Chicago Tribune | New law allows DuPage to shrink government

By on August 5, 2013   /   Illinois Press, Press  
Rae Ann McNeilly, Executive Director of Taxpayers United for America, was quoted in the Chicago Tribune on legislation allowing DuPage County to consolidate government.
DuPageCountyHow many government officials does it take to change a light bulb in a subdivision near Naperville?
Too many, according to advocates of streamlined government, who celebrated Gov. Pat Quinn’s signature Friday on legislation that will allow DuPage County to consolidate or eliminate some government entities like the Century Hill Street Lighting District.

“This is the best medicine to take on bureaucracy and excessive, wasteful duplicative government that we’ve had in a long, long time,” Quinn said.
Under the new law, the county will be able to dissolve non-elected government agencies deemed outdated or inefficient following a full analysis and public review process.
And in the case of the unincorporated subdivision just outside Naperville, one of the trustees on the Century Hill Street Lighting District wouldn’t mind being out of a job.
“As a board, we’re entirely welcome to this,” said Tom Cieslak, 70, who has been volunteering as an unpaid trustee since the 1980s. “What happens if I get a heart attack tomorrow and I’m one of two people that know the job?”
The district, which includes about 300 homes, levies about $15,000 in property taxes to service approximately 77 streetlights. Cieslak said that managing the district has grown increasingly burdensome.
“It’s very difficult to maintain a district this small to ensure quality and to keep up with the changing levels of law in terms of ethics rules and Freedom of Information rules,” he said. “There’s more and more training that’s being put on us. There’s very little support in the community.”
In addition to the Century Hill Street Lighting District, about a dozen other entities could be on the chopping block under the new law, including fire protection, sanitary and mosquito abatement districts.
“Frequently we find there’s another unit of government that could do the same thing,” said DuPage County Board Chairman Dan Cronin, who had pushed for the legislation. “Why don’t we just figure out who is going to be the odd man out?”
The narrowly written law currently applies only to DuPage County, which has more than 400 taxing bodies. State officials say they hope DuPage will serve as a model for other counties.
“I believe this has changed the conversation in Springfield, and I think it’s the first step and you’re going to see a lot more of this going on in the entire state,” said Rep. Deb Conroy, D-Villa Park, one of the sponsors of the new law.
Rae Ann McNeilly, executive director of Taxpayers United of America, said she supports the concept of shrinking government, but questions the “top-down method” being employed in DuPage.
“You have county bureaucrats telling the local bureaucrats what they need and don’t need,” she said. “But at first blush, any time we can shrink government, it’s a good thing as long as it doesn’t negatively impact the governed. They should have the say in what occurs — it’s their tax dollars.”
Cronin said his office will analyze each entity individually to determine whether there is the potential to save money and come up with a plan for how those services would still be provided. Residents would be able to weigh in during public hearings and could put together a referendum to fight a proposed dissolution.
Cronin acknowledged consolidation could mean the loss of jobs for some.
“This is not going to be all sunshine and rainbows,” he said. “This is about realizing tangible, measurable cost savings, and as anybody knows in operation of government, personnel is the No. 1 cost.”
Amy Kovacevic, 38, a trustee on the Downers Grove Sanitary District — a position that pays $6,000 a year — said she believes her agency is run efficiently, but believes the county could consolidate other nonessential or outdated governmental bodies.
“As a state, as a county, there are probably ways we can trim,” she said. “Many people are working paycheck to paycheck to pay their bills … and we owe it to the taxpayers.”
Ronald G. Berquist, 83, has served on the Glenbard Fire Protection District board for the past 12 years and has seen the district slowly shrink as the village of Lombard annexes homes and businesses.
Currently, the district levies taxes from about 700 homes and businesses in the unincorporated area near Lombard.
“It’s a paper district,” Berquist said. “We only levy the taxes and we contract our fire and EMS services from Lombard. So a point could be made that there is no point to what we do, but we continue under the statute. We think we perform a duty to the citizens of our district, but if they (county officials) choose to eliminate us, then they would have to take on the responsibility of levying the taxes.”
Berquist and two other board members each are paid $1,000 a year for their service and their duties include approving a budget and tax levy at an annual meeting and hearing complaints from citizens, although Berquist said none has shown up to meetings in recent years.
He said that given the modest expenses the district incurs, it’s unlikely that eliminating the district would save taxpayers any money. And he enjoys the opportunity to work in his community.
“My wife says, ‘Aren’t you too old to do this, why don’t you retire?'” I say, ‘I enjoy doing this.’ If they chose to eliminate my job, so be it. But I’m willing to serve as long as the structure exists.”
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Wisconsin Reporter | Packing on the pensions

