The power point Gov. Rauner has been presenting in the last week, and which is likely to be a part of Wednesday’s “State of the State” address to the General Assembly, contains a lot of misleading and incorrect information.
Veteran statehouse reporter Doug Finke identified one of the howlers among the 40 slides:
The slide Rauner uses purports to show the amount an “average” state worker puts into his pension plan and the amount that he can expect to collect if he lives 20 years after retiring. The starting point is a state worker retiring this year with an average career salary of $38,979. Note here that there are five state-funded pension systems covering downstate teachers, university workers, state employees, lawmakers and judges. The slide only applies to a state worker. We think. Questions about the slide put to the Rauner administration went unanswered.
This slide has been a key talking point for the anti-pension forces, including Gov. Rauner and his allies in the Illinois Policy Institute. It is intended to enrage the public by claiming that a retiree contributes only $40,539 to his pension benefits over a 26-year career and is likely to collect $821,588 in retirement benefits.
As the union coalition has been pointing out for years, this isn’t a logical or factual claim. And Finke calls it out:
Here’s the thing: None of the state pensions is based only on employee contributions. There’s the employer contribution from the state, assuming the full payment is made as it’s supposed to be. And there’s investment income. That pension money isn’t put into a jar and buried on the Capitol grounds until it is needed. It’s invested and earns a return. With these types of pension plans, when it comes time to pay benefits, most of the money, on the order of 70 percent, is supposed to come from investment income. Add the state contributions and investment income to the mix, and the difference between what comes into the pension plan and what is paid out in benefits isn’t as stark.
Read the entire Finke column and remember this when people start telling you that Gov. Rauner makes a good case. He hasn’t and he can’t.
The pensions were underfunded by the state, which used the pension money to pay for other spending. That’s why we have a budget problem and why revenue is needed to fix it.
Even before he was officially running for governor, Bruce Rauner was blasting state employees for being “overpaid.” In his November, 2012 Chicago Tribune op-ed, “Government unions and the downfall of Illinois,” Rauner wrote that government employee unions, by participating in politics, were engaging in criminal activity that was unfair to the people of Illinois:
It is a system that allows union bosses to bribe politicians with massive political support in exchange for salaries that are 23 percent higher than in our neighboring states, and even higher still than in the private sector, with stunningly generous pension benefits that allow government employees to retire with higher pay for the rest of their lives than they got while working. If this sort of bribery occurred in private business, people would go to jail. In Illinois government, it’s standard practice.
Rauner returned to this anti-union theme in presentations in Decatur and Champaign in recent days, at the same time that he was naming new department heads and aides and paying them more than Gov. Quinn paid those who held those positions previously.
The Republican has blasted Illinois’ spending and state worker salaries as excessive. However, a review by The Associated Press found annual salaries of ten top employees in his administration far exceed those of comparable aides to former Gov. Pat Quinn by roughly $380,000 — or 36 percent. The increases ranged from 11 percent to 94 percent. “The people we’re bringing into our administration, most of them are taking significant cuts compared to what they were making on the outside,” Rauner said ahead of the groundbreaking of a charter school in Chicago. “I pay what it needs to for the talent that we’ve got.”
Interesting. So, the difference is that these are HIS people.
One of the appointees was Springfield attorney Don Tracy, who was named Chair of the Illinois Gaming Board.
If you listened to your radio during the campaign for governor, you might have heard Tracy’s ads blasting Gov. Quinn and promoting Bruce Rauner’s policies, including the dubious claim that Gov. Rauner would protect state employee pensions. Tracy apparently spent $100,000 of his own money for this “independent expenditure.”
The gaming commission is probably a good landing spot, as Tracy seems to know something about return on investment.
So, to summarize, when unions invest their resources in politics, it’s a crime. When a new governor’s supporter invests a hundred grand to boost the governor’s campaign, they get rewarded with a state job and status. And a pension.
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2/1/15 State Journal Register editorial: Rauner driving wedges instead of building bridges