Is only the beginning of the problem for Republicans attacking the pension offset that underpins the budget. Aaron Chambers explores it in a bit more detail:
At the end of May, as the legislative session ended, the Republicans complained the pension maneuver would cost the public upward of $30 billion, perhaps even more, through 2045. But on Wednesday, the Rockford Register Star put the projected tab at less than $7 billion, a far less dramatic sum.
The doomsday figures touted by the Republicans failed to account for savings associated with cuts in retirement benefits for future state employees, university employees and public school employees — restrictions that were built into the pension measure.
The doomsday figures also assumed the state would skip 100 percent of its obligation to the retirement systems for one or two years. As it happened, the state deferred only about half its obligation over two years.
The bait and switch is that Democrats are arguing this puts the system on better footing because of reforms, but what would have put the system on better footing is the reforms combined with meeting the funding requirements. Instead of having to pay later, if the state had met its current obligations, it would have improved the long range fiscal situation. Instead, the state will now have to catch up for lost dollars.
While the impact isn’t nearly as dramatic as Syverson and other Republicans are claiming, they are essentially right that this is putting off reckoning for a future day–exactly what is going on in DC these days.
I attended our local school board meeting last night, at which it was announced that nine veteran teachers (247 years of experience) would be retiring early to take advantage of the last early retirement option before those benefits would be cut. They had literally one day to decide to do it, as Mike Madigan and the Blowjob snuck it in over Memorial Day weekend. Everyone remarked how awful it was to lose them (they’re good teachers), how they wouldn’t have retired this soon had it not been for the certainty of losing benefits, and how disgusting it was that Chicago teachers didn’t have to make this choice. Blowjob lost every vote in that room, and it seems to me that he’s energizing people to work against him. Anyone with a state pension sees him for the lying little two-faced scum that he is, and they see Madigan as a criminal. I will never vote for a Democrat at the state level again.
If one looks at the amount that will have been diverted from pension purposes during Blagojevich’s reign, it seems to be over $4 billion or the $10 billion he borrowed in 2003.
Michael,
What program are you talking about? ERO is now permanent so your comments don’t make any sense unless you are talking about something else.
ERO is permanent, but at a much reduced rate that will now cost school districts more. What TRS covered now has to be covered by school districts. That means that teachers will not get what they used to get, because small school districts can’t afford it. With six per cent caps on raises the last four years, which includes pay for extra-curricular supervision, teachers will either work for free or refuse to do extra. ERO is not now worthwhile, which I think was the Blowjob’s intention. Old ERO is dead; new ERO is worthless.
I don’t know how one argues underfunding pensions is bad (and I do), but that benefits for pensions shouldn’t have been changed. The ERO changes aren’t unreasonable.
I find it hard to believe that in the last four years of one’s career they are all of a sudden taking on new responsibilities. The pay raise cap is reasonable and very necessary.
Cost sharing with the local district corrects a rather perverse incentive local districts had to pass along the costs to the state–now they have to share in the costs.
In terms of those eligible now, everyone new ERO changes were on the table. It’s hard to say they had one day when NEA and IFT had been warning everyone some sort of change was coming and even agreeing to the eventual level.