By on July 30, 2013   /   Press, Wisconsin Press  

Findings from TUA’s pension projects on Milwaukee, Wisconsin, are featured in this story from the Wisconsin Reporter.
packingonthepensionsBy M.D. Kittle and Alyssa Hertig | Wisconsin Reporter
MADISON – The good people of Wisconsin’s 6th Congressional District first elected Tom Petri to serve as their representative in the U.S. House in a special election in April 1979.
Times have changed in Wisconsin and national politics, but the 6th District’s representative hasn’t.
Now into his 18th term, Petri, a Fond du Lac Republican, is a fixture of Wisconsin’s congressional delegation. He also is the beneficiary of a $174,000 annual salary and will ultimately benefit from what the National Taxpayers Union calls the “single most personally valuable perk to a Member of Congress” – his federal government pension plan.
As it stands, the veteran congressman expects to earn a pension north of $100,000 per year, based on his earnings and what would be his 36 years in Congress upon the close of his latest term.
“Congressional pensions are typically 2-3 times more generous than those offered to similarly-salaried workers in the private sector, and are even more generous than pensions for most federal workers,” the National Taxpayers Union asserts on its website.
But Petri isn’t waiting to draw a federal pension. The long-serving lawmaker came to Congress after a six-year political career in the Wisconsin state Senate.
Last year, Petri collected $14,878 from his Wisconsin Retirement System pension, in which he was vested after five years of public service.
In 2011, Petri received $14,950 in legislative pension payments, according to data from the Center for Responsive Politics.
Since 2008, the congressman has pocketed some $64,000 in state legislative pension payments, according CRP, a campaign fundraising and political information tracker. Admittedly, the pension payments are a drop in the bucket for a lawmaker whose net worth, placed somewhere between $9.52 million and $45.41 million, ranks him 22th wealthiest among his House peers, according to CRP.
Petri sees nothing wrong with cashing the pension checks he rightfully earned.
“Rep. Petri simply believes that he earned his state pension through his public service in the state legislature and he has chosen to take it at this time,” Petri spokesman Lee Brooks said in an email to Wisconsin Reporter.
But to critics, the practice of congressional members drawing government pensions while building potentially hefty federal pensions stinks of double-dipping.
That’s how Petri’s fellow Wisconsin congressman, U.S. Rep. Ron Kind, sees it.
“It does smack of a bit of double-dipping,” he told Wisconsin Reporter. “That’s an increased financial burden on taxpayers.”
Kind, who began his congressional career in 1997, is not eligible for a state public sector pension. The congressman served as La Crosse County’s assistant district attorney for about four years, and as a practicing attorney before that. He said he’s hopeful his congressional brethren will “delve into” the issue, following the lead of states that have curtailed the practice of drawing from other public pensions while still being paid to serve the public.
After eight terms in office, Kind is looking at an annual federal pension of $53,244.
A side of retirement
Petri is among three members of Wisconsin’s congressional delegation to draw a state pension, according to financial disclosure reports posted on the Center for Responsive Politics.
U.S. Rep. Gwen Moore, D-Milwaukee, in 2011 collected $13,628 in legislative pension payments, and $7,770 from the Wisconsin Deferred Compensation Fund,   a supplemental retirement savings program available to all active state and university employees. Moore served two terms in the Wisconsin state Assembly and three terms in the state Senate. Before that, she worked for the city of Milwaukee as a neighborhood development specialist and for state agencies such as the Wisconsin Housing and Economic Development Authority.
In 2010, Moore drew a $13,628 legislative pension, and $27,418 in deferred compensation. Her pension in 2009 was $12,440.
As of July 30, Moore had yet to file her financial disclosure for 2012. She asked for and received an extension to file her annual Financial Disclosure Statement Report, due by Aug. 13.
In 2011, Moore claimed her net worth was $0, with assets of between $50,001 and $100,000. The Center for Responsive Politics ranked the congresswoman 406th among House members in terms of wealth.
The 4th District congresswoman, should she retire in 2015, would draw an estimated $29,580 federal pension, based on a formula that applies years of congressional service and the average of the three highest years’ salaries upon leaving office. Other adjustments are made for age at retirement and marital status.
