Illinois Lawmakers Thumb Noses at Constitution to Impose New Taxes – Wirepoints
June 9, 2026
10 Comments
A mess of uncertainty and litigation is sure to follow.
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With $162 billion more from taxpayers, couldn’t you deliver a few bond upgrades, too
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“Starting in 1990, state law guaranteed most retirees 3 percent compounding increases to their benefits after retirement, regardless of the level of inflation present in the economy.” There’s the first half of an example of the double standard that exists in Illinois pensions. Existing workers and retirees received that legislative pension benefit hike, not just new employees. Contrast that with any pension reform, which the courts have said only applies to future employees. Enhancements are for ex, current, and future employees. Diminishments are only for future employees. Also this is just one of many examples of how the sky is… Read more »
Here is the TRS COLA hiking history per page 6 of Illinois Pension Scam by Bill Zettler: 1971 – Annual COLA rose from 1.5% to 2% (simple not compound interest). 1978 – Annual COLA rose from 2% to 3% (simple not compound interest). 1990 – Annual COLA rose from 3% simple interest to 3% compound interest). The hike to 3% compound COLA applied to all 5 “state” pension systems (TRS, SERS, SURS, JRS, & GARS) as part of Senate Bill 95 (SB 95) that passed while Democrat Michael Madigan was House Speaker and Democrat Philip J Rock was Senate President,… Read more »
You know what would’ve been smart legislation? If each AAI enhancement had a corresponding rule that stated it only took effect when CPI exceeded the newly enhanced rate but would never fall below the original 1.5% simple rate. Additionally, the compounding effect was activated only when inflation exceeded 5% or something. That would’ve been a far more sensible plan. Too bad our politicians don’t understand nuance.
The politicians understand the nuance of getting elected by charging the legislative pension benefit hike credit card with its never ending amortized payment plan and the resulting union and administrator votes, campaign contributions, and election assistance from the aforementioned politicians. And some politicians publicly rationalized if the unions want to dig themselves into a huge pension payment hole and maybe someday not get 100% of their benefit hiking pension, that’s the union’s problem, since its their pension. Except it’s also a taxpayer problem, because it results in more expensive government services due to pension interest. And the scam is bigger… Read more »
Mike xyz, let me give you a few more things to consider here that you didn’t address and might affect your feelings a bit about what you’ve said. First, if you are at least 50 years of age or more you’re likely to remember that in the 1970’s inflation was raging for a few years in the 1970’s. There was some period of time when it was in the 14-16% range nationally when considered as a nation-wide statistic. I think it was even roughly 18% for a few number of months. You could purchase bank CD’s or even U. S.… Read more »
That general topic does add to the conversation but you did not cite your sources and forgot some pertinent facts. What is the source for the “period of time” that inflation was “in the 14 – 16% range nationally?” Apparently the “period of time” was not annual? For annual inflation, the peak was 13.3% in 1979 according to this site: https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093 And 13.5 in 1980 according to this site: https://www.usinflationcalculator.com/inflation/historical-inflation-rates Close to 14%. Not 15%. Not 16%. But did the legislature only address only hike the COLA, during the period in which COLA was hiked? No. The legislature hiked other… Read more »
Here’s another source for inflation, this from the Federal Reserve Bank of Minneapolis. https://www.minneapolisfed.org/community/financial-and-economic-education/cpi-calculator-information/consumer-price-index-and-inflation-rates-1913 It cites the CPI-U (Consumer Price Index for all Urban Consumers). The average for the 47 year period from 1971 – 2017, is 4.04%. Here are the Social Security COLA increases: https://www.ssa.gov/cola By the way, Social Security uses the CPI-W (Consumer Price Index for Urban Age Earners and Clerical Workers), not CPI-U. https://www.investopedia.com/ask/answers/081715/are-social-security-benefits-adjusted-inflation.asp Any COLA close to inflation is an expensive benefit, Both Illinois government pensions and Social Security are in financial difficulty. One big difference between Social Security and Illinois government pensions, is the Illinois… Read more »
Some abc’s forf Mike xyz: First, let me say that I agree maybe to an 85% level to what you’ve said here and in your more recent posting as well. My posting regarding the IL government’s approval of a 3% AAI for its public employee pensioners comes from my having been well into my adulthoood by the mid-1970’s. For all I know you and many others who post here are in your mid-30’s now and can’t imagine a time when inflation was more than it is now–the 2% range. Well, the inflation this country was experiencing in the mid-1970’s and… Read more »
