Illinois’ financial problems originate in pension systems

http://ift.tt/2gZaDpu

The claim that the state of Illinois has financial issues and a dysfunctional government has become a truism to the public in the last few years. Many people point fingers at who is to blame for Illinois’ woes, often seeking a sense of affirmation by tying a century of issues to a single name.

Governor Bruce Rauner has insisted that Illinois’ problems derive from a decade long Democratic stronghold in the General Assembly and, until 2014, the Governor’s office. Many people in the state of Illinois believe him or have formulated their own similar conclusions.

This attitude is not only disingenuous, but it is also flat out wrong. The bulk of Illinois’ financial problems come from government mishandling of public employee pension payment issues over the last 100 years. Yes, 100. Underneath the political rhetoric and campaign tactics, there is a much deeper and convoluted reason for the current state that Illinois is in.

In fact, it can be traced to exactly 100 years ago. A 1917 report evaluated the Illinois pension systems. Their findings — that the current pension systems “‘are inharmonious and often in contradictory with reference to each other, but that with perhaps a single minor exception they are financially unsound and moving toward a crisis.’”

Despite this report, dealing with the impending pension crisis was continually pushed back by lawmakers for the next fifty years. In 1970, an Illinois constitutional convention presented opportunity for the state to reform its unstable pension systems. However, instead of delivering reforms to the systems, the delegates doubled down on the pension payments by making it a part of the Illinois constitution to have payments be made to the pension funds as promised.

Though the pension system was insolvent from the beginning, this decision made in 1970 is the bedrock for the state’s pension problems. They modeled it after New York. But, while it worked for the Empire State, the Land of Lincoln was not as forthright with the payments, and the building pension issue persisted.

 1994 presented another opportunity to contain the growing pension deficit. Republican Governor Jim Edgar proposed a 50-year plan, known as the “Edgar Ramp,” which would be a gradual increase in payments made to the pension fund by the taxpayers with the idea that, by the end of the ramp, the debt would be 90 percent erased. It had bipartisan support, was incredibly politically expedient and was signed into law.

Unfortunately, this plan did not work either, and it is now infamous among Democrats and Republicans alike. The initial payments were made well short of the necessary amount, and an economic recession in the early 2000s made the ramp much more implausible going forward. By the time Rod Blagojevich was sworn into office in 2003, the pension debt had only risen substantially.

Edgar still defends his ramp today, claiming that if the economy was stable, payments wouldn’t have gone under. But that’s hard to believe when they weren’t satisfactory from the start. It’s similar to applying for a credit card and claiming that there’s no need to worry about most of the costs in the future as long as the company’s required minimum payments are made in the now. It’s fiscally irresponsible.

In 2013, the General Assembly and Democratic Governor Pat Quinn made monumental pension reform that greatly reduced benefits and would drive down pension costs. This was then struck down by the Illinois supreme court citing the clause, created by the 1970 convention, that stated contemporary pension funds can not be altered and must be paid as promised.

This was a crucial blow to a genuine attempt to reform pension payments and start filling the cracks of the state’s financial problems. It’s important to emphasize how these issues are not black and white or red and blue but a collective result from the sins of Illinois’ fathers.

Last year, the independent state Commission on Government Forecasting and Accountability said that the pension debt was up to $130 billion — the worst of any state. Though many see the state’s future as bleak as political bickering and in state political conflicts continue, there is light at the end of the tunnel.

In 2011, the General Assembly and Governor Quinn passed reform that greatly reduced pension benefits for those who were hired after the year 2011. This means that, many years down the road, the pension crisis has the potential to work itself out once those employees begin to retire.

This, of course, is not as immediate as some would like, and there should still be measures taken to make up for the pension debt that is going to grow substantially before the 2011 reforms kick in and begin to reduce its size.

But those measures would have to come from cuts to government services and/or more taxes, neither of the which are popular among Illinois voters. And therefore, hard political discussions are ahead for elected officials of each party.

Austin is a sophomore in Media. 

aas3@dailyillini.com

The post Illinois’ financial problems originate in pension systems appeared first on The Daily Illini.

01-All No Sub,02-Pol,03-HL 20,04-Pens 20,12-Coll,16-Econ,22-Talk,HE Blog,HE Coalition

Feeds

via The Daily Illini https://dailyillini.com

October 31, 2017 at 07:08AM

Advertisements
Illinois’ financial problems originate in pension systems

Illinois’ financial problems originate in pension systems

http://ift.tt/2gZaDpu

The claim that the state of Illinois has financial issues and a dysfunctional government has become a truism to the public in the last few years. Many people point fingers at who is to blame for Illinois’ woes, often seeking a sense of affirmation by tying a century of issues to a single name.

