Vote Doug Strand for TRS Annuitant Trustee

Why to Vote for Doug Strand for TRS Annuitant Trustee

I gladly borrow this retrospective from Glen Brown and sadly attest to its accuracy.  Recent communiques from TRS as well as the IRTA indicate that little or less is being done to correct the continued exploitation of the Illinois Pensions System by legislators in Springfield.  We need stalwart representation in order to sincerely protect our earned benefits.  I too will vote for Doug Strand.

From Glen Brown: 

It was under the IEA leadership and agreement of Bob Haisman when the flawed “Pension Ramp” (Public Act 88-0593) was signed into law in 1995. It was later discovered that "the Statutory Funding Plan's contribution schedule increased the unfunded liability, underfunded the State's pension obligations, and deferred pension funding. The resulting underfunding of the pension systems enabled the State to shift the burden associated with its pension costs to the future and, as a result, created a significant financial stress and risks for the State..." (In re Pension Reform Litigation (Doris Heaton et al., Appellees v. Pat Quinn, Governor, State of Illinois, et al., Appellants)). 

It was under the IEA leadership and agreement of Ken Swanson when SB 1946 passed on March 24, 2010 in approximately 10 hours, a senate bill where Tier II members would begin subsidizing both Tier I and Tier II benefits, where the state would eventually not owe any annual contribution to TRS because the Tier II members would be paying down the entire cost, where Tier II members will receive a TRS pension that will be less than Social Security, and where school districts will be responsible for making up the difference. 

It was the IEA leadership of Ken Swanson and Cinda Klickna that “proudly supported” Senate Bill 7 signed into law in June 2011, the bill that ensured that teachers’ evaluations and their tenure were tied to the Performance Evaluation Reform Act (Public Act 96-0861), the bill that ensured a so-called “streamlined process for the dismissal of teacher tenure,” the bill that also required an authorization of 75% for a strike vote in Chicago, to name just a few complications that confront today's teachers.

It was on July, 2, 2012 when Fred Klonsky, John Dillon, Michael Cousineau, Catherine Lenzini, and I met with Cinda Klickna and other IEA leaders to discuss our concerns about the IEA's willingness to negotiate teachers' and retirees' constitutionally-guaranteed pension benefits and rights. Of course, the IEA leadership did not heed our advice. 

Instead, 10 months later we witnessed the folly of the IEA leadership's agreement to a reduction of pension retirees’ benefits and rights in Senate Bill 2404 in May, 2013.  The IEA leadership believed SB 2404 would have thwarted any further attacks on the Pension Protection Clause. Fortunately, Michael Madigan never called for a vote on this bill.  What soon followed, however, was Michael Madigan’s Senate Bill 1 in December 2013, another diminishment and impairment of teachers’ and retirees’ constitutionally-guaranteed benefits. Senate Bill 1 was ruled unconstitutional by the Illinois Supreme Court on May 8, 2015.

It is the current IEA leadership under Kathi Griffin that recently endorsed candidates, such as Michael Connelly, Don Harmon, Sue Rezin and others, who had voted to diminish and impair teachers’ and retirees’ pension benefits.

It is the current IEA leadership of Kathi Griffin that recently stated: "...It’s refreshing to have a governor not only focused on what is best for students and Illinois’ future, but who is willing to work collaboratively to get the best results... We applaud Gov. Pritzker for looking at various funding sources because funding has to play a role in the future he’s building for Illinois. A starving state cannot grow. And, we find the Governor’s pension proposal an interesting start to the conversation..."Both the Illinois Retired Teachers’ Association and the Teachers’ Retirement Association have emphatically disagreed with Pritzker's proposed state budget.  

Impeach Trump? Think Carefully, Please.

Impeach Trump?  Think Carefully, Please.

The New Yorker’s Adam Gopnik in his March 18^th essay “The Pros and Cons of Impeaching Trump” offers serious considerations about the wisdom of pursuing sudden energy to impeach a man as notably ill-equipped in politics, a education, and morality as the current President of the United States.  If you have not read the article, you’d be most wise to do so.  It may be true that Pelosi’s observation that he isn’t worth it may also be a prescient warning as to why it is not worth it for such an activity to proceed on many, many levels. 

I take the liberty to provide three observations by Adam Gopnik.  I believe you’ll find these separate observations quite enough to bring you to reading and thinking about his judicious opinion at The New Yorker.  

“There is, however, a real and reasonable argument among congressional Democrats—and, indeed, among the public—about whether pursuing Trump’s impeachment, even assuming that we get the facts, is a wise idea. The arguments against it range from the hyper-practical point that a President Mike Pence would be worse, to the procedural-minded one that, since impeaching Trump would mean that two of the four most recent Presidents would have been impeached, and since articles of impeachment can be passed by a simple majority in the House, every President from now on would risk facing it the moment the opposition has a majority. This would create perpetual governmental paralysis, and, while Trump might not care about safeguarding democratic institutions, the country should.”

