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The League of Women Voters of Evanston heard from four state legislators at its annual legislative luncheon Tuesday at the North Shore Retirement Hotel, including one who summed up the pension financing debacle as having “run out of pixie dust.”

The four speakers included Sen. Jeff Schoenberg (9th Dist.), Rep. Robyn Gabel (18th Dist.), Rep. Daniel Biss (10th Dist.), and Rep. Louis Lang (16th Dist.).

Schoenberg, who is not running for re-election, discussed his win’s and losses during 22 years in the General Assembly, including reaching an agreement between the state and the Village of Northfield that will widen the last mile or so of Willow Road that connects the Edens Expressway with the North-South Tollway.

Schoenberg: The Willow Road project has been ongoing since Ogilvie was governor.

“This is a project that’s been ongoing since Richard Ogilvie was governor,” he declared. Ogilvie served as Illinois governor from 1969 to 1973.

Schoenberg has represented the 9th District since 2003. Previously, he spent six terms in the state  House of Representatives, from 1990 to 2002.

Gabel: An increase in jobs will help the state grow out of its budget problems.

Rep. Gabel said the state will have to grow its way out of its budget problems. Because most of the state’s revenues come from the personal income tax and the sales tax, it is important that ways be found to put more unemployed Illinoisans back to work.

Rep. Biss, who is running for the state Senate post being vacated by Schoenberg, explained that “human beings have trouble making decisions…even for themselves.”

Biss: Legislators have run out of unicorns and pixie dust.

A failure to pay for authorized expenditures, such as pension benefits, he said, eventually caught up with the lawmakers.”

“We’ve run out of unicorns; we’ve run out of pixie dust,” he declared.

Lang: Any pension solution must be constitutional.

Rep. Lang said he will vote for the best solution to the pension problem that is consistent with the state constitution, which says that benefits to existing pensioneers cannot be reduced.

“We cannot and must  not pass legislation that ignores the constitution,” he said, “as it will just be bounced back by the Supreme Court.”

On a more positive note, Lang said that the mess in Springfield is not as bad as the mess in Washington.
“We have bipartisan action in Springfield,” he declared. “We get things done.”
 

Charles Bartling

A resident of Evanston since 1975, Chuck Bartling holds a master’s degree in journalism from Northwestern University and has extensive experience as a reporter and editor for daily newspapers, radio...

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7 Comments

  1. Lang and the others

    Lang sounds like someone who will vote any  way that Madigan tells him to vote. Maybe he should resign or be voted out so that he can start collecting his pension.

  2. It has nothhing to do with Madigan

    This is actually Representative Lang's career work, and has nothing to do with Speaker Madigan.

    It is a tragedy that our governor vetoed the gaming bill yesterday and only further reinforces the notion that he has no idea how to do his job.

    Here is hoping Lang can work the rolls and get enough votes in both chambers to override the veto in November.

  3. Daniel Biss is correct

    Yesterday Representative Daniel Biss said that Illinois has "run out of unicorns and pixie dust."

    Today the Standard & Poors (S&P) credit rating agency downgraded the debt in Illinois from A+ to A and also assigned a negative outlook on our state. The negative outlook is a STRONG and CLEAR message that if our legislators do not address and meaningfully improve our fiscal situation that further downgrades will occur.

    We're now tied with California for being the worst rated state. (Moody's rates Illinois 1 level worse than California, and S&P rates California 1 level worse than Illinois, hence the tie.)

    Why did S&P downgrade Illinois? Read the following press release verbatim:

    "Aug. 29 (Bloomberg) — Illinois, which has the worst-funded pension system among U.S. states, had the rating on its general- obligation debt cut one level to A by Standard & Poor’s and may face more downgrades.

         The change followed state lawmakers’ failure to agree to reduce retirement costs during a special session Aug. 17. The outlook for the fifth-most populous state’s debt, which now has S&P’s sixth-highest grade, is negative. California, with an A- ranking, one level below Illinois, remains S&P’s lowest-rated state.

         “The downgrade reflects the state’s weak pension funding levels and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions,” said Robin Prunty, an S&P analyst, in a report today.

         Illinois has an unfunded pension liability of at least $83 billion, according to state figures. It had 45 percent of what it needed to pay future retiree obligations as of 2010, the lowest among U.S. states, data compiled by Bloomberg show.

         S&P assigned a negative outlook for the state because of possible additional “erosion” of Illinois’s pension funds during the next two years. Individual and corporate tax increases will expire on Jan. 1, 2015, which may weaken financial operating results, S&P said."

    So why should we care if Illinois suffers further downgrades given the interest rates are so low?

    – Businesses see the news and are reluctant to invest in Illinois. Therefore fewer jobs are created.

    – Retirees see the news and decide to "relocate to warmer climates." Illinois not only loses their income tax dollars, but also their sales tax dollars. 

    – Illinois debt costs more money. Before this announcement, Barrons reported that Illinois was paying 1.57% more per year than a Triple A 10 year municipal benchmark. That means Illinois taxpayers are paying $15,700,000 EXTRA in interest per year on every $1 Billion of debt. And Illinois has BILLIONS of dollars in debt, and over the next couple of years it will need to raise even more debt.

