FORBES: "Three Hard Lessons from Illinois Public Pension Reform"

I've been reading a lot about the gutting of the Illinois pension (my head hurts!). When I arrived here in 1995, I saw there was a constitutional guarantee and Madigan (who was there at the Con Con in 1970) said that the guarantee was "ironclad."

Flash forward to 2011. Unions occupying Wisconsin's assembly, Wisconsin Democrats fleeing the state -- it is a "fight to the death."

Then 2012, the Democrats' turn in Illinois. No occupation of the assembly. The unions will continue to get their members' dues--unthreatened by Madigan--and say "we will take this to court." If Wisconsin was a heat index at the level of 100 out 100, the heat from IEA, AFSCME, et al. is registering closer to 3-5.

(Yes, I know the differences between the issues in Wisconsin and Illinois but the pension reform in Illinois is arguably far worse. Besides, it is a matter of registering a reaction proportionate to the threat. I just can't take the IEA seriously any longer).

But enough useless ranting. One of the best pieces on the lessons learned this year is from Forbes. I encourage readers to pore over it. The root problem is "you can't sue the bastards" if the SOBs are in government, Yes, there will be lawsuits. Yes, they might win on one or two issues (I doubt). But we are living in the Clintonesque world of "what is 'diminish' or 'impair'?

And what about taking away benefits so major that you indirectly diminish the pension "guarantee"? They call this political action "crosscutting requirement." Think of the federal government forcing all states to adhere to a drinking age of 18. Ultimately, it is up to the states to write their own laws but Uncle Sam says "you may write your own laws but we take away highway funds. . . "

So keep your pension but lose retiree health care and future pension raises don't count toward retirement formula. (The latter is really beyond belief: if you are in your 3d year working for Illinois, then your final retirement formula is based not on the next 35 years of raises--including built-in inflation--but on a salary you earned 35 years earlier?!).

Democracy (small "d") is broken. More important, rule of law is gone, baby, gone. Welcome to post-constitutional America.

Capitol Fax: Blogger and Journalist Rich Miller Roasted

If you want to keep up on Illinois news--the Springfield loop, especially--Rich Miller's CapitolFax.com is "must reading." As an indication of his prominence, the Illinois political elite roasted Miller on his 50th birthday.

To keep up on pensions and all the other news in Illinois, read capitolfax.com

Pension News Update: Plans in the Air

Legislative action may be delayed until May or even after the November elections but pension reform is in the news again:

State senate majority leader Cullerton has been the strongest defender of the constitutional guarantee of pension. Nevertheless, he seeks a way out of the state's current obligations. One proposal is to eliminate the compounding of cost-of-living adjustments (COLAs). 

Another measure would shift the responsibility to pay the employer portion from the State to local school districts.

The U of I's "Institute for Government and Public Affairs" (IGPA) has issued a "hybrid" plan that amounts to a substantial gutting of the state's current obligation to state employees. Costs would be shifted to employers (like SIU), benefits drastically reduced but, hey!, we employees get to contribute 4% to a 401k style program on top of our radically reduced defined-benefit plan. I read the entire proposal and figured it would take me 54 years rather than 30 to reach 80% of my final salary to retire on.

I will be 87 at that time. Or dead. Whichever comes first.

When to Quit Your Job: Sound like SIU?

Each Sunday morning, the Chronicle of Higher Education sends me a weekly email listing feature articles. The article "When to Quit Your Job" caught my eye based on the summary about an institution that never seemed to improve no matter how hard we all try.

It isn't a perfect fit (my department is fine and my chair isn't a horrible boss but perhaps people have horrible bosses higher up?).

I am not saying "this is SIU!" I am saying "some of it hits home." Perhaps it hits home with people at any school. I'll let you decide.

SIU President's Salary, Then and Now (1925-2010)

Long ago, the University Archive of Morris Library photocopied for me the Great Depression reports of the Southern Normal president and the Board of Trustees, 1929-1942. I was looking them over as I prepare lectures for my "Great Depression" course (HIST 364).

Each year they listed "annual salaries," including that of President Henry W. Shryock. For trivia purposes, he earned $7,500 in 1925. According to the "How Much is that Worth" calculator, the venerable President earned the following in 2010 dollars:

If you want to compare the value of a $7500 Income or Wealth , in 1925 . . .

economic status value of that income or wealth is $449,000.00
economic power value of that income or wealth is $1,200,000.00

And, if you wonder how you compare with the world, check out the Global Rich List. Turns out I'm in the top 1% of the world's income earners. (It only takes $50K to make the top 1%).

FYI.

Administrative Bloat: "The Coming Assault"

Over at National Review's "Phi Beta Cons" there is this short post (excerpt only) discussing Benjamin Ginsberg's The Fall of the Faculty: The Rise of the All-Administrative University:

"The raw numbers contained therein tell the story. “Forty years ago . . . the efforts of 446,830 professors were supported by 268,952 administrators and staffers. Over the past four decades, though, as the number of full-time professors increased slightly more than 50 percent . . . the number of administrators and administrative staffers employed by those schools increased by an astonishing 85 percent and 240 percent, respectively.”

"Although administration has burgeoned at both public and private institutions, the lion’s share of the growth has taken place in the latter."

Here is a critical review of the book (and its wider context) by NAS president Peter Wood (disclosure: I am an officer of the NAS).

HT: Glenn Ricketts