STUMP » Articles » Public Pensions Watch: Chicago Deal Reaction Roundup » 5 April 2014, 19:05

Where Stu & MP spout off about everything.

Public Pensions Watch: Chicago Deal Reaction Roundup  


5 April 2014, 19:05

So I’m going to do a whirlwind tour of reaction to Rahm’s pension “reform” proposal…we already know that the blitzkrieg approach failed, but that doesn’t mean the proposal is entirely dead in the water.


Okay, here we go. First, a bystander remarks on the attempt

How did the plan go so badly off course so quickly? And more important to Chicagoans who are watching their city’s credit rating crumble, how can a workable plan be put back on track?

The answer is complex. It involves the difficulty of passing any pension bill in Springfield, resistance by state and city lawmakers to make tough votes in an election year, gubernatorial politics, and Mr. Emanuel’s governance style, which is much better at making big announcements than doing all of the spadework necessary to insure that those announcements become reality.

For starters, Mr. Emanuel never had all of the city’s unions on board with this plan. The building trades — the same folks who agreed to the park district deal — were behind it, and so to a large extent was the Service Employees International Union. But not there was American Federation of State, County & Municipal Employees. And certainly not there was the Chicago Teachers Union, a vociferous opponent of Mr. Emanuel’s that represents some of those who would have been affected by the deal.

With that kind of potential opposition in the weeds, all it would take to bring that opposition up front and stall the package was a glitch — even if Illinois House Speaker Mike Madigan and Senate President John Cullerton were publicly in support of the plan. And that glitch arrived over an always hot subject: property taxes.

In unveiling the plan to reporters on Monday evening, City Hall never got precise and didn’t clearly describe how much taxes would have to go up until well into the day on Tuesday. That sparked a report here about how what was being billed as a “$250 million property-tax hike over 5 years” in fact was a hike of $50 million a year for each of five years that, over that period, would reap $750 million.

That story caught the eye of Gov. Pat Quinn, who had received what I’m told was only a short, general briefing from Mr. Emanuel in a Sunday phone call. That put Mr. Quinn in an awkward position, since he just a few days ago had called for giving every homeowner a $500 a year property-tax refund.


Yeah, that’s some trouble.

Now, I love going to the leftie side of the debate, just because it’s so entertaining in its delusion. My favorite go-to leftie source on Illinois pensions is Fred Klonsky, a retired Illinois teacher. He has not disappointed this past week, and so I will link to a few of his posts.

From April 2, he posts a video on the pension cuts, saying it would cut benefits by a third (does he realize that would sound pretty good to taxpayers?)

From April 4, he surveys the carnage

The State Senate went home yesterday. Madigan tried a rewrite of Rahm’s pension theft. The Republicans weren’t buying it.

Meanwhile Squeezy went all amnesia, saying he didn’t know anything about the bill.

And SEIU local 73 continued their sellout of pension rights and their split from the position of the We Are One Coalition of city public employee unions. They raised the stakes with some sharp words directed at the Chicago Teachers Union.


Look, it would be fatuous to pretend Rahm isn’t a leftie himself. As well as Quinn. Watching was is essentially an internecine battle is amusing to a conservative (who is tired of being crapped upon by Republican leadership, but that’s for another day).

And for a really fun bit from today: Klonsky dumping on the Illinois Policy Institute

For some reason having to do with Facebook algorithms, the FB page of the Illiinois Policy Institute – a right-wing stink tank – frequently appears more often on my status page than do actual friends.

Maybe Facebook just enjoys seeing my blood pressure rise.

They posted this morning:

“There’s nothing courageous about telling people that you’ll temporarily raise their taxes and then, a few years after families have adjusted to the “temporary reality,” telling them – surprise! – you’re just going to make it permanent. That’s called lying; not courage.”

Apparently breaking a promise, a contract and a constitutional obligation to retirees doesn’t cause the same outrage.

What better represents the moral relativism of the corporate class?

