Ted joined Cat Peterson to discuss the current status of the SAFE-T Act and why its so harmful for police officers, the ongoing Jenny Thornley worker’s comp fraud saga, why Illinois lawmakers refuse to cut taxes, the pension funding crisis at the state and Chicago level, and more.
Interview starts at 4:05
Read more from Wirepoints:
- Judgement entered against Jenny Thornley but still no action on alleged involvement of Pritzker’s office in fraudulent worker’s comp claim
- States across the country are cutting taxes…but not Illinois. Not even with “highest on record” budget revenues.
- Red states, blue cities: Who’s to blame for America’s homicide crisis – Wirepoints Special Report
- Johnson’s next headache. Chicago’s pension funds are running out of money
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
No Crisis, PPF says there is plenty of money and plenty of places to raise taxes.
No solving this issue now, much too late. Only way out is to get out.
A new book considers a problem often discussed here: Imagine, sometime in the next decade, that the governor of Illinois and the mayor of Chicago hold a joint press conference to declare that the state and city can’t pay their bills. Schools close, crime spikes, garbage goes uncollected, and public employees protest proposed job and pension cuts. It’s a mess. A brief book review may be found at https://www.city-journal.org/article/review-of-in-a-bad-state-by-david-schleicher I’m guessing the legal and financial solutions are not as straightforward as partisans repeatedly assure us here. Those assurances seem premised on the continuing rule by the tools of public employee… Read more »
Got the book and will be reading it shortly.
I absolutely agree with you! I just don’t have faith in any of these numskulls. They are entrenched and are in the majority in all branches. These are the hardcore people at the factory still complaining about their two coffee breaks, their 45 minute lunch written into their contract, as the days go by the equipment is unbolted and removed off the factory floor to prepare for shipment to Reynosa, MX to set up shop there. The factory lights go dim, there is no more work, layoffs are happening. WARN has been given legally. The workers? Still complaining about how… Read more »
Just the other day we heard of the millions JB has for the immigrants for health care. Well why not fund the pensions instead of the immigrants? After all the pensions are a prior commitment.
Pay your bills Illinois.
As a member in good standing of the group you refer to as “jealous haters”, I want to make a few comments. Public pensioners such as yourself may hold a lien on every piece of property in this state. Apparently that’s not enough for you. You keep trying to claim that ephemeral real estate known as the “moral high ground”. You have absolutely no claim on that. Your union and its members have destroyed public education while bleeding the public dry. And then you blame everyone else for the havoc you have wreaked. But it’s a contract, you whine ad… Read more »
Absolutely true. There is no moral high ground here as the state is run by thieves and many more grifters. On top of those it’s run by idiots who couldn’t manage a hot dog stand. Cash those pension checks while you can, I never want to begrudge what they deserve but the only thing they have is the corrupt politicians in their pocket. The amount of union members who wisely live in NW Indiana or Wisconsin is much greater than any of us would like to believe. That is sometimes allowed depending on which agency you work for, not everyone… Read more »
Yes but these thieves and grifters were elected by the voters and the ones too lazy to not go and vote against them. Like it or not that is the way it is.
And Bernie Madoff’s clients voluntarily invested their money. Guess they were just too lazy and stupid to investigate and discover that it was all a scam.
Madoff could not have perpetrated the scam without investor money; clearly it was the investors’ fault. So why is Bernie Madoff sitting in jail?
Of course I know who you’re replying to. With the exception of a few commenters, everyone just parrots your echo chamber whining of “mean old unions”. Complaining that people can join together and collectively bargain for their compensation will also never hold the high ground. People like you think if employees don’t just take the gruel that you serve up then they are somehow thieves. I know this is a difficult concept for you to understand but employees are allowed to negotiate for their best wages and benefits. Pensioners hold both the legal and moral high ground. Getting out of… Read more »
Wow. A soaring defense of… collective bargaining.
Good morning PPF. This is somewhat off topic but I’ve double checked with the Illinois Department of Revenue and wages earned in Illinois are taxed in the year they were earned by the state. This includes Pensions and voluntary retirement programs. The gains are currently exempt from State Tax.
Please post a link to your source. Pensions and retirement income is definitely not taxed in Illinois. Retirement contributions that are pre-tax for federal are not taxed in Illinois either. Show me where schedule M adds these contributions to Illinois AGI.
Optimistic thinking that something that can’t be changed in the Illinois constitution because progressives have shown that rules and laws are optional. Good luck with that strategy because it’s a losing financial proposition. It’s tough when you “hold out hope” that JB, Biden, Brandon Johnson, et al will fix the mess. Not even living in reality. Democrats and socialists have shown us that the rules are optional for them. You think that anyone will think of the “poor pensioners”. They will gladly turn on you to save the state and themselves. Communists have done this time and time again throughout… Read more »
Let the pensions run out of money and the courts and lawyers will sort it out.