Moore’s office did not respond to Wisconsin Reporter’s request for comment.
U.S. Rep. Jim Sensenbrenner, R-Menomonee Falls, also sought a 90-day extension on his 2012 financial disclosure, now due Aug. 13.  The congressman, who has served the 5th Congressional District since 1979, pocketed a $29,861 state pension payout in 2011, the benefit of his decade in the state Legislature.
Sensenbrenner, who ranked 34th in the House in personal wealth in 2011 with a net worth pegged somewhere between $13.42 million and $18.98 million, according to CRP, has collected nearly $100,000 in state pension payments since 2008.
The long-time politician would collect an annual federal pension payout of well above $150,000 for 36 years of service under the old Civil Service Retirement System, which covers members of Congress elected before 1984. Members can opt out of the CSRS for the lower paying Federal Employees’ Retirement System, although few do. Sensenbrenner’s annual federal retirement check is estimated at $106,000 under the FERS plan.
In Congress, retiring lawmakers get pensions worth up to 80 percent of their $174,000 salary — or $139,200 — if they serve 32 years, according to a 2011 piece in USA Today. The average pension for 455 retired federal lawmakers is $57,590, according to the Congressional Research Service.
It’s all government money
Sarah Bryner, research director at the Center for Responsive Politics said the term “double-dipping,” is somewhat apt, although congressional members drawing state pensions are not drawing from the same funds.
“On one hand, it’s all government money,” she said. “I would say it is interesting. There is no clear-cut case of nefariousness or conflict of interest. These are people who are perfectly, legally entitled to their pension.
But Bryner said the pension data poses an important question: whether members of Congress are out of touch with their constituency.
“Sensenbrenner is good example of someone quite wealthy and collecting a (state) pension,” Bryner said.
The Wisconsin congressman, however, runs nowhere near the top earners of public pension payouts among congressional members.
U.S. Sen. Diane Feinstein, D-California, pocketed $54,925 in pension payments for her time as mayor of San Francisco, according to CRP and a recent investigation in the National Journal.  Feinstein has received about $850,000 in retirement benefits over the past two decades, according to the magazine. Feinstein ranked as the second-wealthiest member of Congress to collect a pension in 2012, according to CRP, which estimates the senator’s net worth somewhere between $42.8 million and $98.7 million.
“One lawmaker, freshman Rep. Joyce Beatty, D-Ohio, received $253,323 from her government pension last year — a sum that, combined with her congressional salary, will make her better paid than President Obama this year,” the National Journal piece noted.
U.S. Rep. Ralph Hall, at 90, is the oldest member of the House. According to the National Journal, Hall spent a decade in the Texas Legislature before beginning his hold on his congressional seat.
“The Republican (who was a Democrat until 2004) has been collecting a Texas state pension ever since. In those 32 years he earned some $1.3 million in retirement benefits. (Many years in the 1980s he didn’t list specific amounts; this analysis presumes his pension remained flat during those years.)” the magazine reported. Hall collected a pension of $65,748 in 2012.
More than 100 members of Congress collected public pensions atop their taxpayer-financed $174,000 salary in 2012, according to the National Journal examination.
Then there are the multi-public pension accruers.
Milwaukee Mayor Tom Barrett, a former U.S. representative, is eligible for an annual federal pension of around $25,000 a year for his five terms in Congress. The Democrat also earns an estimated state pension of about $7,200 per year, a benefit he collects for his service in the state Legislature. An analysis by Taxpayers United of America projects Barrett could earn nearly $3 million in pension benefits from the city of Milwaukee and in Social Security, over his lifetime, depending on age of retirement and length of life.
Some members of Congress who are eligible for a public pension choose not to collect it.
Bryner said that might send a message of fiscal responsibility to constituents, but there may be little substance beyond the symbolism.
“It doesn’t seem in most cases that a person’s pension is going to have a significant affect on their behavior in Congress,” the campaign finance tracker said.

