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Chris Lauzen: Illinois Budget Still Crazy After All These Years

Letter to the Editor: "It breaks my heart that years of executive mismanagement of the budget ... have led us to such dire choices."

Senate Bill 1313 requires state employees, both current and retired, to contribute to their healthcare insurance. Although this mandate seems practically necessary to those who are employed in private industry and to those who are unemployed, among state government workers it is controversial.

Many state employees are naturally upset by my vote in favor of SB1313. I cut my own pay, as well as all members of the General Assembly, by 5 percent two years ago and have sponsored legislation toeliminate pensions for senators and representatives before we even considered asking other state employees to contribute to their healthcare insurance benefit. It's cold comfort to those employees affected that politicians are covered under this same law.

The Blagojevich and Quinn administrations along with their enablers in the General Assembly have bankrupted the state over the past decade, as you already know. They have raised our income taxes by 67 percent, driven hundreds of employers and thousands of jobs to other states, begun to cut social services including homeless shelters and early childhood learning, and now they're talking about multibillion (with a B!) dollar cuts to Medicaid and public employee pensions. Who votes for thesefolks?

There were legitimate arguments to vote "No" against cutting state employee healthcare benefits, i.e. "a promise made should be a promise kept," "this is an earned but deferred portion ofcompensation," "if we didn't give away corporate welfare (which I debated against and voted 'No') to the likes of Motorola and Sears, we could pay for these costs." "they're expecting us to 'trust' the governor's Central Management Services (CMS) and Joint Committee on Administrative Rules (JCAR) going into the future," etc.

However, the arguments to vote "Yes" were even more compelling, if not also more desperate. This liability is growing at more than a 25 percent annual compounded rate, according to the unbiased, non-partisan Commission of Government Finance and Accountability. Last year the cost was $680 million; this year it is $880 million; and, next year it is projected to exceed $1 billion. We are one of only two states that still have this level of benefit.

We were told in Senate debate that 90 percent of our retirees make no contribution to health care ... although I think I have been called by every person in the 10 percent. You know that non-publicly-employed neighbors don't receive this valuable subsidy.

Some areas of the state government are simply out-of-control in awarding this benefit and they must be reined in, e.g. we were told that in SURS (the universities) and the General Assembly folks receive life-time free health insurance after only four years of service, and judges after six years. If this had been the narrow definition of the entire problem, the simple solution would have been to correctonly these excesses.

I don't trust the people whom the majority of our neighbors and friends in Illinois have elected to run this state, but they attempted to assure us in the "structure" of the plan of now requiring a contribution to health insurance premiums, as most other employers require. Illinois is Democrat-run, this legislation is Democrat-sponsored, and certainly Illinois is biased toward organized labor. Rather than written in statute, this benefit is now to be "collectively-bargained" through negotiation.

Another check-and-balance is that, after the Governor's Office through Central Management Services negotiates the amount of the employee-retiree contribution, it must go back to the Joint Committee on Administrative Rules, where legislators have another shot at stopping an excessive amount. I recognize, as I see your eyes roll, that none of these institutions have covered themselves in glory in the past ... nor most likely will sparkle to our satisfaction in the future.

However, the decisive argument for taking even imperfect action, was that doing-nothing onbenefits, pensions and Medicaid eligibility will inexorably lead to the collapse of the entire state.

It breaks my heart that years of executive mismanagement of the budget and General Assembly acquiescence—about which you know I have kicked and screamed—have led us to such dire choices. However, just like in your own life, my first responsibility is to do my duty on your behalf ... and then meet the consequences.

I understand how disappointed state employees are with my decision. I also fully appreciatehow angry most taxpayers are with the nearly-doubling of our income taxes in 2011 which I opposed. Actually, there's a lot more austerity pain coming, at both the state and county levels, and the Federal Government has not even begun their necessary cuts.

I respect the work of our state employees whether they serve us in Corrections, Transportation, or Social Services. However, benefits paid in the public sector must be balanced to those in private industry, especially as state government wages have been increased to par over the past decade.