Illinois is already one of the highest taxed states in the country. Let’s see if the courts can magically make money appear that is not there.
I’ve already addressed this but I guess when you just spam the same point it doesn’t matter to you. The state brings in over $50 billion in revenue this year. A pay go pension system would cost the state around $15 billion. Plenty of money for pensions and bonds just not for all the other services. So yes, the courts could easily step in and direct payments towards those that have a contractual right to the money versus feel good spending. No magic needed. Plenty of money available.
But those are feel good programs to assure the status quo of getting re-elected. My community for example let its municipal pension funding drop but the good news is the City, among other things, built some new pickleball courts. Now out of the two choices what situation made headlines in the local fish wrap? The people all smile and cheer the good news while ignoring the true realty of the issue in true Illinoisan style.
YEs you are correct but be prepared to keep repeating yourself because these are Illinois people meaning, quite frankly, they aren’t vey smart
I agree RB. The reality is that if a fund runs out or almost out, the courts will step in for state pensions and demand payment if the legislature doesn’t do its job. At that point, those constituents that only cared about the pickle ball courts and other feel good spending will be smacked with reality. One need only look at the pension intercept law (local pensions) and Harvey IL to fully understand the priority of pensioners before other spending on current services.
I believe Peoria instituted a pension funding fee temporarily while Alton sold off its water department to get funds to beef up the pensions. Now, in Alton’s case, the people pay higher fees for water but that’s how the ball bounces. My local area is considering a new sales tax for pensions with the team line that goes something to the effect of “out of towners pay the tax,” The whole thing is hilarious and y guess is should they impose a sales tax the amount that usually came from tax revenues would be spent elsewhere al la “Illinois style… Read more »
0h my look…my local Mayor must have downvoted me
PPF – Chicago is the epicenter of the problem. They have far fewer ways to raise revenue. And adding additional taxes will be difficult from a legislative and practical perspective. If the smallest of the funds – the fireman’s fund – and at 18 percent funded it is possible – goes paygo it looks like like that is a billion in new cash flow obligations. Given the mayor’s penchant for supporting the schools above all else, the other funds will likely quickly suffer too. Lightfoot consistently pinged on Springfield to help, but with their credit rating already in the ditch,… Read more »
Those pensions are a mortgage on Illinois real estate. They will be paid or there will be property confiscation. It is as simple as that.
It doesn’t take long for property confiscation to become abandoned blight. Unless pensioners want to live in rat and weed infested neighborhoods, they’ll find that confiscated property is hard to convert to monthly dollars. It took about 30 years for polarized city-dwellers to destroy Detroit. I think the government is still tearing down more houses than are being constructed by workers paid at union scale. Perhaps correlation isn’t causation but our Democrat- and union-run metropoli seem to be in a race to destroy what used to pass for civilization.
“I can foresee where businesses are coalescing around the idea that Chicago is uninvestable.”
Already here. I have multiple projects on hold from two years ago none looking like they are going to restart. One went from 75 condos, to 80 apartments and now the out of state investor is considering a drive through fast food restaurant as that is now the best use of the land. And kid you not a national fried chicken chain is being pitched. This is near west side too ya know, the “hot” neighborhood.
The Federal courts will be involved in this one for sure. Outcome could be much different.
Illinois AG – “Your honor, if you don’t grant us relief, we will be forced to raise taxes.”
Federal Courts – “So raise taxes. Next case.”
Not so, the only group that can raise taxes is the legislature. Courts cannot order increases in taxes. They can and will direct spending of the money that is there. Necessary services, pensions, and more. Everyone will end up with a haircut, just wait and see. Pension money will have to be paid, but it may be years late in coming. Even the courts can see by raising taxes you kill future tax revenues by losing population and businesses. The truth is that people are fleeing because of taxes and then you get nothing for generations to come. Ken Griffin… Read more »
I’m not saying the courts will raise taxes I’m just stating that the court won’t offer relief just because the legislature doesn’t want to raise taxes for political reasons. “A governmental entity can always find a use for extra money,” the Court observed, “especially when taxes do not have to be raised. If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.” Taxes going up or residents leaving is not a reason. The state was spending around $40 billion per year… Read more »
I have always maintained that bankruptcy receivership is an excellent path to restructure these constitutional promises. From that point with the fingertips at the edge of the cliff, hard choices could “potentially” be made. Remember, the courts, lawyers, politicians, public union members and union employees are all part of the same crowd. They will do whatever they need to do for survival. They are animals truly backed into a corner. The state could completely burn to the ground (Chicago will lead the way) and diehard communist union members will be with teaspoons on the Titanic. Courts are so corrupt I… Read more »
“hard choices could “potentially” be made” Agreed. Hard choices like statewide tax increases and cuts to spending will be first. There is no bankruptcy option for the state but one would think this could be an option for cities. Then you look at Harvey Illinois and realize that bondholders will get decimated and city services will be drastically cut. I believe Harvey had to cut 40% of its firefighters and half of its police force. Bondholders getting pennies on the dollar. But guess what? Pensioners are still being paid. Now there may come a time when they too are cut… Read more »
PPF – you are getting to the heart of the matter. If numerous municipalities in the State become like Harvey, the State becomes a largely unlivable place for anyone desiring a decent life. The prospect of this happening is not hypothetical.
