McHenry County Blog

The Southtown has a Phil Kadner column about the negative effects (more later than soon) of shifting the burden of paying teacher pensions from State government to local school districts.

He missed one aspect that some may find significant.  I explain that puzzle piece in the following comment I left under his piece:

Phil Kadner writes, “You paid tax money to fund the pensions. But your elected leaders chose to spend the money on something else.”

The Illinois State Capitol where Democrats plan to shift teacher pension costs to local school districts, which will raise property taxes.

But he leaves out who encouraged the legislators to spend the money elsewhere.It was the teacher union lobbyists.

When I was looking at budgets, there was a section for education.

It was divided into three parts:

1. k through 12
2. universities
3. pensions

The pressure was always to increase State Aid to Education.

The reasoning (not stated publicly, I dare say) was that with higher financial assistance, teacher salaries could be raised, which, in turn, would increase teach pensions.

Kadner’s comments about Mike Madigan’s proposed pension shift deserve wider dissemination.

He points out,

“Chicago finances its teachers’ pension system, the argument goes, and Chicago taxpayers also contribute to the system for teachers outside the city.

“What Madigan and the other Chicago politicians don’t say is that Illinois’ education funding system always has been rigged to shift more money to the city.”

He continues his chain of logic:

“The goal is to spread the cost shift over so many years, 10 to 15, that school districts won’t initially object and taxpayers won’t care.

“The cost initially will be a small fraction of your local school district’s budget. But over time those costs will compound and eventually amount to billions of dollars.

“It’s very similar to the scheme the Legislature used to drive the pensions systems to near collapse.

“By the time the financial crisis hits the school districts, the lawmakers today no longer will be in office. No one will remember who is to blame.”

Here is the first change in the pension law being featured by the Chicago Tribune Sunday on its front page and today on its editorial page.

You’ve perhaps heard about the former Mike Madigan and Shirley Madigan employee who worked less than the eight years required to vest who ended up getting an over $100,000 a year pension based on her final four years of salary as a lobbyist with the Illinois Federation of Teachers.

If you read the following, would you have seen red flags?

(c) An individual who represents or is employed as an
officer or employee of a statewide labor organization that
represents members of this System may participate in the System
and shall be deemed an employee, provided that

• the individual has previously earned creditable service under this Article,
• the individual files with the System an irrevocable election to become a participant within 6 months after the effective date of this amendatory Act of the 94th General Assembly, and
• (3) the individual does not receive credit for that employment under any other provisions of thisCode. An employee under this subsection (c) is responsible for paying to the System both (i) employee contributions based on the actual compensation received for service with the labor organization and (ii) employer contributions based on the percentage of payroll certified by the board; all or any partof these contributions may be paid on the employee’s behalf orpicked up for tax purposes (if authorized under federal law) by the labor organization.

A person who is an employee as defined in this subsection
(c) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to the
System for that employment the contributions specified in this
subsection, plus interest at the effective rate from the date
of service to the date of payment. However, credit shall not be
granted under this subsection (c) for any such prior employment
for which the applicant received credit under any other
provision of this Code or during which the applicant was on a
leave of absence.
(Source: P.A. 92-14, eff. 6-28-01; 93-685, eff. 7-8-04; 93-839,
eff. 7-30-04; 93-1069, eff. 1-15-05.)

Or would it have sounded fair to you.

We’ll publish the roll calls later, but your could call you legislator and ask them before we do that.

Illinois Policy Institute Local Pension Accountability Tour panelists in Crystal Lake were, from left to right, IEA Spokesman Mike Sayre, a District 155 teacher at Harbor Oaks Annex Academy, Crystal Lake Grade School Board President Jeff Mason and Illinois Policy Institute staff member Diane Rickert.

I went to the Illinois Policy Institute’s Pension.  Got there a little late and was pleasantly surprised to discover that it was over an hour after it started.

Mike Sayre

Representing the Illinois Education Association was Crystal Lake High School teacher Mike Sayre.

I waited in vain for him to accept the responsibility his union and the Illinois Federation of Teachers had in helping create the teacher pension mess.

As I thought about it, I conclude he was too young to know what IEA and IFT lobbyists had done over the years to shortchange the Teachers Retirement System.

Although I have written about this before, let me repeat the scenario that went on year after year after year after year.

The Governor’s budget would have “X” hundreds of millions of dollars for education.

Included would be recommendations for K-12, universities and pensions.

As the session went on teacher union lobbyists would ask for more money for State Aid to Education.  In other words, for current salaries.

Where would that money come from?

The pension portion of the education budget.

Concurrently, those same lobbyists would be trying to improve teacher pensions.  Think  early retirement.  (I was astounded that one of my high school classmates who went into teaching was able to retire at age 52.)

The effect?