Chris Lauzen
25th District state senator

Joe Friday May 27, 2012 at 07:03 PM
One sympathizes with Senator Lauzen. He has to balance his rhetoric so it appeals to his teabagger constituents with the reality of 2+2=4, but something must be explained to him. If you are an employer and you decided to not send the employer's share of FICA to the IRS, you would go to jail. How many Illinois legislatures are going to jail for that? So we should have “ benefits paid in the public sector must be balanced to those in private industry”. Well actually, the retirement benefits paid to state University employees is less generous than those paid at IIT or the University of Chicago. Plus which private industry are you talking about? Right, poor Jamie Dimon only received $12.6 million of stock bonus, down from $17.1 million. Our society consists of poor people being sucked dry by rich people with Senator Lauzen doing his part to be an enabler.
Angela Kane May 28, 2012 at 12:27 AM
That "teabagger" comment is just a liberal trying to demean the movement that asks that government live within its means and follow the US Constitution. Grow up buddy. University of Chicago is a PRIVATE institution as is Chase Bank that Jamie Dimon leads. They have the right to charge whatever they want and pay their people whatever they choose. PUBLIC institutions live off taxpayer dollars and that money should be spent wisely and carefully. If you don't understand the difference you should try a basic dictionary and just maybe stop watching left leaning media that refuses to adhere to any journalistic standards.
Adam Smith May 28, 2012 at 01:16 AM
Please learn to read. Senator Lauzen was the one who is suggesting that " benefits paid in the public sector must be balanced to those in private industry, " If that is the case, the public universities should be paying more.
Angela Kane May 28, 2012 at 01:38 AM
Yes, I got that but I was responding to the comments made by Joe Friday, so Adam Smith--please actually read what I had to say. And if you have something to say please have the courage to use your real name--not that of a Scottish economist who died in 1790. Sen. Lauzen has long advocated government employees be paid an honest wage but they contribute a fair amount to their pensions and insurance costs--like in private enterprise. Unfortunately few politicians have dared take that position lest they incur the wrath of public employee unions.
See A Teacher May 28, 2012 at 02:02 AM
This is directly in response top Ms Kane's comment, "paying a fair wage into their [public employees'] pensions." Albeit, the senator's point is directly regarding healthcare coverage, but this has now been opened up into the broader realm of pensions in general: what Senator Lauzen is not mentioning, and many people in Illinois do not seem to understand, is that Illinois' teachers (and other public officials) do not pay into Social Security. TRS is NOT a 401(k) that teachers can sock money away into. It is the Illinois' teachers version of Social Security. When the federal government provided the Tax Relief act, teachers and public employees got no "relief," no 2% tax break. However, Illinois' teachers and other public employees did receive the same raise in state income tax the rest of the state had to pay. By the senator's reasoning, if benefits paid are to be "balanced" with the private sector, then in fact, Illinois' public officials should have the amount they contribute reduced. The money the state should have been paying into TRS and other public pensions went to many other places throughout the state. Asking teachers, police, firefighters, Secretary of State's office employees, IDOT workers, etc. to pay MORE to cover that is exactly the same as asking an auto mechanic, or IT specialist, or waitress to pay more to Social Security to cover anything on which the state or federal government has spent money.
See A Teacher May 28, 2012 at 02:14 AM
Oh, and I am aware that I'm posting this anonymously, and it will probably be deleted. But, the information above needs to be made clear, as it seems it is not to many people.
G.Ryan May 28, 2012 at 02:39 AM
No, to See a Teacher, Thank them?...this is Memorial Day Weekend..it is see a veteran and thank them. I really don't care whether teachers pay social security or not. They chose the vocation they are in and if they don't like it they can leave and find another job. They knew the circumstances before securing their tenures. It they don't like their benefits let them take a hike.....
Angela Kane May 28, 2012 at 03:05 AM
Yes, we all understand that teachers do not contribute to Social Security. And yes, the profession is your choice. It is also correct that dishonest politicians failed to fund your pensions as they were supposed to. Amazingly they were supported consistently by teachers' unions!
Angela Kane May 28, 2012 at 03:10 AM
