State Government Magic Show Under The Great Quinn-zini

Wednesday, April 18, 2012 | 0

Like millions of Illinoisans, we are growing tired of the misdirection and murky thinking by our elected leaders and government officials in state government. As the gurus at the Illinois State Chamber keep noting, Illinois has a miserable climate for business and we don't think we have hit the bottom just yet. Here are some thoughts.
 
The State of Illinois workers' comp "program" is a smoking mess with still no end in sight.
 
Please note recent statistics indicate about 12-13% of all Illinois state employees have filed a pending workers' compensation claim. We point out there is no private employer on the planet that would survive with that many pending claims on a continuing basis. We also point out our state government should privatize many agencies and services if they can't or won't run things more effectively.
 
As we have advised in the past, if you include state universities, that 12-13% figure means there may be more than 10,000 such state of Illinois workers' comp claims out there. We are also aware lots of the workers' compensation adjusters at Central Management Services have already cashed nice settlements — this doesn’t create a sense of “defense” when we see the folks who are supposed to be holding down the fort making their own claims. Please note the Occupational Safety and Health Administration isn't investigating to stop thousands of "accidents" to vex Illinois government administrators about safety violations. OSHA knows most "accident" claims by state employees don't involve "accidents" and are mostly balderdash. OSHA knows they can't "stop" such accident claims because there is nothing to stop.
 
At present, our state’s in-house workers' compensation adjusting agency Central Management Services or CMS doesn't have the money, staff, claims tools or know-how to manage workers' compensation claims any better. Adjusters are handling thousands of claims each and their claims database is an outdated farce. The goal is to give us the impression they are managing things but when you get rid of the bunny rabbits and magic wands, there is nothing behind them but mismanagement and workers' compensation settlements and payments flying out the door to state workers in amounts well into the hundreds of millions.
 
Speaker Michael Madigan and Senate President John Cullerton are looking into ways to bring in a private claims handling company to take things over the problem with doing so is they don't have any money to pay a private claims handling company! We are fairly confident third-party administrators/insurance carriers have to be laughing quietly when they see the mess and try to plan the logistics needed to straighten out decades of mismanagement.
 
You can't reform causation in the legislature, folks!!?
 
All of it is a magic show the Illinois State Chamber and other business groups are trying to make the "causation standard" higher to estop such silliness. Our problem is they are attacking causation in the wrong place. Whatever the legislature does and says on causation isn't going to "work" because our administrators can take that language and do whatever they want with it. If the legislation says one’s work has to be the primary cause of a condition, the arbitrators can find that. If the legislation says the work has to be the “sole and unfettered cause” of the deleterious condition, our hearing offices can rule in that fashion.
 
We feel you an pick whatever statutory language you like. In our view, you are completely wasting your time — causation has to be reformed in a different place. The administrators are going to find the right dictionaries for their purpose to parse the new statutory language and will then limit causation or they won't. As we have advised, The Great Quinn-zini could immediately "reform" causation with one phone call to Illinois Workers' Compensation Chairman Chairman Mitch Weisz and tell him to cut out the clowning around and end this part of the magic show.
 
You can't cut/fight state government claims without "defending" them
 
Right now, there are thousands of state government workers off on temporary total disability and looking for millions from taxpayers. As we have told our readers over the years, at present, several hundred state workers are receiving comical "odd lot" total and permanent disability benefits for the rest of their lives solely because the State of Illinois doesn't follow the Americans with Disabilities Act and doesn't bring such workers back to modified work or alternative positions. The reason such workers don't seek protection under ADA is because they get a much better deal not seeking reemploymentthey all get way more money not working than working. State government has 500-700 such “odd-lotters” who could all be returned to work today, if they would just find them jobs in state government!
 
We had a reader contact us to tell us state workers don't get more money than working folks when adjudicated totally and permanently disabiled because the State Employment Retirement System only gives such workers about an 8-9% bump over the T&P rates. We laughingly told our reader we don't see any reason our taxpayers should have to insure state of Illinois government workers should get 75% of their salary for life on the taxpayers' dime — if you aren’t sure what we mean, go on to the next section.
 