    This downgrade is a MAJOR SIGNAL to our legislators and everyone in Illinois, that we need to get our act together. Representative Lang may claim that "the mess in Springfield is not as bad as the mess in Washington." I'm not sure that's a flattering comparison.

    And given his 25 years in Springfield, he's presided over a deterioration in our State. It's time for Representative Lang and others to take real, substantive action.

    Fortunately we have leaders like Daniel Biss who recognize the true gravity of the situation and are willing to tackle these critically important issues.

    But time is running short and there are no unicorns and pixie dust to save us.

    1. $550 million per year and growing

      Today's Chicago Tribune published an editorial and discussed S&P's downgrade of Illinois:

      http://www.chicagotribune.com/news/opinion/editorials/ct-edit-downgrade-0830-20120830,0,4055133.story

      They highlight that it costs Illinois taxpayers an EXTRA $550 million per year in interest expense due to our poor bond rating and fiscal situation.

      And this $550 million "surcharge for poor credit" is just going to grow, and grow, and grow until Springfield passes a credible plan.

      So if you're wondering why services are getting cut, there is a crowding out effect. Interest payments MUST be made by law. You can skip a pension payment, but not interest.

      At the local level we see this crowding out effect as branch libraries get closed, prized assets like the Harley Clarke mansion (Evanston Art Center) may be sold, Cook County is facing growing budget problems, and the State of Illinois is in a very problematic situation.

      The State of Illinois will continue to play "pass the hot potato",  and push costs down to the county and local levels further straining already stretched budgets. The major "hot potato" under discussion right now is pushing the normal pension costs for the Teachers Pension Fund from the State level to the Local level, "saving" the state $800mm but adding $800 mm in costs to local budgets. And there will be other costs pushed down.

      Remember the "temporary" income tax increase sold to taxpayers which raised State Income Taxes from 3% to 5%? This is scheduled to expire in 2014. The politicians were correct when they told taxpayers it was temporary, but what they didn't say is that it was only temporarily at 5% on its WAY UP to 6% or 7% – get ready for this discussion!!!

      Illinois is facing many significant issues which can be solved, but these issues need to be addressed in a frank and honest manner – the prior games played by politicians must end.

      The stakes are too high – $550 million is a lot of money and is causing important services and programs to get cut.

      1. Irony

        And the sad irony is that IL is surrounded by other states in the midwest (Indiana, Wisconsin, Ohio) that have reversed their course and are attaining fiscal health.  All led by Republican governors.

        IL sticks out like a sore thumb and continues to be led by Democrat leaders from Madigan to Quinn, etc.

        And, according to the WSJ op ed "A Downgrade for Illinois", now has the dubious honor of having the worst credit rating of any state besides California; another Democrat led state and stronghold.

        Time for a change Illinois. 

         

  4. Is Robyn Gabel a Genius?

         If the report is true, State Representative Robyn Gabel has channeled market oriented economists. She has stated that the State of Illinois will have to grow its way out of its budget problems, the biggest being the $80 billion dollar public pension deficit. Gosh, why didn’t Gov. Quinn, House Speaker Madigan and Senate President Cullerton think of that? Why didn’t the Civic Federation and the Better Government Association? They are all apparently wasting a lot of time and effort trying to fashion legislation that will modify the current pension plans so that there will be something available for the workers who earned them. But not Gabel (D-Clueless). She’ll let the market do its thing.

        Lou Lang (D-Casino) is older, shrewder and more skillful than Gabel.  He claims that any resolution must be allowed by the State Constitution. Well, that is either a neutral statement (and an obvious one) or it’s another cover for doing nothing, but at least he did not pretend that Illinois can grow its way out of the problem. (And, while there is disagreement in the legal community, many lawyers think that a variety of reforms would pass Constitutional muster.)

         The sad fact is that Illinois’s financial condition is worse than embarrassing. It is ugly. It is adversely affecting real people, as the pension mess is already crowding out funds needed for other programs.

         Even before the summer drought made matters worse, Illinois had the lowest level of net assets in the country. It has been called a Sinkhole State. The taxpayer burden per citizen ranks 48th out of the 50 states. Just moments ago, Standard & Poors lowered Illinois’ credit rating again, specifically because of the State’s unfunded pension liabilities.  Illinois is not likely to grow its way out of its financial hole anytime soon. Nor is the “temporary” income tax hike going to be temporary.

         Gabel may think that she is doing public workers a service by taking the stand she has, but in fact she is being very short-sighted. The longer this problem festers, and the greater the total obligation becomes, the more the risk grows for the workers who increasingly will be relying on promises that angry taxpayers will not, indeed, cannot afford to keep.  Is that fair? Maybe and maybe not. We could spend a lot of energy talking about who duped who and how we got here. But here we are, and pretending that we can simply grow out of the mess is as unrealistic (to put it charitably) as were the votes that enacted some of the now tenuous benefits.

          Shame on the Democrats for nominating someone with such a poor sense of economics, and even less courage. And shame on the Republicans for not putting forward a serious opponent to her.    
     

  5. Gabel

    Any event with Ms. Gabel should include these two questions first:  Did she vote for Mike Madigan as Speaker?  Will she do it again?  She is a Madigan hack with no understanding of financial issues. She votes as directed by Madigan.  Shame on all of us for electing her. 

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