And the cut to Social Security withholding is insane--underfunding SS will only precipitate its demise.
See A Teacher May 28, 2012 at 03:16 AM
Ms Kane, I believe we are in complete agreement on every point you have made. Personally, what I wish to see is the legislature--every member, prior and currently serving--to be held responsible for and to fund what they squandered. Not to shift the burden of their poor decisions onto one group, or the population of the state as a whole.
Angela Kane May 28, 2012 at 03:36 AM
The responsibility for the pension situation is largely that of the IEA and NEA and all the local schoold districts' unions in Illinois. They supported every politician (almost exclusively Democrats) with their manpower and $'s who then allowed Democrat governors to squander their pension money. Don't know if you recall but Judy Topinka made this a central issue in her campaign for governor. Teachers' unions supported Blago with votes and $. Sorry folks, it's kinda your own fault. Stop supporting politicians that make you ridiculous promises and don't whine about what happens when it all goes bad later.
See A Teacher May 28, 2012 at 04:09 AM
(At no point have I identified anything about myself one way or another. Please do not make assumptions about me, as I have not about you.) A rhetorical question, and then I will be closing this account; so, if the shoe were on the other foot, and it was Social Security in jeopardy, as it appeared to be a few years ago, what would your reaction be to public employees saying, "Oh, well, we're fine. Serves you right for going into the private sector"? What I came here to say was simply that the people of Illinois need to be in this together, not saying, "So sorry, you get to pay for someone else's mistake." I think a quote from Benjamin Franklin sums up my original point, "We must all hang together, or assuredly we shall all hang separately." Angela, thank you for the spirited conversation.
G.Ryan May 28, 2012 at 04:56 AM
Don't think old Benjamin or any of the founding fathers meant for this country to become the "entitlement" Republic.
H. Minsky May 28, 2012 at 06:15 AM
"Amazingly they were supported consistently by teachers' unions!" Jim Edgar was supported by the teacher's unions? The Illinois Supreme court deserves a lot of blame too?
Mitotero May 28, 2012 at 01:25 PM
I was struck by the extreme partisan nature of lauzen's article, as well as some of the comments above. The unfunded pension liability problem has been brewing for 30 years, with both republican and democratic administrations contributing. Lauzen's blaming the Blajo/Quinn administrations only was nauseating. The partial funding of the pensions started in 1982 under Thompson. In 1995, Edgar signed a bill that addressed the issue, but significantly backloaded the payments. We are now in the backload period. Factor in longer life expectancies and a great recession, and you have a huge hole to fill. Instead of falsely blaming one side, why not work together to fix a problem? I think this approach could be applied to any current issue. I also believe that teachers are incredibly important to the development of our children. To not thank them because it is Memorial Day weekend is inexcusable.
Angela Kane May 28, 2012 at 03:40 PM
People will see what they want to see in anything that is written on this subject, and of course it will be said that by requiring a higher contribution to health insurance or pension benefits by ANY state or local employee that will receive a state pension is somehow disrespecting them. That is, of course, ridiculous. It is true that governors of both parties botched this problem. It is also true that teachers' unions and unions that cover other public employees have supported Democrats that pandered to them, promised them all kinds of benefits and did so to secure votes. Unfortunately this is a historic pattern. Unions provide substantial financial support to those people with whom they negotiate. Seems like a conflict of interest. It is not outrageous to ask public employees to contribute a comparable amount to their pensions and health insurance as those in private enterprise. We need to stop demonizing those people sounding the alarm and proposing ANY solutions. And again, if you look back at Judy Topinka's campaign for governor you will see this issue--underfunding pensions--was central. Unfortunately people ignored her warning--including teacher unions--and supported Blago/Quinn who gave away countless millions and have shoved us into this financial abyss. And PS--today is Memorial Day and we should be honoring our fallen military. Don't dilute the honor they deserve today and every day.
G.Ryan May 28, 2012 at 04:24 PM