Watch me pull a rabbit out of my hat pensions for state of Illinois government workers aren't actually "pensions"
 
When we started to consider the issues above, we noted the problem most state administrators are now dealing with is "redefining" state employee pensions. If you aren't closely following the newspapers and other media, you may not know the benefit stream commonly called a "pension" for thousands of former government workers in this state is a magic show — at present, state workers don't actually get "pensions," they get borrowed money our government administrators find at high interest rates and then give to these retired workers in the form of pension-like payments. When you hear the confusing accounting words “unfunded pension liabilities” that actually means “we-don’t-have-any-money-to-make-pension-payments-and-have-to-borrow-it.”
 
Please don't criticize our state's rank and file workers about it, they had no control over the practice of poaching pension contributions out of the system for years. Governors on both sides did it and the confounding practice continues to present. The rubber is starting to hit the road on dealing with it.
 
We want to emphasize the current state of the State Employers Retirement System is a complete magic show it isn't actually a "pension" system in the sense we typically think of such a retirement plan. For the past several years, there has been virtually no money from state workers used to pay the ongoing benefits the Great Quinn-zini and the legislature are borrowing about $3 billion each year and doling it out to retirees. The cost of annual interest payments on the so-called "pension" borrowing is now about $1 billion each year. If they don't stop the magic show and raise retirement contributions and actually use the contributions to run the program, the system is certain to go bankrupt at some point.
 
Try to also imagine how “magical” this concept iswe hire Sam Sample, a state employee at $100K per year, for example. Sam gets a solid salary and great benefits taxpayers hopefully get value for the work Sam does while in their employ. After 20 years and when he reaches the age to retire, Sam then gets a lifetime pension and full health care coverage for life, again paid for solely by Illinois taxpayers. If Sam lives 30 more years, we will pay him lots more money doing nothing in retirement than he did when he was working. Multiply Sam Sample by thousands of state workers getting these borrowed-money-but-not-actually-pensions. Does this help all of us to understand why state government is completely flat broke to the tune of billions?
 
Finally, does anyone think having top-paid circuit, appellate and supreme court judges/justices is a good idea?
 
There are so many goofy government concepts in this state, we just found out about another one that remains galling to the business side of this matrix. Illinois now has the highest paid judiciary in the United States actually, rank and file circuit court judges magically make more money than The Great Quinn-zini! Yes, we aren't kiddingwe mean to tell you we now pay over 950 Illinois circuit court judges more money than our state's covernor! Our appellate and supreme court justices already make at least 10%  more than our highest executive officer. In fact, every single one of our circuit court judges make more money than almost all U.S. governors. The National Center for State Courts has the list on their website and Illinois is numero uno.
 
Governor Patrick Quinn's new salary this year is going to be $179,100. Full circuit court judges in this state were slated to make $180,802 as of last July 1, 2011. The judges are going to receive 3% cost-of-living adjustment raises every year for at least the next eight years or a 29% bump we are fairly confident the governor's job isn't going to be even close to making that much additional money. Please also note the judicial salaries are guaranteed in the Illinois Constitution, making it mildly to wildly difficult to change them. Please also remember they retire at 80% of their wage and we then have to “borrow-pay” their “pensions” like everyone else in state government.
 
Why/how did this happen? Do we get more efficient and fair hearing officers in our courts for all this do-re-mi? Well, we assure all of our readers it is our opinion the folks at the Illinois Trial Lawyers Association had something to do with it. If you want a pro-Trial Lawyer Ass’n judge, get him or her the best salary in the U.S. and great benefits and they are certain to smile in your direction in court. Please also note defense lawyers have little reason to donate money to judicial campaigns in contrast, plaintiff lawyers across Illinois donate millions to insure friendly judges and justices.
 
What does it all mean? Will we ever stop the magic show and get back to good government?
 
Well, our worry is the business of doing business in what one of our readers jokingly calls the Peoples Republic of Illinois. We assure all of you Gov. Quinn has told our legislative leaders to come up with pension "reform." We have no idea what that may mean. We know the folks at the State Chamber are fighting the good fight and tomorrow, they are bringing in Gov. Scott Walker to a confab in Springfield to discuss the problems above and many more for information, please go to their website at http://www.ilchamber.org.

Eugene Keefe is a founding partner of Keefe, Campbell and Associates, a Chicago workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.