Governor Bruce Rauner has insisted that Illinois’ problems derive from a decade long Democratic stronghold in the General Assembly and, until 2014, the Governor’s office. Many people in the state of Illinois believe him or have formulated their own similar conclusions.

This attitude is not only disingenuous, but it is also flat out wrong. The bulk of Illinois’ financial problems come from government mishandling of public employee pension payment issues over the last 100 years. Yes, 100. Underneath the political rhetoric and campaign tactics, there is a much deeper and convoluted reason for the current state that Illinois is in.

In fact, it can be traced to exactly 100 years ago. A 1917 report evaluated the Illinois pension systems. Their findings — that the current pension systems “‘are inharmonious and often in contradictory with reference to each other, but that with perhaps a single minor exception they are financially unsound and moving toward a crisis.’”

Despite this report, dealing with the impending pension crisis was continually pushed back by lawmakers for the next fifty years. In 1970, an Illinois constitutional convention presented opportunity for the state to reform its unstable pension systems. However, instead of delivering reforms to the systems, the delegates doubled down on the pension payments by making it a part of the Illinois constitution to have payments be made to the pension funds as promised.

Though the pension system was insolvent from the beginning, this decision made in 1970 is the bedrock for the state’s pension problems. They modeled it after New York. But, while it worked for the Empire State, the Land of Lincoln was not as forthright with the payments, and the building pension issue persisted.

 1994 presented another opportunity to contain the growing pension deficit. Republican Governor Jim Edgar proposed a 50-year plan, known as the “Edgar Ramp,” which would be a gradual increase in payments made to the pension fund by the taxpayers with the idea that, by the end of the ramp, the debt would be 90 percent erased. It had bipartisan support, was incredibly politically expedient and was signed into law.

Unfortunately, this plan did not work either, and it is now infamous among Democrats and Republicans alike. The initial payments were made well short of the necessary amount, and an economic recession in the early 2000s made the ramp much more implausible going forward. By the time Rod Blagojevich was sworn into office in 2003, the pension debt had only risen substantially.

Edgar still defends his ramp today, claiming that if the economy was stable, payments wouldn’t have gone under. But that’s hard to believe when they weren’t satisfactory from the start. It’s similar to applying for a credit card and claiming that there’s no need to worry about most of the costs in the future as long as the company’s required minimum payments are made in the now. It’s fiscally irresponsible.

In 2013, the General Assembly and Democratic Governor Pat Quinn made monumental pension reform that greatly reduced benefits and would drive down pension costs. This was then struck down by the Illinois supreme court citing the clause, created by the 1970 convention, that stated contemporary pension funds can not be altered and must be paid as promised.

This was a crucial blow to a genuine attempt to reform pension payments and start filling the cracks of the state’s financial problems. It’s important to emphasize how these issues are not black and white or red and blue but a collective result from the sins of Illinois’ fathers.

Last year, the independent state Commission on Government Forecasting and Accountability said that the pension debt was up to $130 billion — the worst of any state. Though many see the state’s future as bleak as political bickering and in state political conflicts continue, there is light at the end of the tunnel.

In 2011, the General Assembly and Governor Quinn passed reform that greatly reduced pension benefits for those who were hired after the year 2011. This means that, many years down the road, the pension crisis has the potential to work itself out once those employees begin to retire.

This, of course, is not as immediate as some would like, and there should still be measures taken to make up for the pension debt that is going to grow substantially before the 2011 reforms kick in and begin to reduce its size.

But those measures would have to come from cuts to government services and/or more taxes, neither of the which are popular among Illinois voters. And therefore, hard political discussions are ahead for elected officials of each party.

Austin is a sophomore in Media. 

aas3@dailyillini.com

The post Illinois’ financial problems originate in pension systems appeared first on The Daily Illini.

01-All No Sub,02-Pol,03-HL 20,04-Pens 20,12-Coll,16-Econ,22-Talk,HE Blog,HE Coalition

Feeds

via The Daily Illini https://dailyillini.com

October 31, 2017 at 07:08AM

Illinois’ financial problems originate in pension systems

Private Colleges Rank High

http://ift.tt/2lxbe32

Six of the ten top universities in Illinois are private schools, largely because graduates earn so much more.