Thank you Angela. You are right on. My comment about the founding fathers is true they did not build this Republic on the philosophy of Entitlements. This is the point. Taking what was said out of context is the liberal way. So tell me are the teachers who have been convicted of abusing children important to their development too? Come on we are not fools here. The pension system needs to be overhauled along with the entire State of Illinois which is bankrupt. Next they will be bankrupting us taxpayers it is just a matter of time. The gangsters of this State need term limits as they have abused their power too long. And the taxpayers supporting educational whims of these Districts and Board of Spenders(Education) need their bureaucracy dismantled also. And I am sure Blago will get his hefty pension also as a criminal of this State as us taxpayers pay his expenses while staying in the Colorado Country Club Pen! On this day of Memorial, May God Bless all who have served our country. As they are the real servants to us all. Thank you to all our military here, there and those who have passed in our honor. You are the real heroes to us. And I do know you are the givers of this country who humble yourselves and never complain of your service or duty. You have such a special and enduring spirit. Thank you.
Sally Hemings May 28, 2012 at 04:58 PM
But what the founding fathers did was create a government that had more federal powers when they ditched the articles of confederation for the constitution currently in place. Surely ryan is not innocent to this fact. The first bailout of the financial sector occured in the Washington administration, you surely no that?
Montgomery Burns May 28, 2012 at 05:13 PM
The Illinois pension is not an entitlement. It was EARNED by the employees. They contribute between 8% and 10% of their pay, more than private sector employers do for FICA and Medicare. Had the state matched these funds as prescribed by law, we would be having these problems.
G.Ryan May 28, 2012 at 06:03 PM
Read the article it is censored with entitlements. Once again, taking it out of context.......not paying for one's health insurance is that an earned benefit? The government has given away freebies in exchange for votes that is the Democrat way and now you don't want to hear the truth of the matter as with every entitlement program which will eventually bankrupt itself like social security and Medicare.
Angela Kane May 28, 2012 at 11:19 PM
Wrongo Montgomery. Add up the percentages that private company employees contribute to Social Security, Medicare, insurance and pensions and it's far greater than what a public employee contributes. I don't think a state pension is an entitlement, but provisions are far more generous than almost every private one. Remember, those provisions were negotiated with the very people their unions financially sponsored. Again, a huge conflict of interest. If that was done in private businesses there would be a huge investigation by an array of federal agencies.
Henry Smits May 29, 2012 at 11:00 PM
Angela is wrong. But don't take my word for it. Look it up. Aside, shouldn't the correct standard be what the "employer" pays, because that is what the cost is to the taxpayer? Why don't you go to the various human resource sites of the private higher education schools, and verify whether your statement is accurate or not. I will help get you started: http://surs.org/pdfs/joint/SURS_Facts.pdf "SURS does not provide “overly generous” benefits. And the cost of those benefits is modest. The normal cost to the state to pay for the FY 2012 benefits is 12.71% of payroll, or $444.2 million. SURS participants don’t contribute to Social Security – and neither does the state on their behalf. If SURS members were covered by Social Security, the employer cost for that alone would be approximately $216 million" That 12.71% varies from year to year. In past years, I have seen it below 10%. But what you will often find the private higher education employers giving a 5% contribution on top of the regular wages into a 401k type account for the employee. So right away, what the State is paying is comparable to what the private sector is paying. At the private sector schools, they often will additionally match the employee's contribution above this 5%, up to a few more points each.
Henry Smits May 29, 2012 at 11:00 PM
If I were a state employee, and I would say, "cover the employer's share of my Social Security and Medicare; and then pay 5% to my 401K, match another 3 or 4%, vested at the time of each paycheck", from where I stand, that would be a better deal for the employee than what the state currently provides. It also would cost the state more money.
Rick Anderson May 31, 2012 at 01:11 PM
Whatever the case may be, the State of Illinois is doomed by the likes of the Madigans, Quinn, Cullerton and other blowhard Republicans that falsely believed Obama Dollar$ would flow in to Illinois unfettered and bail us out. That isn't going to happen....but we can count on Obama to pardon his corrupt buddies in federal penns.

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