Unless I am mistaken bankruptcy protection is not an option for a State
OMG stop! It’s about OVER-PROMISING! Can anyone do math in this state?
Nope. The state knew exactly what it promised and didn’t put enough money aside to keep the pension funds healthy. The regular costs of pensions is not what is crippling the state but instead it’s the debt. Pay your debt and you have no problem keeping up with actuarial payments.
To paraphrase Jack Nicholson they can’t handle the truth. Truth often isn’t as soft and cuddly as our belief system would prefer.
It’s a good idea when you’re young to learn the positive and negative sides of money saved and money spent when compounding interest comes into play. Those who learn to save and invest can reap its rewards while those who spend frivolously and even need to borrow to sustain that cash flow can come to rue the negative side of borrowing without a plan for quick and sustained repayment. If you learn that lesson well early it can work in your favor instead of against you. That same idea applies to paying for governmental expenses as we argue here endlessly.… Read more »
“the state knew exactly what it promised and didn’t put enough money aside”
Isn’t that the very definition of “over-promising”?
No way, Jose! Its the definition of putting money for towards your re-election purpose as your higher priority. Supporting the constituion is a much lower personal priority issue apparently. Nice try, though.
“Illinois’ pension crisis isn’t about residents not paying enough, it’s about politicians,”Absolutely! Illinoisians did their part, this is between the Government and it’s employee’s.
My money$ on the Government.
Well that government owes more money and the only way government gets money is from Illinois taxpayers. So the government will need to cut spending elsewhere to pay pensioners or they will need to get more money from the taxpayers. Since you don’t want to be included in the process, we will just let you know what you owe in additional taxes.
And dont forget that Government is run by elected officials of Illinois meaning it is the will of the people. Those too busy to vote playing at my aforementioned pickleball fields are obviously happy with the status quo meaning it is fine with them too.
IL democrats have created a giant fraud of a pension system
— double and triple dip pension pigs
— pension spikes based on an inflated salary on the last day of work
— pension sweeteners made in the dark of night
All leading to a state that creates public employee pension millionaires
IL Republicans were the ones that sponsored the pension amendment to the constitution. IL Republican Governor championed the idea of a 3% raise each and every year. IL Republican Governor set up the “pension ramp” so that we would short change contributions and then have to pay much more now and well into the future. Blaming the pension mess on IL democrats is ridiculous when both parties are to blame. Double and triple dip pensions don’t cost a dime. Instead of a double dipper hired, a new employee with pension rights would be hired and the double dipper would have… Read more »
In case you forgot, the IL Republicans haven’t run the General Assembly for 26 years. More to the issues: Illinois taxpayers on the hook for pension double-dippers https://www.thecentersquare.com/illinois/article_37233406-09d3-11ec-b4ef-cbf22cd17503.html Pension spiking is when an employee close to retirement is given large raises to boost their “final average salary” used to calculate their benefits. Traditional defined-benefit pension systems, such as government workers have in Illinois, are not based on how much an employee and employer pay into the system during the employee’s career, like with a 401(k). Instead, they’re based on a formula for end-of-career salary and years of service. https://www.illinoispolicy.org/how-to-get-more-than-your-fair-share-from-an-illinois-pension/ THE… Read more »
Retired Illinois Educators Taking Home Millions in Pensions
https://news.wttw.com/2017/12/21/retired-illinois-educators-taking-home-millions-pensions
I always love when people link articles instead of addressing the issue in their own words. It lets everyone know they have no idea what they are talking about and only know how to regurgitate talking points. Thanks for clarifying your knowledge. Pension double dipping has zero opportunity costs. Nothing you posted refutes that. If you hired a completely different worker they would also be eligible for a pension. It’s a great thing for the jealous to complain about but it doesn’t cause any of the problems that you believe. The article you point to pension spiking shows that Illinois… Read more »
Correction-Pension spikes continue unabated.
