Who is to Blame for the Current Pension Crisis – Part 1

There are many to blame for the current pension crisis here in Illinois and we will delve into this over the next several weeks.

Let’s start with the the 1994, Gov. Jim Edgar and Mike Madigan pension ramp (graph below). This was suppose to allow the state to meet it’s obligation to retirees while keeping Illinois financially stable. It was obvious to anyone with common sense back then that heavily back loading the pension payments and allowing the state to borrow money (not pay required pension payments) were going to lead to a disaster.

As you can see from the graph above, the ramp starts at a payment of $607 million and rises to $16.8 Billion in 2045.  This ramp increase of over 2600% makes any attempt to say nobody could have foreseen this a blatant lie or sheer stupidity.

Jack Roeser was one of the few that foresaw the coming financial crisis and ran for Gov. that year against Jim Edgar. Other did as well as we’ll cover in upcoming segments.

The SEC (Securities and Exchange Commission) in their “nearly unprecedented case of securities fraud against the state” of Illinois told us who else was responsible for the current pension crisis:

Those who helped get Illinois to where it is today with pensions include former Gov. Jim Edgar; House Speaker Michael Madigan (D-Chicago), a Statehouse constant during the state’s calamitous pension slide; and everyone who voted for either a flawed, 1994 pension-funding law Edgar and Madigan championed, including three potential GOP contenders for governor in 2014, or a 2005 law that let the state skimp on its pension obligations for five years.

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“Rather than controlling the state’s growing pension burden, [the law’s] contribution schedule increased the unfunded liability, underfunded the state’s pension obligations and deferred pension funding,” the SEC wrote. “This resulting underfunding of the pension systems … enabled the state to shift the burden associated with its pension costs to the future and, as a result, created significant financial stress and risks for the state.”

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Three potential gubernatorial candidates — Treasurer Dan Rutherford, state Sen. Bill Brady (R-Bloomington) and state Sen. Kirk Dillard (R-Hinsdale) — voted in favor of it as lawmakers.

And what does Bill Brady, Kirk Dillard and Dan Rutherford all say about their vote for the disastrous Edgar/Madigan Pension Ramp?

Dan Rutherford 

“We’re talking 18 years ago, and it was the best estimate, the best effort, at trying to bring about some resolution to this. You look basically at what’s occurred 18 years since then, and General Assemblies and governors didn’t do what they were supposed to do,” Rutherford said. “Not one time in those following 18 years did I vote for a budget that didn’t fully fund the pensions.”

Kirk Dillard  

“I voted for it because it established a ‘continuing appropriation’ that was designed to put pension payments at the front of the line,” he said. “That worked until Rod Blagojevich stopped making payments and unbelievably, with Speaker Madigan’s help, actually raided monies from the Teacher Retirement System.”

Bill Brady 

Brady, the GOP’s 2010 gubernatorial nominee, also justified his 1994 vote and insisted the real pension problems materialized after Blagojevich orchestrated a $10 billion borrowing scheme to fund pensions in 2003 and the “pension holiday” law the then-governor backed in 2005. (Brady and Rutherford voted against both of those measures; Dillard supported the 2003 borrowing plan but voted against the 2005 law.)

“It’s as good as we could get then. I think it was sustainable then,” Brady said of the Edgar-Madigan plan of nearly two decades ago. “But the big bonding package and ‘holidays’ have proven to make it unsustainable. The part I’m still flabbergasted by is that the members of the General Assembly were able to vote for borrowing and not making the payments and still not be held accountable to the voters.”

All three of the Gubernatorial candidates are trying to spin their way out of blame for the current pension crisis. It appears they were hoping nobody actually looked back at the records to show the Edgar/Madigan Pension Ramp as a fraud and scam perpetrated on the teachers, state employees and taxpayers of Illinois.

Brady, Dillard and Rutherford are all complicit in the current pension crisis.  If they don’t even understand their culpability, why should they ever be trusted with fixing the crisis they helped cause?  Will they will just do more of the same as they did in 1994 and kick the can down the road to future generations again?

EdgarPensionRampPic

 

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About Lennie Jarratt

Small Business Owner, Education Watchdog, FOIA expert, Founder of For Our Children's Future

Comments

  1. The entire Public Sector operations are involved in this Epic fraud on the taxpayers. The cost for the 23 million millionaires of the Public Sector requires that the rape and robbery of the taxpayers reach these oppressive levels of today. The FDR Collectivism, Socialism or Communism has reached its final act and it is about to implode not only Illinois but the entire nation. The corruption and criminal activity by the Public Sector levels today has never been witnessed in World history. The road to Serfdom is almost complete.

  2. AV1RICKSTER says:

    I can’t wait to retire so I can get out of this state as quickly as possible. It is insane. I vote in every election and elect no one who represents me in any way or fashion. And you get complacent but see even in conservative distrcts teachers unions still rule. After a while it just gets depressing thinking about voting. It gets old when you see how badly you get taken to the cleaners each and everyday.

  3. Data like this are really useful for people whether they’re enjoying on just one single
    stand or completely as much as 32.

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