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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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If only Ill could restrict pensions to ONLY those who live in ILL. Given the excessive level of the promised pensions and the lack of revenue to pay for them, eventually all but Public Sector workers/retirees would move out of State, and we would reach an equilibrium. Taxes assessed against the workers/retirees would reach a level sufficient to pay for their own overstuffed pensions (AND benefits).
As that commercial says ……. “Voila, problem solved”
If Tier 1 benefits are the problem, freeze all Tier 1 benefits across the board in all state entities. Incentivize school districts to freeze Tier 1 salaries by tying their state funding to any freeze. For example, every $1 in increased Tier 1 compensation results in $5 loss in state funding. Or force the local school district to provide a matching contribution to the retirement system for every $1 raise (or whatever the normal cost would be).
Right that the problem is Tier 1. All unfunded liabilities are for Tier 1 work already performed.
Right, but we’ve still got 25-30 years of Tier 1 benefits to accrue. Those costs should be reigned in ASAP. The only way to control them is via salaries and health benefits.
Yes, thanks for that important addition. It’s inexcusable that we haven’t addressed that.
Issue a “promissory note” to the pensions? I literally laughed out loud. Rich Miller has to be the most obtuse writer that Illinois has among a collection of some real trophies. He is Illinois’ version of Paul Krugman, but only missing the economics degree and the brain (and I don’t think Krugman is all that, either). With ideas like this, why, we could solve ALL of Illinois’ problems overnight! Why didn’t any of the rest of us think of this?! In seriousness, I like where the democrats are going, here. They are playing the smoke and mirrors game (again), essentially… Read more »