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.
“Illinois, Kentucky, New Jersey and Pennsylvania are still deeply troubled, but have been among the leaders in enacting (pension) reforms.”
What pension reforms has Illinois enacted that have significantly lowered the taxpayers’ burden?
Moving new employees to tier 2 instead of the more generous tier 1. Not only did tier 2 pension reform save Illinois money but these employees pay more in contributions than the actual cost of their pensions. The additional money they pay subsidizes tier 1.
Capping career-end raises at 6%. In the past, schools could and would offer much larger raises to provide an incentive for teachers to retire and get the high cost of an experienced employee off the local payroll.
Thanks. The PTs are still too high; so, hopefully, the IL pols can make more changes to benefit the taxpayer.