Actually, IPI has put out something that is a lot more nice than I would.

But that’s something a lot of people are missing.

A lot of us who are kicking and screaming about public pensions are ones who realize that public pensions are going to get cut, because they are in a hideous position. This is lefties and righties (and lukewarm middle people), and many of us are pissed off not because we’re worried that taxpayers are going to get soaked — many of us know that you cannot soak the taxpayers enough. That’s why the pensions will get cut.

The people pretending otherwise are not the friends of public pensions.

I am not happy with Rahm’s “reform” because it will not even begin to fix the problem. He is just going for a quick political win, and he’s not really appreciably cutting the benefits and he’s not really going to get that much additional tax revenue.

Anyway, back to the leftie reaction.

Here’s Professional Upper-Lip-Biter David Sirota on the situation

If you’ve read the financial news out of Chicago the last few weeks, you’ve probably heard that the city faces a major pension shortfall, supposedly because police officers, firefighters, teachers and other public workers are selfishly bleeding the city dry.

You’ve also probably heard that the only way investment banker-turned-mayor Rahm Emanuel can deal with the seemingly dire situation is to slash his public workers’ retirement benefits and to jack up property taxes on those who aren’t politically connected enough to have secured themselves special exemptions.

This same story, portraying public employees as the primary cause of budget crises, is being told across the country. Yet, in many cases, we’re only being told half the tale. We aren’t told that the pension shortfalls in many US states and cities were created because those same states and cities did not make their required pension contributions over many years. And perhaps even more shockingly, we aren’t being told that, while states and cities pretend they have no money to deal with public sector pensions, many are paying giant taxpayer subsidies to corporations — often far larger than the pension shortfalls.

And you know what?

He’s absolutely correct.

Part of the problem is that governments get away with underpaying for the pension promises that would get corporations criminally prosecuted.

But governments are allowed to get away with it, because they supposedly don’t go out of business.


Good one.

Also, bullshit that Rahm is an investment banker.

That’s like saying Obama is a law professor.

Anyway, Sirota has some good stuff in there. I will write about this particular bit later:

Contrary to the story of public employees bleeding taxpayers dry, the Good Jobs First report proves that the slush fund is the root of the city’s true fiscal problem. As the municipal budget figures show, over the last 14 years Chicago refused to make its necessary pension contributions. Yet, at the same time, the city’s TIF-based “shadow budget” skyrocketed. In effect, more and more public revenue that was contractually obligated to pensioners was being diverted by politicians to fund TIF subsidies, many of which go to subsidize wealthy corporations.

The scheme has gotten so out of control that, according to Good Jobs First, annual TIF revenues now far exceed the annual cost of funding the city’s pension systems. The report shows that in 2013 Chicago’s pension costs were $385 million whereas Emanuel’s slush fund that year received $457 million.

Rahm is running into the problem that it is becoming harder to run the slush funds, in that he has to start cutting other interest groups. Daley never had to do that.



Rahm is not nimble enough to negotiate this particular disaster.

Rahm made the mistake of thinking he was smarter than Daley.

And what is hilarious is that an arch-conservative (me) totally agrees with a weenie leftie (Sirota) on this matter, and that I have made several leftie allies on the public pensions issue.

Okay, to end this post, I will give some of the generic, mealy-mouthed Illinois politicians, both Dem and Repub (and we know the Repubs are there for just window-dressing in Illinois), their screen time.

Oh wait, let’s hear the voice of the people first

By a wide margin, Illinois residents have less trust in their state government than residents in any state in the nation, according to results of a Gallup politics poll released Friday.

Just 28 percent of residents polled said they trust Illinois state government “a great deal” or “a fair amount”, according to Gallup. That put Illinois 50th in terms of trusting their state government, with the next closest Rhode Island and Maine with 40 percent.

Illinois’ “exceptionally low trust level” and dead-last spot isn’t surprising, Gallup said, considering two of its last three governors – Rod Blagojevich and George Ryan – were sent to prison for crimes committed while in office.

