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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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A promise is a promise…
20% of state budget currently…only set to rise percentage wise each year
“Alternative Plan No. 2 calls for taxing all retirement income of individuals who have an adjusted gross income of $100,000 or more.”
If that plan became law, that would mean some of the resident IL retirees’ pensions would be taxed. If so, would that violate the non-diminishment/non-impairment part of the IL constitution on protecting pensions of State of IL retirees?
No, because they’re not diminishing the pension. The pension ceases to be a pension any longer when it hits the pensioner’s bank account. At that point it transforms into income. The income is taxable. The source of the income is the pension but it is the pensioner’s income. Right now pension income is not taxable. They could change that. Pensioners right now are powerful. Nearly a 1/4 live out of state and don’t vote. They are no longer union members so they don’t have representation in the union at the bargaining table. And if they are getting a pension, they’re… Read more »
A new tax won’t help because if history is any guide the funds will just disappear into some black hole in Chicagoland.
Their recommendation also included a “lockbox” requirement that the money is directed at pensions. Without an iron clad requirement it would most definitely be spent on other stuff.
Just do not pay them. Let the courts decide. Do not fund them and run out of money, it is going to happen anyways, so the sooner the better.
Or
Raise taxes and chase out more residents and get even less money in tax revenue. Overly generous pensions have destroyed Illinois for almost everyone. It is not the most disliked state in the Union.