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The Globe and Mail | Pension liabilities drive America’s cities to their knees

By on July 25, 2013   /   Illinois Press, Press  

TUA’s study on Chicago police pensions was referenced in an article at The Globe and Mail.
mailandglobeIt turns out Jane Jacobs was wrong. Rationalist urban planners weren’t the worst thing that ever happened to the Great American City. Pension-promising politicians have done far more harm.
That’s clear in newly bankrupt Detroit, which spends 40 cents of every tax dollar on retirement benefits and debt service costs. Is it any wonder the street lights don’t work?
Detroit is admittedly an extreme example, driven to its knees by decades of depopulation and political dysfunction. But its insolvency has drawn attention to the greatest threat to American cities since possibly the Spanish flu: unfunded pension and health liabilities for retired workers.
Short of declaring bankruptcy, it’s nearly impossible for cities to cut contractually protected pension and health benefits. So instead, they’ve been slashing basic services and/or cutting back on new investments in infrastructure, undermining the basis for future prosperity.
Even that hasn’t solved the problem, though. Estimates of the extent to which cities have failed to set aside enough money to pay pension and health benefits vary. But the gap easily amounts to hundreds of billions of dollars. Include state governments and the shortfall is into the trillions.
“Pension liabilities are widely acknowledged to be understated,” Moody’s credit rating agency said this month. It estimates the true shortfall at three times the sums reported by cities.
Last week, Moody’s downgraded Chicago’s credit rating by three full notches. The vibrant Windy City is no Detroit. But benefits for former employees and interest on its debt now suck up a third of its operating budget. And things will only get worse. Moody’s pegged Chicago’s unfunded liabilities at $36-billion (U.S.) – almost twice the $19-billion reported by the city.
Accounting gimmicks are one of the biggest reasons for the discrepancy. Cities have bet on a rate of return on pension investments above 7 per cent, although the yields on government bonds hover around 2 per cent. Not only have cities and states contributed billions less than they should have over the years to fund future pensions, but very few have set aside any money at all to cover retiree health benefits.
It’s no mystery how most U.S. cities and states got into this mess. For decades, politicians bought labour peace by promising higher pay and benefits for public employees without thinking twice about how to pay for them. Most knew it would become someone else’s problem anyway.
Whether public employees deserve their pensions is beside the point. (While the pensions of Detroit workers appear reasonable, they also reflect that city’s lower cost of living.) Still, politicians shirked their fiduciary responsibility for the financial integrity of their cities.
In Chicago, the average police pension is $55,000. For firefighters, it’s upward of $60,000. In 2011, 94 former Chicago police officers had pensions above $100,000, according to Taxpayers United of America. What’s more, unlike their peers in many other cities, retired Chicago police also receive partial federal Social Security benefits, up to about $13,000 a year.
Since police, firefighters and teachers typically retire in their 50s, many will draw pension and health benefits for three decades or more. That is, unless other cities follow Detroit, which is asking a bankruptcy judge to let it slash pensions. If Detroit gets its way, it will set a precedent other large cities may try to follow. Until now, all they’ve been able to do is squeeze concessions from unions that affect only new employees, who will retire later and contribute more to their pension fund. And in most cases, police and firefighters have been exempt from the changes.
The greatest reckoning may come in California. The state has already seen smaller cities such as Vallejo, Stockton and San Bernardino declare bankruptcy. Last year, almost 15,000 former California public employees drew pensions of more than $100,000. And the $100K club is adding thousands of new members a year as baby boomer retirements pick up steam.
Public pensioners can be expected to put up a fight wherever officials seek to cut their benefits. But it would be hard to top the sheer nerve of Bruce Malkenhorst, the former city manager of the Los Angeles-area industrial enclave of Vernon (population 112). His 2012 pension was $540,000, until the California Public Employees’ Retirement System cut it to $115,000.
Mr. Malkenhorst, 78, who has been convicted of misappropriating public funds, is now suing to recoup the difference, citing “elder abuse.” It does make one read Jane Jacobs and weep.

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