“Any one of a dozen things that Trump has done overtly would have resulted, if done clandestinely by another President, in near-universal cries for impeachment, if not for immediate resignation. Just for a start, his firing of the director of the F.B.I. and then confessing to both a journalist and the Russian foreign minister that he did it to end an investigation into his own campaign’s contacts with Russians follows the exact form of one of the impeachable offenses—obstruction of justice—that was applied against Richard Nixon. The “smoking gun” tape smoked because it showed that Nixon had tried to stop the F.B.I. from investigating the Watergate break-in on phony “national security” grounds.”

“Pragmatism is not a way of negating principle but, rather, the realist’s way of pursuing principle. The arguments against impeachment today are primarily pragmatic, the arguments for it primarily principled, but the principled course could, before long, turn into the only practical course. Impeachment may be too good for Trump. It may yet prove just the thing for the country.”

Please read the entire article.  Let's work together and save our Constitution together.

What's Right About a Fair Tax in Illinois?

"Why must royalty pay more, my friend?"

Graduated or Gradient? – Looking for Accuracy in a Fair Tax for Illinois*

“This season affects me most – psychologically,”my wealthy friend Ernesto uttered between sips of cognac the other evening.  

“It has been a brutal winter, Ernesto,” I offered hopefully, “but the end is coming with each day’s increasing sunlight.”

“I am talking taxes, my friend,”Ernesto responded, glowering.  “I am imprisoned by your government’s exasperating 33% income tax.    And, I suppose, you are now part of that progressive rabble that wishes the same - a graduated income tax in Illinois?”

“Goodness, Ernesto.  Thirty-three percent indicates a significant income.  I am happy for your success.  May I ask what portion of your income is subject to this rate?”

“Why, all of it…just as you and your union bosses would wish in Illinois.”

“Actually, Ernesto, if Illinois were ever to move to a “Fair” tax system, one you would call progressive or graduated, the increases in taxation would occur as they do on the federal level – at thresholds or gradients.  In other words, Ernesto, if you achieve $3000 above the threshold for 33% taxation (which is $226,850), you pay 33% on that $3000, not your entire earnings.

“In fact, Ernesto, you pay your federal tax like everyone else for all of our services for each of the thresholds as you move through them, my friend.  That means you pay only 10% on your first $18,000, 15% on your next $56,000, 25% on your next $75,000, and so on.  You don’t fall into a category where you pay 33% for all of your earnings.  That’s why I use the term gradient tax system (or fair tax) rather than graduated when I talk about it. “ 

“You don’t know my pain…”

“In truth, Ernesto, you pay the same percentage tax as me until you move well beyond me…and then you pay extra for only those amounts above our joint threshold.” 

“I see. Don’t you have anything better than Hennessey?  Paul Ferrand or Skye?”

“Sorry, no. And that is how a fair tax would work in Illinois, Ernesto.  We, both of us, would be taxed at higher levels for the amounts we earned above thresholds of income, not for all of it.”

“Ahhh, my friend.  But you’re still stealing from me for being successful, are you not?”

“Well, not actually, Ernesto.  In truth, you and I might actually be stealing from the greater population in Illinois who pay more dearly for their services – education, protection, healthcare, roads and transportation – than we ever will.  And, if we’re not stealing, we’re certainly getting a better deal for it all.”

“Ridiculous.”

“Not so, Ernesto.  The average earner in Illinois pulls in $47,485 annually.  At 33%, I know that you pull in much more, and I’d venture nearly ten times that amount.  Nevertheless and without denial, let’s review our numbers.  Suppose Mr. Average needs a new car for his family and purchases a solid sedan at $25,000.  I see by your scowl that such a concept is impossible.  Will you accept $40,000? “ 

“Only if I have to…”

The taxes on this family’s precious purchase will be several – New Vehicle Tax, Cook County Home Rule Tax, Cook County Sales Tax, possible Chicago Home Rule Tax…and others. Those taxes, Ernesto will run to nearly $3,000 – or almost 7% of the earner’s annual salary. “ 

“And…?”

“For an income earner like you?  A mere .6% of your salary.   Ernesto, you would need to purchase at least ten of these vehicles to begin to feel that same impact on your income.  That is something, I might add, you would not and never need do.  But it does illustrate a significant difference in our relationship with tax requirements, doesn’t it?  We gest away with a lot, my friend.

“Add to your and my advantages the costs of milk, gasoline, clothing.  Costs of living and taxes for these average workers, Ernesto, drain huge portions of their ability to live, and we are not talking disposable income.  

“Indeed, what you and I pay for the protection of police and fire, for our schools, for transportation, health services, and other benefits is a steal, Ernesto. Don’t we owe it to make it more even?”

Silence.

Note to self: Purchase Paul Ferrand for next get-together.