The union lobbyists who represented the union members while lobbying the Illinois General Assembly for COLA hikes might not have received everything they wanted, but they received some of what they wanted, which was a hiked COLA, as listed above. That occurred not once, but at least three times over a period of 19 years: – 1971: Hiked from 1.5% simple interest to 2.0 simple interest. – 1978: Hiked from 2% simple interest to 3% simple interest. – 1990: Hiked from 3% simple interest to 3% compound interest. That comes from Illinois Pension Scam, and the years seem to be… Read more »
Two comments. First, chart after chart in the article shows that pension payments as a percentage of state revenue have not increased in the past 4 years, and are projected to remain flat through 2045. If the state has been able to make these payments for the past 4 years and it has not collapsed, then why can’t it continue to do so for the next 27 years? This does not exactly present a compelling rationale for stiffing retirees and current state workers. Second, the notion that you can cut the 3% AAI without cutting earned benefits is simply wrong.… Read more »
Federal courts disagree with you about the federal contracts clause. Have a look at MARYLAND STATE TEACHERS ASSOCIATION, INC., et al.v. Harry HUGHES, Governor, https://law.justia.com/cases/federal/district-courts/FSupp/594/1353/1900537/ Knowing that the details won’t be of interest to many, I will nevertheless quote some of the pertinent language below, in the hope it will be of interest to some. The key issue is whether a State in making a lifetime promises surrenders an “essential aspect of its sovereignty.” The sovereignty rule holds that a legislative action at one point in time can not tie the hands of a subsequent legislature to revise what had… Read more »
Well said Andrew. The U.S. Contracts clause and the ex post facto clause protect what has already happened or earned regarding past pensions earned. Period. End of story.
Kindergarten teacher keeps her retirement, not even Kavenaugh would disagree.
As to future pensions:
Tier 2 has already neutered future Illinois employee pensions. Cant beat a dead horse again right?
This opinion piece had a very difficult time understanding or explaining tier 2; Albeit, One small and inaccurate reference was made regarding tier 2.
Such is the intentional effort to obfuscate.
“Intentional effort to obfuscate” is on you, Advocate, precisely. Since I assume you had a con law class, you know full well about the Blaisdell case and why the federal issues associated with an Illinois amendment are open issues, and why it ultimately will be just a fact issue of whether a full emergency and failure of basic government services exist.
Criticized as it is, Blaisdell dealt with a historic circumstance, an accute emergency. Illinois pension underfunding is ongoing and chronic far from the emergency in Blaisdell. Highly distinguishable. A self-created time invested underfunding and certainly not an emergency. A policy decision of raising taxes and/or cutting services is not an emergency. Fiscal inconvenience for sure. Blaisdell needed a historic depression…..a horse your apparently quite anxious to ride. So spur it on cowboy. That is the horse you ride. If sufficient negative economic news is spread about Illinois, economic growth can be affected, and hardship fostered. Ya gotta wait for the… Read more »
How about we issue pension bonds to retirees whose pensions are above the PBGC limit (that is, adjusted for commencement prior to age 65)? That’s the level the private sector gets. Payoff of the bonds would be tied to the bond issuer operating at a surplus. The plus would be that the haircut retiree would be able to leave those bonds to his or her heirs. We might then get the unions on the side of efficient government, perhaps. We could also see whether Blaisdell is limited to its facts. (The federal court in Maryland certainly didn’t think so!) Let’s… Read more »
So, I’m anxious for a depression and intentionally obfuscate. On that police power issue, you might want to read Spiotto’s recent paper at Brookings, which says basically what I said, and you can tell him he is intentionally obfuscating. (I do revere cowboys, however.)
Indeed, a portion of employee contributions was dedicated for AAI, but the original agreement was 0.5% of wages for 1.5% simple interest. The benefit was enhanced to 3% compounded with no corresponding giveback (like increase contribution amount). So I agree each retiree is 100% entitled to the benefit as originally negotiated: 1.5% simple. Enjoy!
And of course this attitude is exactly why so many taxpayers are simply willing to move out of state. Government employees continue to display both arrogance and a I am owed mentality that puts them on par with welfare tarts. The Illinois exodus has only just begun. The masses don’t get it yet, but with each month that passes, more and more of them are likely to end up knowing someone who has fled. Once they get the water is fine over here feedback the exodus rate will increase. And at that point, companies will start to have trouble attracting… Read more »