Higher teacher salaries, which, in turn, led to higher teacher pensions…while the pension fund was being shorted.

So, when Mike Sayre blames the legislators for not paying what they should have over the years, he is partly right.

The part he doesn’t know about is that his union urged those legislators to do what he complained about Tuesday night.

He said the IEA wants a guarantee that the General Assembly will put money into the Teachers Retirement Fund.

It is virtually impossible for one General Assembly to bind a future General Assembly.

It would be like telling future IEA lobbyists not to try to improve benefits for current dues paying members, that is active teachers.

Just trying to parcel out the responsibility for the mess all parties got us taxpayers in.

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On the IEA handout for the event was the following assertion: “The pension crisis was caused by politicians who diverted the pension system payments to other programs.”

What other programs?

State Aid to Education so current salaries could be raised with the assumption that pension payments would take care of themselves. After all the Illinois Constitution says pensions can’t be impaired.

Even I told teachers that for years when they expressed concerns.

The irony in this part of his interview with Governor Pat Quinn is that Neil Steinberg and maybe even the Governor do not know the pension problem is directly attributable to stealing money allocted to pensions in years past to increase State Aid to Education.

Neil Steinberg adds to the pressure to address the public pension mess Monday morning in a column featuring an interview with Illinois Governor Pat Quinn.

There is one part that I found interesting, accurate as far as it goes, but missing the main point.

“The folks who put us in this mess are from both parties,” Quinn said.

He’s got that right.

“Every governor and every session of the legislature, the choice at the end of the year came down to: ‘Do we pay this pensions thing or spend a little bit more money on other things?”

Correct again.

“They always picked now over requiring pension payments. So it got worse and worse.”

The Governor again speaks truth.

But not the whole truth.

Each year I remember the Governor’s budget would allocate so much for education.

It would be broken down into State Aid to Education, university subsidies and pension payments for those employed in higher and lower education.

Each year, the teachers unions–I’m talking the Illinois Education Association and the Illinois Federation of Teachers–would come in and argue that the pension money would be better spent “NOW,” to put it in the Governor’s word, on State Aid to Education.

Tomorrow would take care of itself was the implicit message.

Since those still employed as teachers or professors or support personnel were so much more influential than the retired folks, the money was allocated by General Assembly after General Assembly for current expenditures, rather than future pension payments.

Hard to criticize the political sense of the judgment at the time, because most of the representatives and senators voting for the budgets wouldn’t be around to pay the piper, so to speak.

But doing so had more than political advantages for incumbent legislators running for re-election.

Sending extra money to local schools had the unintended effect of increasing the pension burden on state taxpayers.

At the risk of pointing out the obvious, higher teacher salaries meant higher teacher pensions.

Having said pointed that out, I remember thinking time and time again that I might be around to have to figure out how to pay for extravagant programs.

That was before I voted, “No.”

Maybe someone can find someone who voted against more budgets than I over the 16 years I served in the General Assembly, but I doubt it.

At this point, it would be appropriate to remind readers that I receive a legislative pension, but one that was not hopped up by having a post-GA job at a higher salary than I received as a state representative. Because of the 3% annual so-called “cost of living” increase–which is a flat rate not based on inflation–my pension is substantially higher than my final salary in the Illinois House of Representatives in 2000.

I remember voting for only two pension bills. One was in the second year of my first term that affected the General Assembly pension system. I remember asking the legendary C.L. McCormick from Vienna what it was all about. He told me not to worry about it and I voted in favor.

That was the favorable last pension vote I remember until a McHenry County Judge called me in the 1990′s about supporting a bill that would put his bifurcated judicial service on an equal footing with those who had only served as a judge. He had been an Associate Judge after serving as Assistant State’s Attorney, gone into private practice and returned to the bench to finish his career.

And here’s the public unions’ response:

The "We Are One" union pension protection web site's masthead. "Don't let the politicians cut public employee's pensions," reads the headline.

We Are One Illinois statement on Quinn news conference

Responding to Gov. Pat Quinn’s news conference on pensions held Friday, April 20, Illinois AFL-CIO president Michael Carrigan issued this statement for the We Are One Illinois coalition of unions that represent public employees:

The unions representing public employees are committed to working with Gov. Quinn and the members of the General Assembly to find a solution to the pension funding crisis caused by the state’s failure to pay its share.

It is crucial that the pension problem not be compounded by an unconstitutional solution that is unfair to public employees who have always paid their share. The average public employee pension is just $32,000. Because most public employees do not receive Social Security, this modest pension is their life savings.

Despite the willingness of the unions to engage in substantive discussions, our organizations were not asked to be part of Governor Quinn’s pension working group. We were invited to just four meetings and only a few days ago received any data by which to judge its proposals.

