CBS 2 Chicago | Some University Employees Double Dipping For State Paychecks

Christina Tobin, Vice-President of TUA, was featured in the following news story from CBS 2 Chicago.

CHICAGO (CBS) – Some public university employees have figured out a way to keep their jobs and double their salaries.
CBS 2′s Dave Savini has been investigating this lucrative, yet legal, sweetheart deal involving government pensions.
One beneficiary of this pension law is Mark Wilcockson, a Northeastern Illinois University finance director. Last summer, he retired from the university, started collecting his pension then, two months later, was hired back to do the same job.
“It’s a benefit I earned after 38 years working in the system,” said Wilcockson about his pension.
Before retiring, Wilcockson was earning $168,648. He returned to the job at a lower salary: $123,000.
However, add in his $101,312 annual pension and his income grew to $224,312.16, a 33% increase in cash.
“I’m sure you’re here because of my salary, my range, because it happens to lots of other people,” said Wilcockson. “There’s faculty. There’s people in the mail room that do this kind of thing.”
He’s right and, again, it is all perfectly legal.
Another example is John Hoeppel, a director at Northeastern Illinois University, who retired making $109,596. Two months later, he was hired back earning $96,000. Add in his $97,896 pension payment, and Hoeppel’s income went up 76% to $193,906.32.
CBS 2 found employees at the University of Illinois at Chicago, the City Colleges of Chicago, and Chicago State University who also retired and returned to draw both a university pension and a university salary.
State Rep. Daniel Biss, (D-Evanston) is taking action now to stop this double-dipping practice. He says the pension systems in Illinois are “troubled”. The former University of Chicago math professor says taxpayers are being hit twice and it needs to stop.
“You have people who are able to retire and move to a different job which is often in violation of the spirit of the law,” says Biss.
Earlier this week, Biss introduced legislation to force universities to reimburse the pension system for double-dipping employees. So, if a university allows an employee to retire and collect a $100,000 pension, and then rehires that person, the university would have to repay that $100,000 to the pension system. This could be an expensive proposition and put and end to the practice.
Christina Tobin, of National Taxpayers United of America, has been investigating the university pension system. She says the collecting of two taxpayer-funded checks needs to stop.
“It’s definitely taking advantage of a flawed system,” says Tobin. “Currently the pension system is unsustainable.”
Tobin says the state has failed to sufficiently fund public employee pensions, putting them in jeopardy, as well as the poorly designed pension system itself.
Wilcockson says you cannot blame retirees.
“There’s nothing wrong with what I did,” said Wilcockson.
The real blame, say pension experts, goes to lawmakers who created the system.
Biss’s proposal was prompted by the CBS 2 investigation. If approved, universities would still be able to rehire retirees, but would be required to reimburse the state for pension payouts to rehired employees while they draw a university salary.
Biss said many retirees get around laws against double dipping by being called “temporary employees,” even though they work full time.

Belleville News Democrat | Who should pay for teacher pensions?

Jim Tobin, President of Taxpayers United for America, is quoted in the following article by the Belleville News Democrat.

SPRINGFIELD — State legislators from the metro-east say they’re open to the idea of shifting some of the state’s costs for teacher pensions to local school districts, but they aren’t fully embracing the idea just yet.

Local school leaders are bracing themselves. They say it could be a huge expense coming at a time when their budgets are already hurting.
“It would be devastating,” said Granite City School District 9 Superintendent Harry Briggs.

