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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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This would be similar to what Indiana has done. All counties have a local income tax with some under 1% and most around 1-1.5% and one around 3%. This was done in EXCHANGE for lowering the state income tax now at 3.23% and capping residential property tax at 1% of value and rentals/commercial at 2% max. This and personal property tax should be explored. Illinois eliminated personal property tax in 1979 except for corporate. Seems like everything went downhill from 1979 and on. Knowing Illinois this would be in ADDITION to not in EXCHANGE for. Any increases to the county… Read more »
The reason progs are in love with a city income tax is because they think they can bilk all the suburbanites who work in the city. But most local taxing jurisdictions charge nonresidents a lower rate, if anything. NYC charges nonresidents nothing. Imagine the uproar from all the unions if only Chicago residents were subject to a city income tax. They’ll be pissed if their rate is higher a fraction of a percent.
New York City has had an income tax for at least the last 45 years – the current rates start out at around 3% and get up pretty fast to around 3.9% (for a married couple with an income of just $90,000). I believe the rates were even higher in the past, and yet the city has prospered in almost every imaginable way, with steeply escalating housing prices and population over the past several decades. If Chicago had similar rates, I infer from the article that it could raise well over $2 billion in additional revenue annually and likely entirely… Read more »
Baltimore also has a city income tax. They too have prospered in almost every imaginable way, if rampant crime and race wars count as prosperity.
Is this the one-size-fits-all reasoning you used in your classroom? Maybe free college isn’t a bad idea after all. Or refunds.
yep lets just tax our way to prosperity!
“Even if a deal could be reached for an amendment to the state constitution to ease the city’s huge pension burden, the impact would be modest. We’d still owe billions we don’t have.” Any meaningful amendment would significantly reduce pensions and health care benefits, causing a significant reduction in the debt. I agree that the kind of amendment he’s talking about (“… reduce the annual 3% compounded cost-of-living benefit increase …”) wouldn’t reduce the debt by much. Finally, he said he interviewed experts. I guess he forgot to interview the many experts who agree that draconian pension and health care… Read more »
The effects of the amendment obviously would only be”modest” it were drafted that way. They would be huge if drafted a different way. The article is simply dishonest — a shameless repetition of union talking points.
In my previous comments, I blamed the IL pols and public unions for the financial mess that IL is in. It’s clear to me now that the media is a big part of the problem, too, by under-reporting, misreporting, or not reporting what’s really going on. Thanks for driving that point home, Mark. The result of this media deficiency is that many IL residents, some of whom are intelligent people I know, are unaware of what the real problems are and of the magnitude of those problems. For the people who benefit at the expense of the IL taxpayer, the… Read more »