environmental efforts where we take what we can get.  Any good news should be used to justify the hard work and efforts of those of us who fight the industries hellbent on eradicating the natural environment and those smaller groups of homesteaders who are struggling to breed Monarch (and others) over the summer months in hopes of adding to the populations facing the dangers of a long migration back from the Midwest to Mexico and elsewhere. 

According to several reports and one from The Guardian, “The population of monarch butterflies wintering in central Mexico is up 144% over last year, according to new research.
The data was cheered but scientists quickly warned that it does not mean the butterflies that migrate from Canada and the United States are out of danger.

This winter, researchers found the butterflies occupying 14.95 acres (6.05 hectares) of pine and fir forests in the mountains of Michoacán and Mexico states – an increase from 6.12 acres a year ago.

This year’s is the biggest measurement since the 2006-2007 period, said Andrew Rhodes, Mexico’s national commissioner for protected natural areas.”

Monarch breeders and migration observers were worried about the storms and   cold weather along the routes through Texas into Mexico, but the population’s increase was cautiously welcomed by many.  

Andrew Rhodes, Mexico’s national commissioner for protected natural areas regarded the increase in area of hectares as a positive possibility: “Once in Mexican territory, the butterflies occupied an area that gives us a lot of hope for the future.”

Ryan Norris, an ecology professor from the University of Guelph in Ontario, Canada, said it would be dangerous to think the improved coverage in their wintering grounds meant the butterflies were out of the woods.

“It buys us time, but that’s the best it does,” said Norris.

Norris saw little connection between this year’s increase and the concerted conservation efforts along the butterflies’ migration route, especially in Mexico where the government, with the help of local communities, has nearly eliminated illegal logging inside the butterflies’ protected area west of Mexico City.

“It was a Goldilocks year this year,” he said. “Not too hot, not too cold, it was perfect.”
Chip Taylor, director of Monarch Watch and an ecology professor at the University of Kansas, echoed that caution.

“It’s not going to be replicated next year, not even close,” Taylor said.

Above average temperatures in Texas next year will cause problems for the monarch production, Taylor said. Last spring, cold temperatures north of Texas kept the butterflies there to lay their eggs, but when it’s warmer they wander farther north too soon and the population does not grow as well, he said.

Sadly, numbers in overwintering areas in California have dropped significantly – likely due to drought or even the late fires in southern California.  While scientists and trackers struggle to make sense of the causal factors, the numbers are disheartening.  There is an 86% drop in population in the years between 2018 and 2017. 

According to an article in The Mercury News, “Typically Monterey County sites support large monarch populations. In 2017, four sites, including Andrew Molera State Park and Pacific Grove, had at least 1,000 butterflies. A private property in Big Sur had almost 20,000, but this number is down to just 800.
“The big trees had fallen with the winds or otherwise. So the butterflies had probably moved to other places,” said Connie Masotti, a docent at the Pacific Grove Museum of Natural History, who has been counting monarchs since 2013.
“It’s a very complicated habitat that they are looking for and it doesn’t take much for it to go wrong,” Masotti said.
In the 1980s, nearly 4.5 million monarchs migrated to coastal California to escape cold winters. “We are now down to less than one percent of this historic population,” Pelton said.
What is more worrying is the drop in butterfly numbers below the 30,000 mark. Scientists studying monarch butterflies have predicted that populations below this threshold may not be able to bounce back and continue to migrate.”
“It is a concerning level to have gone down to in a single year,” said Emma Pelton, a monarch conservation expert with the Xerces Society, a non-profit organization in Portland, Oregon that works on the conservation of invertebrates.