=This is my shocked face=

Now, Illinois Repubs unwilling to be shown as idiots

House Minority Leader Jim Durkin, R-Western Springs, told Chicago Sun-Times’ Early & Often politics portal that he’s open to working with Emanuel to solve the city pension problem but urged the mayor to dump the property-tax language from the legislative discussion entirely.

“I’m prepared and willing to work with the Democratic majority to help Chicago get out of this financial tidal wave here. Clearly, the way this bill was drafted was not received well in the chamber,” Durkin said.

House Speaker Michael Madigan’s camp has made clear it wants Republican backing for the plan to bail out the city’s underwater Municipal Employees and Laborers retirement funds. But the GOP wants nothing to do with scheduled $50 million a year annual ramp-up in property taxes over five years to pay down the city’s monstrous pension debt.

In fact, some in Durkin’s caucus have derided the plan as a $750 million property-tax grab from city property owners and don’t believe state lawmakers, particularly in an election year, should be expected to sign off on tax increases the City Council has power to impose on its own.

“I had some members who had reservations about the bill [Wednesday]. It’ll ease their decision-making process if it was taken out,” Durkin said of the property-tax language contained in Madigan’s bill.

Madigan watered down his proposal after it passed out of a House committee Wednesday by making the property-tax component an optional revenue component for city aldermen.

Matt Brandon, secretary-treasurer of SEIU Local 73, said his union, which has about 10,000 members affected by the city pension plan, believes the property-tax guarantee should remain in the package.

“There has to be a revenue guarantee to make this bill the bill we sat down and agreed to with the city of Chicago,” Brandon told Early & Often.

And let’s check with the Democrat governor

Gov. Pat Quinn finds himself in a bit of a political pickle: he’s running for re-election on a pledge to cut property taxes, but Mayor Rahm Emanuel wants to raise Chicago property taxes as part of a plan to shore up the city’s ailing government worker pension systems.

Asked Thursday whether he’d sign the mayor’s pension bill if it reached his desk, the Democratic governor declined to say where he stands.

“I don’t know what that bill is, frankly,” Quinn said at a news conference to highlight his call to increase spending on college scholarships for low-income students. “There’s all kinds of different descriptions. You know, they’re I guess they’re looking at something in Springfield and when they have something put together we’ll take a look at it. But I want to make it clear I believe in reducing the burden of property taxes in our state.”

While details of the plan have been reported since Tuesday, a Quinn spokeswoman said later that the bill could change.

Profiles in Courage.

More from Illinois Democrats

“Legislators are concerned about wearing the jacket for that property tax increase,” said Rep. Elaine Nekritz, a Northbrook Democrat and pension expert.

Some say Chicago, a home-rule city not subject to many state laws, often wants to be left alone by the Legislature – so city officials should take full responsibility for the taxes. Others are wondering where the unions in favor of the changes are and why the city isn’t dealing with all its pension accounts at once.

The timing isn’t the best, either, coming just a week after Gov. Pat Quinn made property-tax relief a cornerstone of his state budget plan. The Democrat wouldn’t stake a position on the pension measure Thursday but reiterated his desire to reduce the property tax burden.

“A lot of us would like to see the aldermen take that vote before we do ours … ,” said Chicago Democratic Rep. Kenneth Dunkin, leader of the Legislative Black Caucus. “We’re starting down here, but there are no assurances the city of Chicago, the aldermen, will follow suit.”

Steve Brown, a spokesman for Madigan, D-Chicago, said Democrats, who hold a supermajority of 71 seats, are still counting votes on the roll call, but he said he didn’t know where it stood.

Yeah, whatever.

I don’t think the Rahm proposal will go very far. It was too fast, and too clever-by-half.

And it didn’t actually fix the problem.

Anyway, Rahm, you were the idiot who decided it would be fun to play in Chicago for a while.

Not even Obama was that dumb.

Compilation of Chicago posts.

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