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In a remarkable Friday afternoon news dump, at the end of last week Gov. JB Pritzker signed a controversial pension bill that will increase pension benefits for many Chicago policemen and firefighters....This is a really bad outcome for Chicago. As a result of this change, the future liabilities of the police and fire pension funds have risen significantly.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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The pension contagion falls not only on those living in Chicago but will ultimately reach those living outside the bluest areas of the state.
Let’s see what the rating agencies have to say about this with respect to the City’s bond ratings. Remember, the City pays the agencies for the ratings. In the past, the City has largely been given a pass on the unfunded liabilities which many folks think has been a way too generous treatment of the City’s financial condition. My prediction is the agencies make another superfluous and meaningless comment on this bill and just take the money from their client.
Once again, trust fund baby JB the Hutt governs as he lives. The Hutt thinks Illinois has offshore trust funds like he does. These fictitious funds would ostensibly pay for his and his fellow leftists’ imprudence and incompetence. If there were any justice, imbecilic state Sen. Robert Martwick would be held personally liable for this, but there is no responsibility to be seen in any of the Springfield political animals, much less the clownishly inept Martwick.
Chapter 9 just moved much closer than any of these political animals thought. Maybe that’s the intent.
You bring up a related point namely offshore trusts. Things like those trusts are why the pie in the sky proclamations of the graduated income tax won’t work as planned. The ultra wealthy have assorted gimmicks to a void taxation while the middle class doesn’t meaning the graduated taxx will be a scheme to tax the middle class. It is as simple as that…the rich won’t pay.
The only fix for the pension is for a private sector taxpayer is to leave the state. The sooner you do that the better for you and your family. As PPF says lots of taxes to raise and pensions must be paid, but only by the residents. So, if you leave you are off the hook for the payment.
Pretty good article by Durkin and Day. However, how do you come back from a locked in fiscal disaster? Martwick needs to answer to this – He can lie, as most would expect but he should have to answer. Do not see the next Mayor having a chance to fix the pension mess – that means BK is really the only fix.
Martwick has only one function in life: Increasing pension benefits whenever and wherever requested by public unions.
I have an answer, same as the Nobel Prize winner in economics said years ago.
Stop digging file BANKRUPTCY immediately.
Just wondering here if Crain’s finally woke up to reality
After losing so many subscribers, you’d think Crain’s would have snapped out of it years ago. I greatly doubt there has been any ideological change among the lefty writers and editors there.