There is a general understanding that expansion of agriculture, use of pesticides, loss of native milkweed, and climate change – affecting both wintering and breeding habitat, have contributed to the decline of Western Monarch populations.
But last year was particularly bad weather for monarchs. Unusual winter storms in March made their return journey to breeding sites, west of the Rocky Mountains, more complicated. “They were probably vulnerable after they had left the protection of trees,” Pelton said.
She also speculates loss of large trees to previous or ongoing droughts as a reason for declining monarch numbers. The butterflies use branches of tall trees to roost and for protection against wind.
Monarchs like evergreen trees; the fine leaves give them wind-protection, but also some dappled sunlight. The temperatures must be just right for them – not too cold, otherwise their muscles don’t activate, and if it’s too hot, their stored fat burns too quickly. And they need nectar plants to feed on.
Meanwhile, eastern populations of Monarchs have also demonstrated a significant increase in populations in their overwintering areas in Florida, etc.  According to Monarch Butterfly Garden, blogger Tony records more than 200 million Monarchs in the lower east populations.
There’s much to be hopeful for, but there’s still much more to do.  
For example, Illinois could follow the lead of Minnesota, which passed legislation to prevent Monsanto and others from using GMO and pesticides which destroy milkweed and other plants beneficial to Monarch.  By the way, this does not include the overspray of herbicides and pesticides that are cancer agents for humans.  
This article for the Star Tribune in 2017 indicates just how far ahead of Illinois Minnesota was, and how Monsanto and others are likely never to stop creating poisons. “Minnesota is clamping down on a troublesome pesticide developed by Monsanto that brought a cascade of complaints and damaged an estimated 265,000 acres of soybeans in the state this year. Monsanto is pushing back, questioning how the state came up with the tougher standards and warning that they could be counterproductive.
At stake are millions of dollars in potential sales for the new product, both in Minnesota and nationally. Minnesota ranks third in the nation for soybean production after Illinois and Iowa, and the state's crop was valued at $3.6 billion in 2016.
Monsanto developed a new formulation of an old pesticide, called dicamba, to solve a vexing problem: Many weeds have become resistant to Roundup and other popular weed killers, and growers and crop protection businesses are eager to have a replacement.
Call Governor Pritzker’s Office at 217-782-6830 or 217-782-6831.
Tell the new Governor that you respectfully want him to consider making changes like Minnesota and other states to protect not only the unique lives of Monarch butterflies but also the lives of all of us and or progeny.
“Hello, and thank you for taking this call.  I am a constituent of Governor Pritzker and reside in this (zip code).  I am pleased Governor Pritzker is now leading us toward a more fiscal, economical, and environmentally safe state in our union.  I would ask our Governor to strongly consider the efforts of states like Minnesota to ban the use of dangerous pesticides, GMO herbicides, and chemicals that pose an endangerment to all of us as well as the creatures in our environment.  Please help us to make this state a place to raise a family with a healthy and environmentally safe future.”  

Friday, February 1, 2019

The Miracle of Compounding
February Means 3% Increased COLA for Tier One -  Thanks to IRTA

Simple interest is a percentage of money (a.k.a. interest) earned on an original (or principle) amount of money.  For example, if you invest $100 at 10% simple interest per year, you will receive $10 at the end of the year on your original $100 investment.  And, with simple interest, you would receive the $10 each next year, and on and on.  In short, you would earn $10 per year for every year you maintained your original investment.  

Compound interest, on the other hand, provides you the percentage on the original amount (principle) plus any earlier earned interest.  In other words, you would earn a return (in this case, 10%) on the original investment plus the interest earned in the year previously.  This difference is as significant as  E = MC²!   

See the chart below for an example:

Original $100 After
Simple Interest
Compound Interest
1 YEAR
$110
$110
2 YEARS
$120
$121
3 YEARS
$130
$133
4 YEARS
$140
$146
5 YEARS
$150
$161
10 YEARS
$200
$259
20 YEARS
$300
$672
30 YEARS
$400
$1,744
40 YEARS
$500
$4,526
50 YEARS
$600
$11,739


A Message from IRTA Today, February 1st.

“Hi, I’m Mike Schmidt chair of the state IRTA membership committee. I’m here to remind you that today is February 1ST and we all know what the means. Yes, it is just 24 days until my next birthday… oh, no, no, no. 

I mean that today is the day that TRS deposits to us our next pension payment. More importantly, this February pension payment is the first one of 2019 to include our annual 3% raise, if you’re over the age of 60, of course.

Speaking on behalf of the IRTA, I’d like to remind you that it was the leadership of this organization that saved your yearly 3% cola when the state legislature voted to restrict it several years ago. It was the IRTA lawsuit in the case, Heaton vs. Quinn that ultimately guaranteed our retirement benefits. 

Without the efforts of the IRTA we would be poorer and our futures less assured. So, as a reminder, if you haven’t yet paid your 2019 IRTA annual dues, now is a great time to do so. 

With that in mind, remember that you can save $10.00 a year by switching over to dues deduct by going to the new and improved IRTA website.   

And when you run into retired school colleagues, ask them to join with you in the IRTA if they haven’t done so already. After all, we belong to the only state-wide organization solely dedicated to protecting the retirement benefits promised to us by the state. With those guaranteed benefits I know that your next birthday will be a happy as mine will be. 

Thank you for your membership.”

Mike Schmidt,
IRTA Membership Committee, Chair