If the cost is dumped into local school districts’ laps, some of the school leaders hope it will be a phased-in cost, giving them time to deal with the new burden.
Gov. Pat Quinn, House Speaker Michael Madigan and Senate President John Cullerton have each talked about the possibility of shifting all or some of the teacher pension obligation to school districts.
The move could save up to $1.3 billion a year for the state, which is struggling to pay its bills. School districts, though, would have to cut programs, increase property taxes or do both in order cover the cost.
Briggs said his district already had its state aid cut by $1 million this year, and the district lost $400,000 in state payments for transportation.
“Through no fault of our own, we’re having a revenue problem, and we’ve done everything possible to reduce expenditures and to do our due diligence. But it’s a very difficult environment,” he said.
Briggs said he has not yet calculated the potential cost to his district, “but I’m sure it would be a tremendous liability, because I have over 400 teachers. I would suspect that it’s a very large number.”
The five pension systems for state employees are underpaid by about $83 billion, in part because of the state skipping payments into the systems. The state will put about $4 billion into the systems this year to cover current obligations and to cut into the unfunded liability. Quinn’s proposal is to shift to local school districts and colleges all or part of the roughly $1.3 billion contribution to the teacher retirement system.
Proponents of the idea says school districts need to have “some skin in the game.” They say school districts have been giving pension-sweetening deals to educators at the end of their careers. Those deals cost the school districts little, but can result in big, life-time payouts from the pension system.
That’s a legitimate issue that needs to be addressed, said Senate Majority Leader James Clayborne, a Belleville Democrat.
“For a long time, the school districts haven’t had, really, any accountability regarding raises and increases, with how those impact the state’s budget as a whole,” Clayborne said.
But he stopped short of saying he supports shifting costs to school districts.
“I’m in favor of sitting down and discussing it, if there’s ways that we can resolve it without severely hurting the school districts,” Clayborne said. “It should be discussed and it should be put on the table.”
Rep. Paul Evans, R-O’Fallon, said the argument that school districts need to have a stake in the pensions costs has validity. “If it doesn’t cost you anything, you’re not concerned about the price,” he said.
But Evans said he’s concerned that if the state cut its share of the costs, the state wouldn’t give taxpayers some corresponding relief from state taxes. So, in effect, residents would just be hit with a bigger property tax bill.
Some school leaders think Quinn and state legislators are just trying to push the dirty job of raising taxes onto local school boards. In the eyes of voters and taxpayers, the school boards would be the bad guys.
Belleville School District 118 Superintendent Matt Klosterman said a number of proposals have been discussed, each with different funding formulas, so he doesn’t have a cost estimate yet for his district. But any shift will be expensive for local schools, he said, and likely will require a tax increase.
“Are we real excited about that? No,” Klosterman said. “The state, over a period of time, has made some choices where they haven’t kept up with their responsibility for the (pension fund) contributions, and now we’re in a position where it’s a significant problem, and they want to put it back to us.”
He added: “It’s real easy for them in Springfield to say, ‘Well, we’ll give you the ability to levy a tax.’ Well, that tax isn’t coming out of Springfield, it would hit the residents that live within our school district.”
Retirement bonuses
School districts for years have offered incentives or bonuses to teachers in the final years of their careers. Some examples from recent teacher contracts:
* In Belleville District 118, a teacher who agrees to retire receives a $15,000 incentive, spread across the final four years of employment.
* At Triad, a teacher receives a $9,000 bonus over the final four years of employment.
* At O’Fallon Township High School District 203, a teacher receives a 5.6 percent raise in each of the final four years of employment.
Klosterman said a teacher’s retirement allows the district to save money by hiring someone at the lower end of the pay scale. He said one advantage of the incentive plan is that it helps with planning, because districts are given notice when a teacher is about to retire.
“We’re not necessarily incentivizing them to retire earlier than the system allows for them to do,” he said. “The system is, 35 years (of service) or age 60. So we’re not incentivizing them to leave before they have the 35 years or they’re 60 years old.”
Briggs, the Granite City superintendent, said the end-of-career bonuses are not significant pension boosters, because the pension system has been changed so that the maximum salary increase that can be counted toward a pension is 6 percent.
“There’s no golden parachute any longer,” Briggs said. “If you’re talking about increasing someone’s pension by 20 percent or more, those days are gone. We’re protected by law. I think it’s a debate to deflect what the real issue is, and that’s the unfunded liability that the state has created.”
Can it pass?
Passage of politically charged legislation will be difficult, especially in a year when every legislator is up for re-election. Legislators from Chicago, though, would likely find it easier to support the plan. Chicago schools have their own pension system, under which the city provides the employers’ contribution to the pension system.
Rep. Scott Penny, D-Fairmont City, said: “The state has been paying, for downstate areas, a significant portion of the teachers’ retirement system. Contrary to what everyone thinks, the money was not going to Chicago and getting spent there. Downstate Illinois was getting a significant portion of the teachers’ pensions paid by the state — including the taxpayers of Chicago.”
Penny, a former Collinsville school board member, said the proposal would be “a dramatic change, and it’s going to impact local school districts.” He added, “it’s a complete realignment of the concepts of how the system’s funded, so I’m waiting to see what the proposals are going to be.”
Other local legislators also are taking a wait-and-see stance.
Rep. Jerry Costello II, D-Smithton, said: “It’s rhetoric right now. This stuff changes on a daily basis. I think right now, it’s a litmus test to see how people feel about it.
“Something has to be done, because it’s unsustainable. Everybody involved has to sit down at the table.”
Rep. Eddie Lee Jackson, D-East St. Louis, who is a former educator and serves on the House’s Elementary and Secondary Education Appropriations Committee, said he wants more information on the effect to local schools before he decides on whether to support the idea.
As for whether it makes sense for school districts to have a greater stake in actions that determine teacher pensions, Jackson said: “I’m not disagreeing with that, but I want to look at the effects of it before I say ‘yes’ or ‘no’ to the possibility of that occurring. That directly affects the pension plan of the state when those salaries are increased.”
Jim Tobin, president of Taxpayers United of America, opposes the idea, which he said will result in “huge property tax increases” but no corresponding decrease in state income taxes. He said a better idea would be to have teachers pay more toward their pensions, and an even better idea would be to end the pensions.
“Just like us in the private sector, they could have Social Security and 401(k)s,” Tobin said. “That, of course, in the long run would end the unfunded liabilities.”
A phased-in shift?
Clayborne said the possibility of phasing-in the cost shift is something that’s being discussed. That would make the proposal slightly more palatable to school leaders.
Collinsville Superintendent Robert Green said he didn’t see any way around making local districts pick up at least part of the tab. “But if they expect us to pay 100 percent, that’s going to be very painful,” he said.
Green said one idea floating around Springfield was to create a separate local tax levy for pensions. “That’s putting something else on the backs of local taxpayers,” he said. “This is not the time to do that.”

