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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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I have a question that nobody in the media seems to be even remotely interested in asking: Where did the Pension money go? These pensions (state and local) were all pretty well funded until the early 2000’s. In the case of the State of Illinois, Madigan rammed a great big fat socialist program through the legislature and didn’t bother to fund it. Then the state simply stopped paying that amount of money into the pension funds. Any guesses as to just which socialist program it was? Chicago pensions are another matter altogether. When Richie Daley started to withhold the money… Read more »
Money for big new “shovel ready” projects have far more acceptance among the general public and politicians than money spent with no fanfare at all toward meeting the state’s actuarially required public pension systems’ requirements. There never are political photo shoots or parades forthcoming for doing that. Politicians always want “their” largesse noticed, after all!
Articles like this always have some version of: “Illinois has been unable to revisit the issue and enact meaningful pension reforms that would address its public pension plans’ funding and create more efficient and effective plans for future hires.” They all miss the most relevant point: Illinois politicians arent unable to revisit pension problems. They are fundamentally unwilling to change the public sector union pension problem because they work completely and wholly for the public sector unions. The solution that Mike Madigan’s Democrats want is “more of the same” in perpetuity. Democrats retain a stranglehold on power. Public Sector Unions… Read more »
Again, I don’t disagree. The state’s fiscal problems will never improve under the status quo’s unwritten rules as to how its politicians go about their duties and deciding what’s more important to them—service to themselves or service to the public. Changing their set of personal incentives as to what’s right in that respect would start to change their mindset. The problem there is that the state legislature is the only body that can do that, and barring a miracle they won’t.