Why Jim Edgar Has Zero Credibility on Illinois Budget, Pensions: It’s Not Just the ‘Edgar Ramp’ – WP Original
“Seems that not all recent Illinois governors end up in prison, but perhaps they should be jailed for this crap.”
–Actuary Mary Pat Campbell
By: Mark Glennon*
Former Illinois Governor Jim Edgar is getting lots of attention for his recent comments that Governor Rauner should give in to Democrat and public union positions to resolve the state’s budget impasse. Rauner shouldn’t “hold the budget hostage” by demanding reforms as a precondition to the tax increases that budget resolution necessarily entails, Edgar said.
Here’s why he has no credibility on that. Keep in mind that during most of his term as governor the economy was “like a rocket in flight,” as described by a counterpart governor at the time, Pete Wilson in California. Also keep in mind that Edgar’s Republican party had majority control of both houses of the legislature for much of his term.
First, Edgar is a leading culprit in today’s budget crisis. Pensions are central to our budget shortfall. What did Edgar do with pensions? The booklet he prepared as part of his duties of an outgoing governor said the following: “The governor approved the most significant increase in pension benefits for state workers in a quarter century.” The booklet also noted Edgar agreed to other improvements, like adding vision and dental coverage and long-term care insurance, as reported in the JournalStar.
Worse, Edgar is responsible for the infamous “Edgar Ramp,” the obscenely backloaded can-kick on pension funding enacted in 1994. It was central to the finding by the Securities & Exchange Commission that Illinois misled investors in connection with bond sales after Edgar left office. The Edgar Ramp was unworkable, the SEC basically said, and Illinois should have told bond buyers. The fraudulent nondisclosure was not Edgar’s fault, but the materiality of the Edgar Ramp to the fraud finding and the state’s financial mess is.
Second, he has no understanding of pensions whatsoever, and offers no real answers. Here’s what an actuary who follows the pension crisis closely, Mary Pat Campbell, said about some of Edgar’s recent comments on pensions: “Seems that not all recent Illinois governors end up in prison, but perhaps they should be jailed for this crap.” She went on in some detail about why his comments on pensions were so foolish, and concluded: “Shame on Gov. Edgar for mouthing the same bullshit everybody else does in favor of underfunding the pensions…. I guess ex-Gov. Edgar wants to cover his own ass for the pensions being underfunded in the go-go 90s, when he was governor….”
Edgar’s long-held solution to the pension crisis (which is the lion’s share of the budget crisis) is that we just have to pay up. How can we just pay up? Neither Jim Edgar nor anybody else has ever offered any combination of tax increases and spending cuts that would allow us to “just pay up” as he wants. It’s impossible.
The central problem is Edgar’s long-standing allegiance to public unions. During Edgar’s term, and during Jim Thompson’s before him, governors had no real choice but to give in to whatever unions wanted. That may excuse some of his conduct during his day, but times have changed. Public unions can be reined in. If they aren’t now, Illinois is doomed. Edgar is behind the times.
Third, he’s biased because he’s soaking taxpayers. It’s genuinely difficult to see how anybody with a conscience, with things as bad as they are, can take from the state as much as Edgar does. For 20 years of service he collects a pension of $151,778. He began collecting his pension in 2001 at age 55. He’s also paid $71,760 to be Distinguished Fellow at the University of Illinois’ Institute of Government & Public Affairs. That’s according to a current salary database, although the Tax Foundation earlier reported that he was paid $177,630 for that position. Over $300,000 per year total comp from taxpayers (including his pension), they said.
What makes that so annoying is that, today, I see so many highly paid people taking big pay cuts to join the government because they want to help. They’ll get far lower pension benefits as Tier 2 employees than Tier 1s like Edgar get. Plenty more people volunteer loads of time for no pay through advisory boards and other activities.
I’m more interested in their opinions, and those of an honest actuary, than Jim Edgar’s
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.