examiner.com | Taxpayer watchdog sues Riverside Brookfield

The following article from examiner.com features TUA’s lawsuit against the Riverside-Brookfield school board.
January 24, 2012. Chicago. The taxpayer watchdog group Taxpayers United of America filed suit yesterday in Cook County Circuit Court against the Riverside-Brookfield, Illinois school board. The lawsuit claims that Riverside-Brookfield administrators used money from taxpayer coffers to fund a PR campaign in favor of a tax increase that would benefit their school district. Government entities and officials are bared from using taxpayer money to promote political campaigns, including referendums.
According to Jim Tobin, President of Taxpayers United of America, “In more than thirty years of anti-tax activism in Illinois, I can say without equivocation that this has been, by far, the most shameless, open and notorious use of public resources in support of a political outcome that I have ever seen.” The political effort Tobin refers to is the April 5, 2011 ballot initiative to raise property taxes in Riverside-Brookfield to fund the school board. The campaign by administrators included television commercials and physical mailings, all paid for with taxpayer money.
In accusing the Riverside-Brookfield School District 208 of illegal electioneering, Taxpayers United is asking the court to make a declaratory judgment and impose injunctive relief and civil rights damages.
This isn’t the first legal challenge made against this very same 2011 ballot initiative in Riverside-Brookfield. In April 2011, members of the Cook County Board filed an initial suit to stop the property tax increase ballot measure. In the suit, the commissioners argued that the dollar amount used on the ballot for voter approval wasn’t the actual amount that taxes would rise. In fact, voters were being shown a tax increase much lower than the actual increase they were being asked to vote on. In addition to Riverside-Brookfield, 8 other municipalities were sued for the same tactic. Officials didn’t dispute that accusation. Instead, school board authorities argued that they didn’t need to use the actual amount.
Since the school board was well aware that they were using fraudulent tax increase numbers, the suit named each board member individually as respondents. “The taxpayers in Riverside-Brookfield should not be forced to pay for the defense of these board members who knew what they were doing was wrong but went ahead and did it anyway,” TUA Vice President Christina Tobin said at the time. In response to the deceptive tactic of using phony tax increase numbers to mask much larger increases when asking voters to approve them on ballot initiatives, the Illinois House voted 110-0 to ban the deceptive practice.
TUA decided to act after both the Attorney General Lisa Madigan and Anita Alvarez failed to take any action. For more information on Taxpayers United of America, visit their website at www.taxpayersunitedofamerica.org.