Politics
Pritzker pushes measure to change Illinois pension funding plan
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SPRINGFIELD, Ill. — With a month-and-a-half left in the Illinois General Assembly’s spring session, Gov. J.B. Pritzker’s administration is readying its proposal to address the state’s chronically underfunded pension system.But the governor last week also acknowledged in the strongest terms yet that any plans to finally get the state on track toward fully funding retirement plans for public school teachers, university employees and state workers could be derailed by a looming legal fight over a 14-year-old law.Pritzker’s comments came as Illinois’ two influential statewide teachers unions were wrapping up a “week of action,” encouraging their members to call and email lawmakers and urge them to essentially “undo” a 2010 law that created a new less generous pension system for those who began their jobs after Jan. 1, 2011.The General Assembly and then-Democratic Gov. Pat Quinn quickly approved that law in the wake of the Great Recession, which forced state leaders to grapple with decades of underfunding in Illinois’ pension systems.But in the years since, economists and labor leaders have repeatedly warned that the retirement benefits in the Tier 2 system are so low, they might violate federal “Safe Harbor” laws. Those laws dictate Social Security replacement plans, like pensions, can’t offer benefits that don’t at least match Social Security.Lawmakers – the majority of whom were not in the legislature when Tier 2 was passed – have picked up on those warning signs, and in the last few years have been studying the issue in occasional committee hearings. In February, Pritzker signaled his willingness to get ahead of the looming legal issue, and on Thursday he took a big step forward in his position.“We need, obviously, to make some changes to Tier 2 to make sure that we’re meeting the Social Security Safe Harbor,” the governor said at an unrelated news conference late Thursday night in his Capitol office. “We don’t yet really know what that’s going to cost.”Earlier in the day, Pritzker’s top budget advisor, Governor’s Office of Management and Budget Director Alexis Sturm, told a House committee that the governor was “open to that conversation” about increasing the cap on Tier 2 pension earnings to match Social Security.Ahead of Pritzker’s annual budget address in February, Sturm and other top staffers laid out a larger plan to address Illinois’ underfunded pension systems, which included a nod to the Social Security issue.Read more: With budget proposal and fiery address, Pritzker paints himself as progressive pragmatistAt the time, the plan merely encouraged the boards of the state’s retirement systems for teachers, university employees and state employees, along with the legislature, to “review and adjust, if necessary, the structure of the Tier 2 pensionable earnings cap.”But in acknowledging the Tier 2 issue on Thursday, the governor also signaled to New York-based credit ratings agencies that he was still committed to fiscal moves that would earn the state further credit upgrades. Pritzker said state leaders “just need to be exceedingly careful” about pension “sweeteners” – including any fix made to Tier 2 pensions.“So that, in a way, is a sweetener in the sense that it’s going to cost taxpayers something,” Pritzker said. “But we have to do it because the alternative would cost the taxpayers much more.”There is no official price tag on tweaking the law to comply with Social Security rules, but one analysis run for the state’s Commission on Government Forecasting and Accountability last year estimated it could cost the state $5.6 billion through 2045, or about $255 million annually.Path to 2048Sturm’s appearance in a House committee Thursday was intended to sell lawmakers on the governor’s plan to fully fund Illinois’ pensions by 2048. Pritzker’s team had laid out the proposal ahead of his budget address in February, and one credit rating agency immediately signaled its approval.Read more: Pritzker proposes over $2B in spending growth, backed by tax increases for corporations, sportsbooksThe plan would alter a 1995 law signed by then-Republican Gov. Jim Edgar that put the state on a 50-year ramp to get Illinois’ pension systems to a 90 percent funded level by 2045.Pritzker wants to extend that deadline three more years, but up the funding goal to 100 percent. He’s also pushing to keep spending half of the amount of money Illinois is currently spending on debt repayment for old bonds taken out in 2003 and 2017 when they’re retired in the early 2030s and put that money toward the pension systems.The 2003 bonds were taken out to pay for pensions during Democratic Gov. Rod Blagojevich’s administration, and the 2017 bonds were sold in the aftermath of the state’s two-year budget impasse under Republican Gov. Bruce Rauner to help pay down Illinois’ record near-$17 billion backlog of unpaid bills accumulated during the political struggle.Sturm called the plan a “balanced” way to address Illinois’ longstanding practice of not paying enough into its pension systems, creating an ever-growing sum of unfunded liabilities.