-- Connecting the dots between our economy, government and business --
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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Wirepoints has done a good job communicating Chicagoland’s unfunded pension liabilities, including the need for restructuring and perhaps bankruptcy, a topic that needs further discussion. Equally as important, it would be even more eye opening if you discussed Chicagoland’s unfunded non-pension liabilities. They are significant and probably growing faster than the pension debt.
Phil, what do you have in mind there? Bonds or pensioner healthcare?
All of it, but primarily the staggering healthcare liability that seem to be growing faster than the pension liability. I think your readers and the media would be shocked and pick up on it. Got to get past the smoke and mirrors and force some solutions to surface, none are really being proposed at this time.
As you probably know, Illinois state retirees who worked in the system for 20 years or more don’t pay health insurance premiums in retirement. That’s a huge tax burden for Illinois taxpayers. 20 years is less than half a career for most people today. Many people talk about pension reform, but health benefits reform is almost never mentioned, for some reason.