The board that oversees the Teachers Retirement System is scheduled to vote on whether to lower the expected rate of return on investments, a move Republican Gov. Bruce Rauner’s office has warned could blow a massive hole into the state’s already shaky finances.
The board will convene in Springfield on Friday morning to consider the change. When the board last altered the assumption from 8 percent to 7.5 percent in 2014, the state ended up on the hook for an additional $200 million in pension payments.
It’s an added cost state government can ill afford after going more than a year without a full budget. The Rauner administration suggests it could lead to deeper cuts and the need for even higher taxes down the road.
“If the board were to approve a lower assumed rate of return, taxpayers will be automatically and immediately on the hook for potentially hundreds of millions of dollars in higher taxes or reduced services,” Michael Mahoney, the governor’s senior adviser for revenue and pensions, wrote in a memo to Rauner’s chief of staff earlier this week.
“Unforeseen and unknown automatic cost increases will have a devastating impact on the state’s ability to provide adequate resources to social service programs and education,” Mahoney said.
The vote comes as pension systems across the nation are reporting lower-than-expected returns, and as analysts encourage systems to lower their assumptions amid concerns states don’t have enough money to pay for promised retirement benefits.
Illinois already has $111 billion in unfunded pension liabilities, one of the worst funding ratios in the nation. (Monique Garcia with The Associated Press)
What’s on tap
*Mayor Rahm Emanuel has no public schedule.
*Gov. Bruce Rauner will make southern Illinois stops in Carbondale, Marion and Makanda before opening the DuQuoin State Fair.
*Democratic U.S. Senate hopeful Rep. Tammy Duckworth will campaign in Carbondale and DuQuoin.
*Duckworth says Kirk hiding behind stroke: Democratic U.S. Senate challenger Tammy Duckworth has fired back at Republican Sen. Mark Kirk, suggesting her opponent was hiding behind his stroke and calling that “shameful.”
The story so far: Duckworth was referring to Kirk’s likening of President Barack Obama to the nation’s “drug dealer in chief” for a $400 million payment in January’s Iran prisoner release deal. Kirk suffered a major stroke in 2012, and Duckworth assigned a term to him defined as “mentally deranged.” Kirk then said Duckworth was “so desperate to run for office that she would denigrate any stroke victim in America and make fun of them, and that’s awful.”
On Thursday, Duckworth was asked about Kirk’s statement. “Nothing could be further from the truth. In fact, his irrational comments pre-date his stroke,” said Duckworth, referring to a string of Kirk exaggerations that came to light before the November 2010 U.S. Senate election.
Then Duckworth took things further.
“The fact of the matter is, he’s not been able to accomplish much of anything from before he had his stroke. And for him to use his stroke as something to hide behind is really shameful because there’s a lot of people — you know, neither one of us are victims. We have both recovered from disability. And to hide behind that, your ineffectiveness as a senator, behind that, is pretty shameful,” she said.
Kevin Artl, Kirk’s campaign manager, said the Democrat’s comments represented “another nasty cheap shot.”
“The simple fact is that Congresswoman Duckworth is a Democrat rubber stamp who has been rated as one of the least effective members of Congress,” Artl said. (Kim Geiger, Rick Pearson)
*Emanuel doesn’t knock Sox: Mayor Emanuel flubbed a chance to take batting practice on the topic that has been the subject of so much South Side hand-wringing and North Side schadenfreude this week: the rebranding of Sox Park thanks to a corporate naming rights deal with mortgage lender Guaranteed Rate.
Perhaps thinking of his relationship with Sox owner Jerry Reinsdorf, Emanuel initially was circumspect when asked by WBEZ reporter Lauren Chooljian what he thought about calling the stadium Guaranteed Rate Field.
“I’m going to focus on my day job, that’s all,” he said. “Look, that’s a decision for them to make. What’s important is, obviously, the team does well and continue to make the city proud. I will — let me say this on behalf of the Reinsdorf family, both with the Bulls and also with the Sox, they’re incredibly generous in giving back to the community.”
The media critic mayor then granted Chooljian a second question at his news conference, deeming the Sox Park query “not really that good.”
“I thought you would say something funny, I don’t know,” Chooljian replied.
Sensing a challenge, Emanuel took another swing: “Well let me say this, if they can guarantee a win, then it’s a proper title. How’s that?”
“There ya go,” said Chooljian, charitably. (John Byrne)
*Downstate congressional candidate goes after Rauner: C.J. Baricevic, the Democratic candidate for Congress in southern Illinois, has launched his first ad, and it goes after Republican Gov. Bruce Rauner more than his opponent, GOP U.S. Rep. Mike Bost of Murphysboro.
In the ad, which begins airing in the Carbondale-Paducah, Ky., media market, Baricevic recounts working at a steel mill in Granite City to pay for his college education at Southern Illinois University.
“It was hard work — a good job — and it taught me a lot. That’s why I fought against Gov. Rauner’s devastating budget,” Baricevic said.
The Democrat, a lawyer, represented unions in their court action against Rauner and Comptroller Leslie Geissler Munger to force the state to issue paychecks to state workers during the lengthy budget impasse.
Bost, a former floor leader for state House Republicans, is strongly backed by Rauner for re-election over Baricevic of Belleville. (Rick Pearson)
*The Sunday Spin: On this week’s show, Chicago Tribune political reporter Rick Pearson’s guests are state Sen. Kwame Raoul, D-Chicago; Vince Kolber, Republican candidate for Congress in the 5th District; and Matt Strawn, former Iowa Republican chairman and co-founder of Next Generation Strategies. The "Sunday Spin" airs from 7 to 9 a.m. on WGN AM-720.
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