“It was there in the ‘90s, it was there in the ‘70s and the ‘40s,” Sturm said of the pension debt.She also clarified that Pritzker is “not interested” in issuing any bonds to put an infusion of cash into the state’s pension systems, a move made under Quinn in 2010 and 2011 several years after the state borrowed $10 billion in the 2003 bond sale under Blagojevich.Thursday’s discussion on the pension plan was subject matter only, meaning it did not receive a vote from the committee. It’s unclear if the measure will pass before lawmakers adjourn their spring session in May.Just as in the past, public employee unions will likely have tremendous influence over whether the legislature approves the governor’s pension plan.Pat Devaney, the secretary-treasurer of the Illinois AFL-CIO organized labor umbrella organization, told the panel Thursday that the We Are One Illinois coalition – a group of unions that formed after the Tier 2 pension system law passed – was not yet taking a stance on Pritzker’s plan.“It is difficult to provide comprehensive comments on the governor’s proposal without having specific legislative language and funding projections to review,” he said. “That said, the problematic nature of the current funding ramp is well-documented.”The coalition, Devaney said, “generally” supports making larger-than-necessary contributions to the state’s retirement systems.“The state has always set forward with a plan to underfund the pension systems,” he said. “We’re encouraged that the governor has a plan to actually fund it to 100 percent and come out with a deliberate, responsible way to provide that funding.”Tier 2 historyBut Devaney had a much more strident position to share with House members about Tier 2 pensions.“We can do that,” he said of Pritzker’s plan to shore up Illinois’ pension systems. “But we can also address the illegal, immoral, and, frankly, things that are hurting the operations of government at every level with the Tier 2 benefit level.”After a long pause, state Rep. Steve Reick, R-Woodstock, signaled his agreement – with a big caveat.“Yeah, but how?” Reick said. “That’s the thing that we need to get people together in a room and talk about because this isn’t gonna get any better for the next 20 years. I’m not going to be here 20 years from now but…I’d like to leave knowing that we started something that would get us to where we want to be.”Reick said his email inbox has been inundated with messages about the Tier 2 pension system. The Illinois Federation of Teachers and Illinois Education Association – the state’s two largest teachers unions – have encouraged their members to flood their local lawmakers with requests to address the Tier 2 pension system.As of Thursday evening, union members had sent more than 55,000 letters this week to lawmakers urging them to “fix” Tier 2 pensions, according to the Illinois AFL-CIO.“I mean, I get a lot of emails from people who demand that we do away with Tier 2 altogether and go back to Tier 1,” Reick said later on during the hearing. “Um, that’s not going to work.”As Illinois began its slow recovery from the Great Recession, lawmakers were facing a sudden jump in unfunded pension liabilities, due in part to poor investment returns as the stock market hobbled its way to recovery. But the General Assembly also felt the squeeze from decades of decisions from their predecessors shorting the state’s pension systems.Beginning in 2009, credit rating agencies began a series of downgrades to Illinois’ ratings of creditworthiness, making it more expensive for the state to borrow money via bond sales. In explaining their reasoning at the time, the influential agencies repeatedly noted the state’s pension systems were underfunded.The financial downturn came not long after the state skipped out on paying half of its pension obligation for two years under Blagojevich, which came on the heels of more than 11,000 state workers taking early retirement under Republican Gov. George Ryan. Both moves increased the liability to the state’s pension systems by billions of dollars.So in 2010, the Democratic-controlled General Assembly created the new Tier 2 system, which nixed the Tier 1 practice of 3 percent compounded annual cost of living adjustments for retirees, raised the age for retirees to get full benefits from 62 to 67 and changed eligibility for full benefits from five years of service to 10 years.Tier 2 also caps the maximum salary a pension can be based on and changes the calculation of the base salary to discourage a practice known as pension “spiking,” wherein those close to retirement age would seek raises to substantially increase their pension under the Tier 1 system.Because it takes a decade to “vest” in the Tier 2 pension system, those who made late-career switches to government employment have begun to be eligible for retirement only in the last few years.Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