There are some penalties associated with spiking over 6% but who pays the penalty. Not the recipient but the district. I am not sure what the penalty is but it is not much. A while back I was talking to my state rep about the spiking penalties and he asked me if the penalty should be increased and I said if it is the taxpayer will end up paying more and the along came Covid and nothing happened except lockdowns. And where does the majority of tax dollars come from? Taxpayers!
https://www.thecentersquare.com/illinois/article_b899de84-a53e-11ec-b683-6bf4098dc466.html
You clearly don’t know what unabated means. Before the changes it was a standard incentive that as teachers approached retirement they received salary increases in the 20% range for the last few years. This has been reduced to a maximum of 6% and if they go over the local authority who authorized the larger increase is responsible for the cost. Pension spiking has not continued unabated and has reduced dramatically. I’ve even directed you to the Rockford teaching contract that shows this is not happening but yet here you are with an old tired talking point without any facts. “I… Read more »
Right away attacking without constructive criticism. That’s par for the course. My state rep did not know what the penalty is but HE said it was not much so how am I supposed to know the exact percentage? If someone has a 3% yearly raise in their contract they are still entitled to 6% spiking increase. no problem there but over that there is that penalty. Do you know the penalty amount? You seem to know everything. Sometimes I think I’m talking to Carl. No matter what anyone says they are wrong. I try to be civil in comments but… Read more »
“HE said it was not much so how am I supposed to know the exact percentage?” Try researching instead of just floating ignorant thoughts. “If someone has a 3% yearly raise in their contract they are still entitled to 6% spiking increase. no problem there but over that there is that penalty.” No they are not entitled to a 3% raise if it’s not in their contract. Some contracts have it built in when you declare retirement you then go off the main contract and in a separate category with the 6% increase. Either way it’s still in the contract.… Read more »
What do you mean by “public employee pension millionaires”? If you mean “public employees who could potentially collect $1 million or more in aggregate pension payments during the 20-30 years they might live after retirement,” that’s an awfully broad and ultimately meaningless definition of a “millionaire”. If collecting a grand total of $1 million in income over your lifetime counts as being a millionaire, then just about everyone who has even a minimum wage job during their adult life would qualify. By that definition, you could hold a $25,000 a year job (barely above poverty level) for 40 years with… Read more »
You’re swimming against the tide here. Giddyap is not the only commenter who uses that term in the very loose way you’ve described. When I was a kid some 65 years ago anyone who was a millionaire was thought in the way you and others of that time described it as unbelievably wealthy. Today you’d likely need somewhere around $15-20M to have that kind of immediate purchasing power. A LOT of people have a net worth of $1M today, but likely none lives with thinking he’s got a huge fortune at his immediate disposal. Nope, that 70 cent deluxe burger… Read more »
Which raises the question of at what benefit amount, and for what length of time, someone could draw Social Security and become a “Social Security millionaire” by this definition. I’m guessing it’s possible if someone maxes out their benefits and lives to be 95 or 100 years old.
Just answered my own question…. the maximum possible SS benefit for someone who retires at age 70 this year is $4,555 per month, or $54,660 per year. They would only have to live 18.2 years after retirement (to age 88) to collect $1 million, and that’s not counting future COLAs.
Yeah, those ridiculously rich highest-possiblel SS recipients are SO rich! Well, not in America. Maybe if they pick the right country in central America, but they won’t be called “rich” in America. “Pension millionaires” are not millionaires in any real sense of what the buying power of that term would suggest.
You’ve cited a good example of the utimate stupidity of the “pension millionaires” topic of the moment here. Apparently a lot of people who likely have no real net-worth wealth of notable significance sill are “millionaires” these days when you choose to define that term as anyone who has a million dollars passing through their hands over their entire lifespan. Not all that many of such people will feel rich at all in reality. The general rise of the cost of living severely diminshes the luster of the term over many decades of the average American’s lifespan.
Just let the pensions run out of money. Then the courts and lawyers will sort it out. This is the best way for everyone.
THat’s what I think. Let the system work as it was designed.
No pension fund, no problem. Pensioners can just be paid out of the general fund instead. The courts showed us during the rauner budget standoff that they will step in if the GA won’t do their job. Pensioners (and bondholders) will be paid first.
What’s the current annual pension payout? About $15 billion? The state brings in over $50 billion per year. Plenty of money for pensions and bondholders. You want other services? Well taxes will need to rise.