Posted May 29, 2015 11:15 pm by Comments (10)

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By: Mark Glennon*

Updated 5/31/15 (adding Crain’s where indicated)

 

There’s simply no way to justify the Sun-Time’s characterization of Chicago’s proposal to address its pension crisis, now contained in a bill before the General Assembly. This evening, the headline in the Sun-Times is, “Pension proposal to save city taxpayers $843 million over 5 years, projections show.” The article goes on to say that, “the legislation aims to strike a balance between curbing pension costs and providing enough money to keep the funds paying out benefits to retirees.”

 

Flat wrong. The bill does nothing to reduce costs. It would push off the amount the city pays in. Report it as “can-kicking,” if you want, or use some other term, but that’s all it is, so report it that way. Chicago has been paying in only about one-fourth of what it should be to properly fund its pensions, a plain fact that that most reporters have ignored, and now it wants to do more of the same. This crisis was allowed to get to the stage it is in part because of shoddy reporting like that.

 

Update: But Greg Hinz at Crain’s went further to spin the can kick into something different. His headline calls it a “plan to fund police, fire pensions.” He writes that it would require the city “to shore up the financially weak pension funds that cover police and firefighters and the measure would require the city to come up with hundreds of millions of dollars a year more than it does now.” It’s a reduction in near term contributions that are scheduled under a 2010 reform law passed by a Democratic General Assembly and signed by Quinn.

 

Sure, buried deeper in the article Hinz mentions, as did the Sun-Times, what the real facts are. But he knows most readers are quick ones who read headlines and parts of stories. He knows exactly what he is doing. Nobody know how to spin news better than reporters when they want to, and Hinz wants to spin this favorably for can-kickers.

 

That error was probably just sloppiness, but then there’s Natasha Korecki, Sun-Times political reporter, who has gone shameless with bias. Where do you start?

 

Today, her story says,  “Gov. Bruce Rauner has demanded that state lawmakers deliver a package of reforms to him by Sunday.” The headline emphasizes the “demand” as well. There was no demand. Watch the press conference yourself if you want to see how untrue that is. Most of the other media characterized it fairly, saying things like, “Rauner Cautiously optimistic for Illinois Budget Deal by Sunday.”

 

Recently, Korecki wrote about an Illinois House vote over right to work. Most of the press properly described it as a vote on a sham bill put up by Speaker Madigan, on which right to work supporters refrained from voting. But Korecki’s headline screamed, “Right-to-work goes down in flames in Illinois House with zero yes votes.” Just the spin Speaker Michael Madigan hoped for.

 

Back on the subject of pensions, this evening I got an email from a pension actuary in Maryland, who grew up in suburban Chicago. He’s been watching with horror what’s happening in Chicago. He wrote in his email,

 

It’s hard to fathom how bad the finances are w/r/t pay and benefits of govt ‘ees. Poor taxpayers of Illinois !! The unions (many places around the country too) simply bargained for pay and pensions exorbitantly too large and unaffordable. It’s going to blow up — no doubt. Well in many ways it already has, the taxpayers have been getting shafted like crazy…. Another way to look at the mess is that Liabilities for the non-Actives (retirees) are 6.6B out of the 10B Accrued Liability (AL).  There’s only ½ the money in all the assets to cover Retirees !!! That means NONE for the Actives. And Actives are earning extra pension each year worth $.2B.

 

Think hard about what that means. It’s ugly. If you don’t understand it, don’t expect an Illinois reporter to explain it. Few have really tried to understand pensions. Those are the kinds of facts they should be explaining, not repeating political bunk about “savings” that really are just deferrals.

 

Find some honest actuaries who will talk, reporters, and not those paid by the pensions to paint the rosy picture that has deceived us. And, Sun-Times, either label Korecki as an opinion writer or get rid of her.

 

*Mark Glennon is founder of WirePoints. Opinions expressed are his own.

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Paul

Here is a link for a learned opinion on Cook County pension reform from States Attorney Alvarez certainly relevant to a website covering all sides of the news on pension reform http://capitolfax.com/2015/05/26/alvarez-says-preckwinkle-pension-bill-is-unconstitutional/ . Kinda amazing this missed wirepoints…unless wirepoints is trying to sell a narrow viewpoint.

mark glennon

We linked to a story about the Alvarez opinion as soon as it came out, and her opinion is one we said we agree with. Please confine your comments to honest ones.

Anonymous

I apologize Mark, an oversight on my part not trying to be dishonest. Is the link gone? I will go check for it again. probably lack of diligence on my part.

Paul

The link is there no doubt, again I apologize for missing the Alvarez link. And as I posted below allowing for comments shows your website is not adverse to comments of counter viewpoints.

Paul

Here is a learned opinion that seemed to escape Wirepoints on pension reform from the Dean of Illinois College of Law http://www.news-gazette.com/opinion/guest-commentary/2015-05-24/solutions-fixing-states-pension-crisis.html

Paul
Mark lets not have the pot calling the kettle black. Wirepoints is titled “NEWS” yet is full of opinion pieces that are slanted to a particular pointed view. Did you label your pieces ” opinion.” There was recent interview artical with the Dean of the Illinois school of law commenting on potential pension reform changes in light of the recent Supreme Court decision…..but no mention or link on wirepoints. Same with States Attorney Alvarez shooting down Cook County Reform on legal grounds. ( but maybe I missed those stories on Wirepoints) Lets not call out the Sun Times without a… Read more »
mark glennon
Paul, you are wrong. We separate our comments by putting them in italics and link to countless stories with perspectives we disagree with. Moreover, nobody who comes here has any doubt about our perspective and purpose, as opposed to the regular press who claim to have no agenda. You are particularly wrong to suggest that we suppress the argument that pension reform is unconstitutional. You know full well that I have said I think the Supreme Court’s decision was rightly decided (at least as to earned benefits), and I have written that expressly. We linked to the Alverez story. The… Read more »
Anonymous

Mark , you also allow for comments that don’t always comport with your stated “perspective and purpose” and for that your readers get counter perspective.

K Berg

I agree. Sun Times, please protect the public from spin put forth as fact.
You’d think whoever approves this stuff for publication would be more conscientious. Journalistic integrity?

Bross

It’s easier to read the trib…

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