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Politics
Poll: Support for Missouri abortion rights amendment growing

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A proposed constitutional amendment legalizing abortion in Missouri received support from more than half of respondents in a new poll from St. Louis University and YouGov.That’s a boost from a poll earlier this year, which could mean what’s known as Amendment 3 is in a solid position to pass in November.SLU/YouGov’s poll of 900 likely Missouri voters from Aug. 8-16 found that 52% of respondents would vote for Amendment 3, which would place constitutional protections for abortion up to fetal viability. Thirty-four percent would vote against the measure, while 14% aren’t sure.By comparison, the SLU/YouGov poll from February found that 44% of voters would back the abortion legalization amendment.St. Louis University political science professor Steven Rogers said 32% of Republicans and 53% of independents would vote for the amendment. That’s in addition to nearly 80% of Democratic respondents who would approve the measure. In the previous poll, 24% of Republicans supported the amendment.Rogers noted that neither Amendment 3 nor a separate ballot item raising the state’s minimum wage is helping Democratic candidates. GOP contenders for U.S. Senate, governor, lieutenant governor, treasurer and secretary of state all hold comfortable leads.“We are seeing this kind of crossover voting, a little bit, where there are voters who are basically saying, ‘I am going to the polls and I’m going to support a Republican candidate, but I’m also going to go to the polls and then I’m also going to try to expand abortion access and then raise the minimum wage,’” Rogers said.Republican gubernatorial nominee Mike Kehoe has a 51%-41% lead over Democrat Crystal Quade. And U.S. Sen. Josh Hawley is leading Democrat Lucas Kunce by 53% to 42%. Some GOP candidates for attorney general, secretary of state and treasurer have even larger leads over their Democratic rivals.
Brian Munoz
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St. Louis Public RadioHundreds of demonstrators pack into a parking lot at Planned Parenthood of St. Louis and Southwest Missouri on June 24, 2022, during a demonstration following the Supreme Court’s reversal of a case that guaranteed the constitutional right to an abortion.
One of the biggest challenges for foes of Amendment 3 could be financial.Typically, Missouri ballot initiatives with well-funded and well-organized campaigns have a better chance of passing — especially if the opposition is underfunded and disorganized. Since the end of July, the campaign committee formed to pass Amendment 3 received more than $3 million in donations of $5,000 or more.That money could be used for television advertisements to improve the proposal’s standing further, Rogers said, as well as point out that Missouri’s current abortion ban doesn’t allow the procedure in the case of rape or incest.“Meanwhile, the anti side won’t have those resources to kind of try to make that counter argument as strongly, and they don’t have public opinion as strongly on their side,” Rogers said.There is precedent of a well-funded initiative almost failing due to opposition from socially conservative voters.In 2006, a measure providing constitutional protections for embryonic stem cell research nearly failed — even though a campaign committee aimed at passing it had a commanding financial advantage.Former state Sen. Bob Onder was part of the opposition campaign to that measure. He said earlier this month it is possible to create a similar dynamic in 2024 against Amendment 3, if social conservatives who oppose abortion rights can band together.“This is not about reproductive rights or care for miscarriages or IVF or anything else,” said Onder, the GOP nominee for Missouri’s 3rd Congressional District seat. “Missourians will learn that out-of-state special interests and dark money from out of state is lying to them and they will reject this amendment.”Quade said earlier this month that Missourians of all political ideologies are ready to roll back the state’s abortion ban.“Regardless of political party, we hear from folks who are tired of politicians being in their doctor’s offices,” Quade said. “They want politicians to mind their own business. So this is going to excite folks all across the political spectrum.”