According to consumer watchdog group WalletHub, the top three schools on the list are University of Chicago, Northwestern University and the University of Illinois in Urbana-Champaign. The list is dominated by private schools thereafter. Among them are Illinois Institute of Technology, Wesleyan University, Wheaton College, University of St. Francis, Dominican University and Bradley University.

The rankings were based on student selectivity, cost and financing, and career outcomes.

Click here for summary

WalletHub Analyst Jill Gonzalez said the earning potential of students from private schools shot them above their public counterparts.

“People who attend these private institutions tend to make $20,000 to $ 30,000 more 10 years out than those attending public institutions,” she said. Graduates of the Illinois Institute of Technology averaged $70,000 annually, for instance.

Schools in other states are more even in earning potential, Gonzalez said. New York’s and California’s private school graduates earned similar wages as those who attended public universities.

Gonzalez said the rule of “you get what you pay for” is generally true with Illinois schools, but some, like Bradley University, offer good value because “they’re really middle of the board in terms of financing but have really great career outcomes.”

The University of Chicago ranked first out of the 35 Illinois schools measured.

(Copyright WBGZ Radio / http://ift.tt/19rx5wC)

01-All No Sub,12-Coll,19-Legal,HE Blog,HE Coalition

Feeds,Southern,Metro East

via Alton Daily News News http://ift.tt/1eKjgbR

October 31, 2017 at 12:05AM

Private Colleges Rank High

Merge colleges, update majors to stop students from fleeing Illinois

http://ift.tt/2z0gCRE

Southern Illinois University Carbondale saw its freshman enrollment drop to half of what it was three years ago. That also means less tuition money, atop the state shirking its funding promises.

The new chancellor sees the crisis. Chancellor Carlo Montemagno blames administrative bloat, ossification and red tape for SIUC’s inability to react to the fact that too many prospective students find the university’s offerings to be irrelevant.

“The biggest limitation in our ability to change has been bureaucratic. Artificial boundaries created by the way we count effort and resources,” he said. “In numerous conversations with faculty members, I’ve heard about great ideas to deliver new programs that were stymied by bureaucratic obstruction.”

He wants new programs relevant to the working world that students will enter. He wants to consolidate and eliminate where needed.

But he needs to tame the administration if SIUC is to avoid the abyss.

Across Illinois, college administration grew 26 percent from 2005 to 2015. Instructors and professors grew 2 percent. Enrollment fell 3 percent.

Competition for students is increasing, too, at the same time other states gained Illinois students who were put off by the financial disarray and college grant uncertainty. The University of Illinois is pushing for a 15 percent enrollment increase by freezing tuition and rolling out new programs.

There might be legislative relief in the form of Senate Bill 2234, introduced recently by Assistant Republican Leader Sen. Chapin Rose. U of I is in his backyard.

It seeks reoganization of the state’s higher education system, review of academic programs and integration of community colleges, as well as making the college application process easier online for high school students.

While a Republican proposal that could lead to less government is unlikely to make it out of committee, Illinois’ financial maelstrom requires smart choices.

On the plus side, ignore Carbondale’s plight and maybe Edwardsville will finally emerge as the main campus in the SIU system.

Merge colleges, update majors to stop students from fleeing Illinois

Students give back at Make a Difference Day

http://ift.tt/2yYkGiY

Students give back at Make a Difference Day

Student+participate+in+Make+a+Difference+Day%2C+an+annual+event+dedicated+to+volunteering+andmaking+a+positive+impact%2C+on+Saturday.

Student participate in Make a Difference Day, an annual event dedicated to volunteering andmaking a positive impact, on Saturday.

Jasmyne Taylor/ Courier Staff

Jasmyne Taylor/ Courier Staff

Student participate in Make a Difference Day, an annual event dedicated to volunteering andmaking a positive impact, on Saturday.

Tabi Jozwick, Courier Staff

Hang on for a minute…we’re trying to find some more stories you might like.

Email This Story

Make A Difference Day (MADD) provided students with the opportunity to volunteer in the community for a day of service. The event was a time to make a difference around both the Western Illinois University campus and the Macomb community through volunteerism on Saturday.

 “Saturday was a national day of service,” said Western’s All Volunteer Effort (WAVE) president Taryn Butler. “It is not just us, it’s everyone across the nation who has decided to make a difference.”

 Macomb Mayor Mike Inman welcomed the volunteers to Make a Difference Day and shared a few opening remarks.

