Thursday, May 31, 2012

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.

5 comments:

Anonymous said...

The link to Forbes doesn't work.

Here it is http://www.forbes.com/sites/jeffreybrown/2012/05/30/three-hard-lessons-from-illinois-public-pension-reform/

Dave Johnson said...

Hey, the unions are trying--they both tried to make a deal (basically accepting *some* cuts in benefits in return for a real guarantee of continued funding) and they are rallying phone calls, letters, etc, and there have been rallies.

The difference with Wisconsin is of course striking. But I suppose the fundamental problem is that we can't exactly expect the Republicans to treat us better than the Democrats, who are screwing us. When no one is on your side, even a minority, you're kinda out of luck.

Mike Bost perhaps managed to make a difference by losing it in the Assembly and helping the Republicans to stop funding being shifted entirely to local districts. But the details are foggy to me, and I bet the GOP would have no problem in shifting funding to universities, as the universities can't raise taxes to pay for it.

Jonathan Bean said...

Anonymous: Thanks for catching it - the link now works (there was an extra space when I pasted).

Anonymous said...

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page "FORBES: "Three Hard Lessons from Illinois Public Pension Reform"". I do have a couple of questions
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it look like a few of the comments come across as if they are left by
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Jonathan Bean said...

Dear Anonymous,

I'm not sure which comments you are referring to but perhaps you could respond to one or two of the ones you think are "brain dead"? Also not sure if you mean comments on this (my) post or the ones on Forbes? I don't see anything particularly "brain dead" but the commentators are responsible for responding to your criticism (I will respond to criticisms of my writing, of course!).

Lastly, I don't give out all my URL addresses (is this a phishing scheme?!). I can tell you I was an early adopter of Facebook but KILLED my account completely because FB is makes one's brain dead (or at least it was numbing my brain with mindless chit-chat. To each his own). I don't have twitter, I do have many blogs elsewhere but you can google and find them.