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Democrat Mark Osmack makes his case for Missouri treasurer

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Mark Osmack has been out of the electoral fray for awhile, but he never completely abandoned his passion for Missouri politics.Osmack, a Valley Park native and U.S. Army veteran, previously ran for Missouri’s 2nd Congressional District seat and for state Senate. Now he’s the Democratic nominee for state treasurer after receiving a phone call from Missouri Democratic Party Chairman Russ Carnahan asking him to run.“There’s a lot of decision making and processing and evaluation that goes into it, which is something I am very passionate and interested in,” Osmack said this week on an episode of Politically Speaking.Osmack is squaring off against state Treasurer Vivek Malek, who was able to easily win a crowded GOP primary against several veteran lawmakers including House Budget Chairman Cody Smith and state Sen. Andrew Koenig.While Malek was able to attract big donations to his political action committee and pour his own money into the campaign, Osmack isn’t worried that he won’t be able to compete in November. Since Malek was appointed to his post, Osmack contends he hasn’t proven that he’s a formidable opponent in a general election.“His actions and his decision making so far in his roughly two year tenure in that office have been questionable,” Osmack said.Among other things, Osmack was critical of Malek for placing unclaimed property notices on video gaming machines which are usually found in gas stations or convenience stores. The legality of the machines has been questioned for some time.As Malek explained on his own episode of Politically Speaking, he wanted to make sure the unclaimed property program was as widely advertised as possible. But he acknowledged it was a mistake to put the decals close to the machines and ultimately decided to remove them.Osmack said: “This doesn’t even pass the common sense sniff test of, ‘Hey, should I put state stickers claiming you might have a billion dollars on a gambling machine that is not registered with the state of Missouri?’ If we’re gonna give kudos for him acknowledging the wrong thing, it never should have been done in the first place.”Osmack’s platform includes supporting programs providing school meals using Missouri agriculture products and making child care more accessible for the working class.He said the fact that Missouri has such a large surplus shows that it’s possible to create programs to make child care within reach for parents.“It is quite audacious for [Republicans] to brag about $8 billion, with a B, dollars in state surplus, while we offer next to no social services to include pre-K, daycare, or child care,” Osmack said.Here’s are some other topics Osmack discussed on the show:How he would handle managing the state’s pension systems and approving low-income housing tax credits. The state treasurer’s office is on boards overseeing both of those programs.Malek’s decision to cut off investments from Chinese companies. Osmack said that Missouri needs to be cautious about abandoning China as a business partner, especially since they’re a major consumer of the state’s agriculture products. “There’s a way to make this work where we are not supporting communist nations to the detriment of the United States or our allies, while also maintaining strong economic ties that benefit Missouri farmers,” he said.What it was like to witness the skirmish at the Missouri State Fair between U.S. Sen. Josh Hawley and Democratic challenger Lucas Kunce.Whether Kunce can get the support of influential groups like the Democratic Senatorial Campaign Committee, which often channels money and staff to states with competitive Senate elections.
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As Illinois receives praise for its cannabis equity efforts, stakeholders work on system’s flaws

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Medical marijuana patients can now purchase cannabis grown by small businesses as part of their allotment, Illinois’ top cannabis regulator said, but smaller, newly licensed cannabis growers are still seeking greater access to the state’s medical marijuana customers.Illinois legalized medicinal marijuana beginning in 2014, then legalized it for recreational use in 2020. While the 2020 law legalized cannabis use for any adult age 21 or older, it did not expand licensing for medical dispensaries.Patients can purchase marijuana as part of the medical cannabis program at dual-purpose dispensaries, which are licensed to serve both medical and recreational customers. But dual-purpose dispensaries are greatly outnumbered by dispensaries only licensed to sell recreationally, and there are no medical-only dispensaries in the state.As another part of the adult-use legalization law, lawmakers created a “craft grow” license category that was designed to give more opportunities to Illinoisans hoping to legally grow and sell marijuana. The smaller-scale grow operations were part of the 2020 law’s efforts to diversify the cannabis industry in Illinois.Prior to that, all cultivation centers in Illinois were large-scale operations dominated by large multi-state operators. The existing cultivators, mostly in operation since 2014, were allowed to grow recreational cannabis beginning in 2019.Until recently, dual-purpose dispensaries have been unsure as to whether craft-grown products, made by social equity licensees — those who have lived in a disproportionately impacted area or have been historically impacted by the war on drugs — can be sold medicinally as part of a patient’s medical allotment.Erin Johnson, the state’s cannabis regulation oversight officer, told Capitol News Illinois last month that her office has “been telling dispensaries, as they have been asking us” they can now sell craft-grown products to medical patients.“There was just a track and trace issue on our end, but never anything statutorily,” she said.
Dilpreet Raju
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Capitol News IllinoisThe graphic shows how cannabis grown in Illinois gets from cultivation centers to customers.