 “I can’t tell you how excited I am and proud of the fact that you are here Saturday morning,” Inman said. “I do quite honestly brag about WAVE to the community all the time. This organization has a standing reputation in the community and on campus under the leadership of Ethan Briscoe and all of the volunteer coordinators that worked with getting you together and helping out.”

 Michelle Janisz, Director of Student Activities, also shared her thoughts about Make a Difference Day.

 “As what Butler mentioned, this is a national day of service,” Janisz said. “This is about students and anyone else wanting to volunteer and help someone out in the community and literally what it says, make a difference in someone’s life, organization, whatever it is that they need help with.”

 New this year, instead of going to one site to volunteer, Western students went to two different sites for their volunteer service projects.

 “The reason behind that change was because we wanted to impact the community more,” said WAVE advisor Ricky Boche. “Instead of doing eight sites for two hours, why not split it up into two one-hour sessions and be able to hit more sites, so the idea was to hit 12 or 14 sites in comparison to eight. In the long run, we want to further impact the community and get our WAVE members out to more community service projects.”

 Volunteer services were conducted at Salvation Army, The Crossing, Wesley Village, Country View, Genesis Garden, Mosaic, Wesley United Methodist Church, West Central Illinois Arts Center and the YMCA. Students also stayed on campus to make get — well cards for the patients at St. Jude’s Children’s Research Hospital.

 “There was one project in particular here in town, a shelter for folks and families struggling and that’s Genesis Garden,” Inman said. “I don’t know if you all would be constructing anything there, but they would have a lot of work there for you and it needs to get finalized. The project itself has been struggling for a couple of years.”

 After their time serving both the Western and Macomb communities, students shared their thoughts about the importance of volunteerism and making a difference. Both biology major Mikayla Goodwin and university advising major Lizzy Gonzalo said that making a difference means that they gave back to the community and help those out in need.

“It’s important to be able to reach out and help out those in need because you would never know when you yourself is going to be in need and how volunteers can help you,” said WAVE vice president Mattea Scanlan.

07-SocISTLAdv,12-Coll,13-GBI,HE Blog

Feeds,Western

via Western Courier http://ift.tt/2zSdUuk

October 30, 2017 at 01:52PM

Students give back at Make a Difference Day

UI athletics sets $300 million fundraising goal

http://ift.tt/2iKODiB

Goal is a part of the $2.25 billion overall UI system benchmark

University of Illinois Athletic Director Josh Whitman said the athletics department has a goal of raising $300 million as a part of the school’s overall campaign goal of more than $2 billion.

Whitman announced Monday that the money will go into three different "pillars of excellence": student scholarships, capital projects  and student athlete enhancement.

read more

07-SocISTLAdv,12-Coll,13-GBI,16-Econ,HE Blog,HE Coalition

Champ,Feeds

via News-Gazette.com http://ift.tt/12IJdWp

October 30, 2017 at 12:45PM

UI athletics sets $300 million fundraising goal

Longtime employee joins College of Lake County board

http://ift.tt/2zQMxku

The third-place candidate in the April election was appointed to fill a vacancy on the College of Lake County (CLC) Board of Trustees, according to a press release from the college.

Grayslake resident Julie Shroka replaces former trustee Dr. Philip J. Carrigan, the trustees decided in an Oct. 24 vote. Carrigan resigned from the board for “personal reasons” in September according to the press release, which said Shroka took third place among 25 candidates in the election.

Her term runs until April 2, 2019.

Shroka retired from CLC in June 2016 after working for the college for 30 years, according to the release. She was hired as a student recruiter and later became the director of alumni relations and special events for the CLC Foundation.

Carrigan, who served on the board for more than 10 years, was honored with a resolution given to his wife, Mary Clare Jakes.

“Dr. Carrigan was an outstanding board member with a high degree of integrity and a passion for helping others,” Interim President Rich Haney said in the press release. “He was a very active board member and worked closely with his fellow board members and the administration on projects and initiatives that furthered our student success goals. We are a better college because of his work and commitment.”

In other action, the board created a fund that will be filled with revenue from energy rebates, grants, recycling and savings via energy-efficiency projects. Such savings brought in more than $600,000 during the 2016 fscal year, according to Ken Gotsch, vice president for administrative affairs.

07-SocISTLAdv,12-Coll,HE Blog

Feeds

via Lake County Gazette http://ift.tt/28QpZT4

October 30, 2017 at 11:34AM

Longtime employee joins College of Lake County board