*

In the last two days, new-elected Governor Pritzker has finally offered up a schema for his proposed graduated income tax for earned income in Illinois.  It is his hope that such a plan will provide Illinois with enough additional revenue to offset some of the $billions in overdue bills and ultimately long-term pension underfunding.  His plan, like the necessary act of putting an amendment to change the constitution remains a wishful work in progress.  Likewise, his preliminary specifics/numbers offer a starting point for serious debate over the schedule of payments to be made by income earners.  Let us not forget that the addition of a non-marginalized payment of 7.95% for anyone earning over $1million annually is just a starting point as well.  While the Tribune and the IPI will quickly jump on that distractive possibility, legislators would have to hammer out the actual payments after a successful adoption of a change to the Illinois Constitution.  I resurrect this adapted discussion I had with my friend some years ago to point out the inadequacies and penalties of a flat tax in Illinois.

The Illogical Argument of Kristen McQueary on Pensions, etc.

Correlative Fallacy and the Illogical Argument of Tribune Editorial Board member Kristen McQueary

Correlative Fallacy: An argument that tries to redefine a possible correlation (from a multiple of options) so that one possibility encompasses the others, making only one alternative possible. 

Example: Many men who lift weights and work out are bald.  Therefore, lifting weights and/or working out will cause hair loss.

In the Tribune today, Kristen McQueary’s opinion piece ends with an exaggerated font and bold recap stating: “There’s nothing ‘fair’ about politicians spending recklessly for decades, failing to pay what the government owed into pension funds, raising the flat tax rate with no reform, refusing to advocate for changing the pension clause of the Illinois Constitution – and then blaming the rich folks for not pulling their weight.”

There’s lot to unpack here. 

I think McQueary would find most public sector workers in Illinois agreeing with her first two clauses. But they would likely link them both. 

“Spending recklessly,” meant diverting money from pension payments to public sector workers for services without asking taxpayers to make the kind of concessions other people in other states were paying for, like improved roads, health services, public education, etc.  Over the decades as a result, the debt (also known as the unfunded liability) has now reached a whopping $131 billion.  

That’s a lot of unpaid bills over a very, very long period of time.

But Illinois seemed little concerned about that, and even though the state (Edgar) put together an emergency plan in 1995 to pay it all off by 2045, they were only buying more time.  And by skipping or skimping in pension payments, the then fault-filled design did little to help.  In fact, the Commission on Government Forecasting and Accountability, the fiscal research arm of the General Assembly, concluded in 2013 that the largest cause of the unfunded liabilities was inadequate contributions from the state. Underpayments between 1985 and 2012 totaled $41.2 billion...” 

McQueary’s right.  That’s not fair to the thousands of public sector workers who made their nearly 10% payments to expect a pension when they retired. 

As for McQueary’s complaint in the opening comments of her opine that Indiana pays all their bills within their required deadline, but Illinois must put off bill paying for inordinate lengths of time?  And pay interest? 

But trying to link Indiana’s payment of bills within the timeline set by their legislature and Illinois’ rate of delinquency cannot be connected (as she would have us believe) with the unfunded pension liability.   That’s due to much history but more recently to Rauner as it might be to balding men in his administration.  

Rauner’s hardline impasses created all sorts of havoc, devastating nonprofit social services, state-run universities, contractors of all types and vocations. “Meanwhile the backlog of unpaid bills shot up again.  Illinois was spending about the same amount it had spent when the income tax had been higher, but the state was n jo longer collecting enough money to sustain the spending.  By last November, Illinois was $16.7 billion behind in its payments.”  

After her love for Indiana, McQueary argues that Illinois voters should reject a graduated income tax rate because, well, because it was done in 30 other states “and Illinois could have – should have – done so a long time ago.”  But now, Illinois is doing this to make the systemic revenue shortage work to pay the bills while other states (Iowa and Wisconsin) did so for fairness to taxpayers and to stabilize budgets. And unlike other states “(they) have not jacked up the rates irresponsibly as a way to claw out of abysmal financial management.”

So….  Even though Illinois faces a budget deficit after decades of a flat tax, a graduated income tax which would offer more fairness and budgetary assistance is not allowed because you asked too late.  As my dear old mother used to say when we were trying to explain what had happened to her best and now destroyed outdoor plant, “Well, you cannot argue with logic like that.  Now, go face the corner and figure out how silly you sound.”  

McQueary throws some tea party history at the reader in the end, resurrecting the Stamp Act of 1765 and complaining that “Taxpayers deserve respect.”  And in one of her continuous tropes, she equates the inefficiencies of government taxes with pensions to begin with. McQueary wants “relief" on the constitution’s pension clause.  

She somehow correlates the protections reinforced by the Illinois Supreme Court in May of 2015 with the history of skipped payments we both agreed on in the beginning of her essay. Quite the jump.  Especially in that even if she did get her way to strike the pension clause, Illinois would legally still owe every bit of the part it never paid.  That $131 billion that is still owed.  Governors like Big Jim Thompson loved to tell we people that he gave them all these services without increasing taxes.  But it was pensioners who gave their money, not the State of Illinois.  And now we all (emphasis on all) have to pay.

An amendment to provide for a more fair and better balanced state budget through a graduated income tax, or one to strike a pension protection clause which will still be owed? I am pretty sure on where I’d place my energy.

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

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.

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.