Wheeler Report – Part 2

State Rep. Barb Wheeler wrote a long piece about the last week of the regular session in May. It was too long to publish at one time.  Here is the second portion.

Chicago – Pensions

Democrats attempt to kick Chicago’s pension troubles down the road.

Once again, Chicago asked the Illinois General Assembly – and, indirectly, asked the taxpayers of Chicago and neighboring communities – for pension help.

With junk-bond interest rates topping 5.8% and a deadline looming to make a mandatory $549 million payment to underfunded Chicago police/firefighter pension plans, the City advanced SB 777 to stretch out its payments to these funds. The mandatory 2015-16 police/fire payment would be reduced by the measure from $549 million to $330 million.

House Republicans opposed SB 777, pointing out features in common with previous legislation from majority Democrats that kicked Chicago’s pension troubles down the road.

One key feature of SB 777 was a provision that pre-commits future cash flow from a hypothetical future Chicago mega-casino to these police/firefighter pension payments. This placed the City of Chicago in an unusual situation, as it is expected to soon be asking, in presumptive good faith, for casino rights even though they will already have relinquished much of their financial incentive to get a positive response to their request.

In addition, SB 777 could not be plausibly presented as a measure that “solves” Chicago’s pension crisis. The Chicago Public Schools (CPS) are required by a parallel law to make a $634 million contribution to the teachers’ pension fund that must be transferred no later than June 30.

SB 777 was approved by the House on Saturday, May 30, on a vote of 65-45-2. The measure was returned to the Senate for a concurrence vote, but was then held up by a “Motion to Reconsider” filed by the office of Democratic Senate President Cullerton.

Concealed Carry

Concealed carry trailer bill approved by bipartisan majority in both houses.

Handgun St of IL seal behindSB 836 responds to concerns raised by Illinois firearms owners and law enforcement.

It creates a protocol to govern law enforcement or public safety stops of citizens, such as traffic stops, when the citizen is armed with a concealed firearm. The bill authorizes a citizen to move a concealable firearm from a concealed location on his or her person to the trunk of a car or truck, and vice versa. The measure clarifies that obeying the laws contained within the Concealed Carry Act shall protect a citizen from being cited or arrested for unlawful use of a weapon.

SB 836 was supported by many lawmakers of both political parties. State Rep. Ed Sullivan, a chief co-sponsor, was the lead negotiator of SB 836 for the House Republicans. Approval by both houses cleared the pathway to send this measure to the Governor for his signature.

Criminal Law – Cannabis

SB 1747 – Omnibus criminal law bill; cannabis.

Yet more partisan shenanigans held up approval by the General Assembly of an omnibus criminal law update bill for spring 2015. SB 1747 had been extensively negotiated by representative from both sides, with participation from prosecutors and law enforcement officials.

Unfortunately, the product of this participative process was not brought before the Illinois House for a vote. Instead, language was added to the measure to seal certain court records related to cannabis offenses from public disclosure. The additional language, which can be found on page 27 of House Amendment #5, created serious concerns for employers. In many cases, employers are bound by their contractual relationships with other businesses, and by the terms of their workers’ compensation liability insurance policies, to look closely at the status of their employees and contractors on issues like these. SB 1747 was re-referred to the House Rules Committee.


Wheeler Report – Part 2 — 4 Comments

  1. The only ironclad long term way out of this pension mess is to repeal in its entirety the pension sentence that was added to the Illinois State Constitution in 1970.

    If it takes 5, 10, 15, 20, 25, 30, 35, 40, or 45 years, so be it.

    It’s been 45 years since it was added.

    Maybe it will take 45 years to repeal it.

    But once that conversation starts, maybe more people will begin to understand all the complications caused by that sentence.

    Because not nearly enough people get it now.

    Kids and everyone should memorize the sentence.

    That’s the sentence that they will be paying for through taxes.

    “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    40 words.

    All kinds of games were played just because there was a pension guarantee, and because there was a guarantee one way or another the pensions would be funded and paid, not now, but later.

    Call it a pension float.

    Legislative pension benefit hikes, salary hikes, all kinds of promises and expenditures were possible because of the guarantee.

    The pension mess makes the tea tax in the 1700’s child’s play.

    Who would have guessed 25 years ago Chicago would propose building a casino to fund pensions.

    Well they also get construction jobs to build the casino which will buy them construction labor votes, and union jobs to operate the casino will buy them more public sector service union votes, and union jobs to maintain the casino will buy them more union votes, but Rahm said the city profits would be dedicated to fund pensions.

    “Emanuel has been calling for a city-owned casino for years, and in recent months has said the proceeds would go into city pension funds.”

    So now we are going to fund hiked public sector pensions on the backs of gambling addicts, amongst others.

    And the pensions were hiked through salary hikes and legislative benefit hikes.

    The 1970 pensions are vastly different than 2015 pensions.

    That was the result of the 1970 pension constitution sentence.

    Hiked pensions.

    Not better funded pensions.

    The sentence did not work.

    Get rid of it.

  2. Here’s some more bad pension news.

    Transparent California Blog

    Nobel Laureate: Public Pensions are a “Disaster” and Rely on “Idiotic” Accounting

    June 4, 2015

    by Robert Fellner


    The article includes conversation regarding the discount rate.

    What is a pension discount rate?

    Most people don’t know.

    Time to learn.

    Pensions for Dummies (politicians preyed on taxpayer dummies when passing pension legislation, intentionally or otherwise).

    They didn’t fool taxpayer dummies once or twice.

    They fooled taxpayer dummies for 45 years.


    Oh well, better late to learn than never.

    Academy of Actuaries

    Issue Brief

    Measuring Pension Obligations: Discount Rates Serve Various Purposes


  3. Extending the pension theme to debt.

    Taxpayers should be concerned about overlapping debt and unfunded liabilities at all levels of government (Federal, state, county, local).

    In other words stack them all up.

    In other words, taxing districts are primarily concerned about taxing district health.

    Taxpayers should be primarily concerned about taxpayer health.

    Not that one shouldn’t be concerned about the other as they are interrelated.

    So the overlap is for example, how much debt is attributed to me on my property tax bill from each taxing district, how much debt is attributed to me based on my state income taxes (state government), and Federal income taxes (Federal government).

    That’s different than per capita.

    We should primarily be worried about per taxpayer, as taxpayers are the ones that government has deemed can afford to pay the debt.

    That gets pretty detailed.

    Here is some information on the Federal Debt.

    “The next president faces a daunting fiscal situation. If he or she serves two terms, the next president will see debt held by the public grow by over $7 trillion, rising from $14.4 trillion in 2017 to approximately $21.2 trillion in 2025 unless changes are made.”



    Once you start stacking up the debt and unfunded liabilities at all levels amongst taxpayers whom are actually paying down the debt, a fairly frightening picture emerges.

    That’s overlapping debt and unfunded liabilities at the taxpayer level.

    One of the worst aspects about pensions is there are so many assumptions and games that can be played, not to mention health science and medicine is increasing life expectancy.

  4. Mark, you are awesome.

    But your comments are too long.

    Be more pithy, PLEASE.

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