We strongly disagree with the proposals made today. Considering that the subject at hand is the ability of hundreds of thousands of Illinoisans to support themselves in retirement, we believe the proposals are insensitive and irresponsible.

By appearing to endorse these unfair and unconstitutional cuts, the governor has made the process of finding common ground much more difficult.

Forcing public servants to choose between two sharply diminished pension plans is no choice at all. It is a clearly illegal attempt to solve the problem caused by past governors and the legislature solely on the backs of teachers, caregivers and other public workers.

Public employees must be treated and heard as full partners in any substantive discussions. No one has a greater stake in solving the problem than we do. A serious problem deserves a serious effort at a solution. The unions are ready.

A press release from State Rep. Kent Gaffney:

Legislation to end pension abuses sent to Governor

Springfield, IL… In response to numerous WGN and Chicago Tribune probes into fraud and abuse of Illinois’ public pension systems, the Illinois General Assembly passed legislation Tuesday aimed at closing pension loopholes and ending the abuse of the pension systems. State Representative Kent Gaffney (R-Lake Barrington) co-sponsored and voted for the pension reform bill.

The State’s pension loophole stems from a law passed in 1991 that bases the city pensions on the labor leaders’ union salaries as opposed to the lower salaries they had as city employees. A Chicago Tribune/WGN-TV investigation unveiled 23 retired union officials from Chicago who will collect about $56 million from two city pension funds.

Kent Gaffney

“There are people out there who abused loopholes in the pension system and those loopholes need to be closed,” Gaffney said. “Fraud and abuse should never be tolerated in any form of government. To take advantage of a pension system that is already teetering on failure is simply inexcusable.”

Another Chicago Tribune/WGN-TV investigation found that two lobbyists with no prior teaching experience were allowed to count their years as union employees towards state teacher pensions after subbing for a single day in 2007.

Steven Preckwinkle, the political director of the Illinois Federation of Teachers, and fellow IFT lobbyist David Piccioli were the only people who took advantage of a small pension window opened by state lawmakers just a few months earlier in 2007. Preckwinkle and Piccioli could collect nearly $3 million in pension payouts, based on their union salaries and years of union credit.

“These two IFT officials were lobbyists masquerading as teachers,” Gaffney said. “They gamed the system by taking advantage of a pension loophole allowing them to receive a teacher’s pension after subbing for just one day in the classroom. That’s a slap in the face to hard working teachers across Illinois. I’m glad to join my colleagues in voting to stop these egregious abuses of the State’s pension system.”

The legislation, House Bill 3813, will reform these pension loopholes by:

•  Prohibiting union officials from earning a pension based on their union salary, rather than their public salary. For all leaves of absence and service credit earned while employed by a union going forward will be based on the salary the employee had before the leave of absence.
• Ending Union Official Double Dipping

• Reporting fraudulent activity to the State’s Attorney
• Retroactively repealing the IFT lobbyists’ pension “window”

House Bill 3813 passed the House on a Concurrence vote of 108-4-1 and will be sent to the Governor for his signature.

The bilboard on Route 47 last fall that sent Jack Franks up the wall.

Regular readers may remember my extreme disappointment with liberal Democrat Jack Franks’ vote to sentence poorly-educated Chicago children to more of the same.

Chicago Pastor and State Senator James Meeks got a bill through the State Senate that would have offering an alternative.  A variation of a voucher system in which parents of kids in failing schools would be able to take some money misspent now and use it to enroll their children in other schools where they hoped the education would be better.

The Chicago Teachers Union (which controls the Illinois Teachers Federation or IFT) didn’t manage to beat the bill in the Senate, but they killed it in the Illinois House…with Jack Franks’ help.

Now, with the announcement of his retiring from politics, Pastor Meeks seems to be saying that he tried the world’s way and it didn’t work.  Maybe he’ll start a private school at his church.

The bill, by the way, would have saved state taxpayers about $240 million a year.

But Jack Franks voted, “No,” anyway.

He went with the Illinois Federation of Teachers union, instead of what he should have  known was the right thing to do.

He got no heat for this disappointed vote from anywhere but McHenry County Blog to the best of my knowledge.

There are some local politicians whom the county’s newspaper of record, the Northwest Herald, make look good.  No doubt about that.

More recently the IFT lobbyists who were undoubtedly whispering in Jack Franks’ ears were caught with their hands in the Downstate Teachers Retirement System Fund.

Pretty indefensible.   One was going to get over a $100,000 a year for having substitute taught ONE day.

Jack Franks got publicity for his efforts to end the pension abuse of the IFT lobbyists whose advice he followed on Sen. James Meeks' school choice bill. The Chicago Federation of Teachers controls the Illinois Federation of Teachers.

So, what does Jack Franks do?

Like a fighter jet under attack, he tossed chaff out to make sure he doesn’t get brought down.