No notice has been posted, but Johnson’s verbal guidance comes almost two years after the first craft grow business went online in Illinois.It allows roughly 150,000 medical patients, who dispensary owners say are the most consistent purchasers of marijuana, to buy products made by social equity businesses without paying recreational taxes. However — even as more dispensaries open — the number available to medical patients has not increased since 2018, something the Cannabis Regulation Oversight Office “desperately” wants to see changed. Johnson said Illinois is a limited license state, meaning “there are caps on everything” to help control the relatively new market.Berwyn Thompkins, who operates two cannabis businesses, said the rules limited options for patients and small businesses.“It’s about access,” Thompkins said. “Why wouldn’t we want all the patients — which the (adult-use) program was initially built around — why wouldn’t we want them to have access? They should have access to any dispensary.”Customers with a medical marijuana card pay a 1% tax on all marijuana products, whereas recreational customers pay retail taxes between roughly 20 and 40% on a given cannabis product, when accounting for local taxes.While Illinois has received praise for its equity-focused cannabis law, including through an independent study that showed more people of color own cannabis licenses than in any other state, some industry operators say they’ve experienced many unnecessary hurdles getting their businesses up and running.The state, in fact, announced last month that it had opened its 100th social equity dispensary.But Steve Olson, purchasing manager at a pair of dispensaries (including one dual-purpose dispensary) near Rockford, said small specialty license holders have been left in the lurch since the first craft grower opened in October 2022.“You would think that this would be something they’re (the government) trying to help out these social equity companies with, but they’re putting handcuffs on them in so many different spots,” he said. “One of them being this medical thing.”Olson said he contacted state agencies, including the Department of Financial and Professional Regulation, months ago about whether craft products can be sold to medical patients at their retail tax rate, but only heard one response: “They all say it was an oversight.”This potentially hurt social equity companies because they sell wholesale to dispensaries and may have been missing out on a consistent customer base through those medical dispensaries.Olson said the state’s attempts to provide licensees with a path to a successful business over the years, such as with corrective lotteries that granted more social equity licenses, have come up short.“It’s like they almost set up the social equity thing to fail so the big guys could come in and swoop up all these licenses,” Olson said. “I hate to feel like that but, if you look at it, it’s pretty black and white.”Olson said craft companies benefit from any type of retail sale.“If we sell it to medical patients or not, it’s a matter of, ‘Are we collecting the proper taxes?’ That’s all it is,” he said.State revenue from cannabis taxes, licensing costs and other fees goes into the Cannabis Regulation Fund, which is used to fund a host of programs, including cannabis offense expungement, the general revenue fund, and the R3 campaign aiming to uplift disinvested communities.For fiscal year 2024, nearly $256 million was paid out from Cannabis Regulation Fund for related initiatives, which includes almost $89 million transferred to the state’s general revenue fund and more than $20 million distributed to local governments, according to the Illinois Department of Revenue.Medical access still limitedThe state’s 55 medical dispensaries that predate the 2020 legalization law, mostly owned by publicly traded multistate operators that had been operating in Illinois since 2014 under the state’s medical marijuana program, were automatically granted a right to licenses to sell recreationally in January 2020. That gave them a dual-purpose license that no new entrants into the market can receive under current law.Since expanding their clientele in 2020, Illinois dispensaries have sold more than $6 billion worth of cannabis products through recreational transactions alone.Nearly two-thirds of dispensaries licensed to sell to medical patients are in the northeast counties of Cook, DuPage, Kane, Lake and Will. Dual-purpose dispensaries only represent about 20 percent of the state’s dispensaries.While the state began offering recreational dispensary licenses since the adult-use legalization law passed, it has not granted a new medical dispensary license since 2018. That has allowed the established players to continue to corner the market on the state’s nearly 150,000 medical marijuana patients.But social equity licensees and advocates say there are more ways to level the playing field, including expanding access to medical sales.Johnson, who became the state’s top cannabis regulator in late 2022, expressed hope for movement during the fall veto session on House Bill 2911, which would expand medical access to all Illinois dispensaries.“We would like every single dispensary in Illinois to be able to serve medical patients,” Johnson said. “It’s something that medical patients have been asking for, for years.”Johnson said the bill would benefit patients and small businesses.“It’s something we desperately want to happen as a state system, because we want to make sure that medical patients are able to easily access what they need,” she said. “We also think it’s good for our social equity dispensaries, as they’re opening, to be able to serve medical patients.”Rep. Bob Morgan, D-Deerfield, who was the first statewide project coordinator for Illinois’ medical cannabis program prior to joining the legislature, wrote in an email to Capitol News Illinois that the state needs to be doing more for its patients.“Illinois is failing the state’s 150,000 medical cannabis patients with debilitating conditions. Too many are still denied the patient protections they deserve, including access to their medicine,” Morgan wrote, adding he would continue to work with stakeholders on further legislation.Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
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