He attacks the IFT’s lobbyists’ pension abuse.

What nobody bothers to ask is,

“Why?”

Could it be because State Representative Jack Franks has gotten a lot of money from teachers’ unions over the years?

Of course not.

There is never any connection between the way a legislator votes and the contributions he or she receives, is there?

But after you look at the campaign contributions that Jack Franks has received over the years, you might want to ask him why he voted to poor mainly black and brown students in the Chicago school system to a continuing subpar education when he could have done something about it that would have saved $200 million a year and not hurt anyone in his legislative district.

$78,150 from the IFT and its local affiliates.

Anybody wonder why Franks sold out Chicago children or why he threw the IFT lobbyists under the bus, so to speak?

Nothing but greed, combined with no morals, can explain how teacher union lobbyists can think of accepting a pension larger than those teachers receive for one day of substitute teaching.

It wasn’t the lead story on the front page of Sunday’s Chicago Tribune, but it certainly could have been.

Two teacher union lobbyists stand to get pensions larger than teachers–as a retired teacher pointed out to me as I was planting daffodils this afternoon–by substitute teaching for ONE day.

Illinois Federation of Teachers lobbyists

• David Piccioli and
• Steve Preckwinkle, have you no shame?

Have you no morals?

Is your taking advantage of this Teachers Retirement Fund loophole that seems to have been passed only to benefit you a reflection of how perfidious your representation of the Chicago Teachers Union and other IFT affiliates have been for the past thirty or so years?

I think my standard operating procedure of voting “No” on almost all pension bills the sixteen years I was in the Illinois House was probably a good idea.

What Preckwinlke and Piccioli did is even worse that taxpayers being forced by state legislation to pay National Education Association (and before than Illinois Education Association) President Reggie Weaver getting a huge pension. At least he taught in Harvey.

= = = = =

Here’s the House roll call on Senate Bill 35.  All Senators voted for the bill.

Locally, Democrat Jack Franks and Republican MikeTryon voted for the bill. Republican Bob Churchill opposed it. Mark Beaubien did not vote.

The third floor is where the legislature meets. To the rigth in this photo is the House Chamber, to the left the press room.

We are in this mess because over the years Governors have proposed X amount of dollars for education.

Usually a couple of hundred million dollars.

When the discussions of how to cut up that amount took place, current salaries won over future pensions.

That’s what the Illinois Education Association lobbyists said they wanted.

If it made that powerful group with its big Political Action Committee happy, legislators were happy.

This was a win-win for the teachers’ unions.

They knew the state constitution would require the General Assembly to come up with the pension money.

And, with the larger share going to State Aid to Education that originally planned, not only would their members salaries be higher, but their pensions would increase.

Here’s the email from the Illinois Federation of Teachers.  Note the false characterization of  the proposed income tax hike as “approximately 2 percent.”

Tell Your Lawmakers to Support Revenue

for Education and State Services

Support Revenue for Education and Public Services

Contact your lawmakers today!

The governor and legislative leaders are discussing proposals to increase the state income tax by approximately 2 percent [emphasis added].

Public education and state services have already suffered cuts, and the state’s $15 billion deficit will force additional severe cuts if lawmakers don’t act soon.

Lawmakers are also expected to vote to allow a constitutional amendment that would slash funding for education and state services with drastic spending limits. (House Joint Resolution Constitutional Amendment (HJRCA) 61 — aka TABOR, or the Taxpayer Bill of Rights).

Had this amendment been in place this decade, budget experts at the Center for Tax and Budget Accountability estimate that spending limits would have forced the General Assembly to make massive additional cuts — between $4.5 billion and $ 7.8 billion — in Fiscal Year 2009.

Additionally, legislators are likely to vote on a proposed constitutional amendment requiring the legislature or any local unit of government to pass pension changes with a 3/5th majority. The legislation would also require local school boards to hire new employees and to approve contracts by a 3/5th majority instead of a simple majority.

This legislation isn’t needed. Currently, under public Act 94-004, any new pension benefit is required to have a dedicated revenue stream to fund it. The same law also requires any new pension benefit to expire after five years. Fiscal accountability for pensions is already in the law.

Please act now. Contact your lawmakers today and tell them to:

• Vote for a permanent tax increase of at least 2 percent to preserve education and vital public services [emphasis added].
• Oppose the so-called Taxpayer Bill of Rights (TABOR) plan that would place constitutional limits on state spending and force local property tax increases.
• Oppose legislation that would propose a constitutional amendment requiring the legislature or any local unit of government to pass pension changes with a 3/5th majority.

Illinois Federation of Teachers.
500 Oakmont Lane
Westmont, IL 60559

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Of course, taxpayers can call, too.  The main switchboard is 217-782-2000.  Just ask for your legislator’s office.