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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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BJ The Race Clown will be the disease that kills of what’s left of Chicago
The ship is sinking, and the government employees are drilling holes in the bottom of the ship.
The golden goose is dead, and they are not beating a dead horse.
Surely there ought to be at least one more metaphor you could have used. It really needs one more.
Instead of all the condemnation of city retirees who get pensions does anyone have a sensible solution? When hired for a city job, 40-50 years ago you were entered in the pension system. There was no opting out it was mandatory and still is. Started work before IRA’s, 401 plans, 457 plans and city employees paid nothing into social security or Medicare they had to work secondary jobs to qualify for Medicare and if any Social Security benefits were earned there was an automatic 60% loss of SS benefits due to the Windfall Profits act. Nothing else except the pension… Read more »
Your point of view won’t get much, if any, sympathy here. You must be a newbie. Get a brewski and a sedative handy for the truly nasty backlash surely coming your way.
I think that taxes will have to go up a great deal more before we get to the point where the challenges associated with adding reduced promised benefits to more taxes become less onerous than an additional tax with no reduced benefits. Won’t be an entire elimination of benefits, as you suggest, but it’s going to be reduced benefits of some nature. Just can’t raise taxes enough as the only way to pay for all – the squeaking wheel becomes too big and loud. To whatever extent that’s not ‘fair’ to retirees, one might point out that it’s the retired… Read more »
Might? That’s the constant drumbeat here!
What outcome do you suggest is more likely than what I predicted?
I think your concept ultimately might well come to pass, although the IL Supreme Court stated in May of 2015 that the state’s cumulative pension debt is rightly paid by society as a whole rather than obligating pensioners solely. The first clause is my take on it, but all state public employee pensioners and wannabes must continually ponder how soon “ultimately” will be at the very least. I doubt any such action will even be initiated by Gov. Pritzker and perhaps not until another IL Republican governor is elected.
No Republican Governor in IL in this lifetime
I agree with you that people should stop blaming retirees who worked their whole career to only have people attempt to steal from them. With that said, no one is talking about yanking pensions from existing workers or retirees other than extremists that hate public workers. This is just them venting in frustration and jealousy. The reality for city retirees is that a bankruptcy or some type of bailout (or combination) is possible sometime in the future. Currently the state prevents that from happening but eventually the political will may exist in the future. With that said, Detroit pensioners took… Read more »
“…the state has great ability to continue to raise taxes and no such avenue exists for state pensions.”
‘Not an unconstrained one’ in response to your first assertion, and ‘Not yet’ in response to your second.
PPF it is the taxpayers fault they pay some of the highest taxes in the country and they get very little for it. But none the less it is their fault for the huge overly generous pension payments that have caused this issue.
The state’s taxpayers at large are required to pay whatever obligations the state of IL has other than those which have other specific funding sources. That’s the way she rolls. Get used to it or move elsewhere.
Hundreds of thousands of take you good advice every year.
See how that works out for your pension funding program.
Que sera sera! No one should live where they are unhappy. Take my advice and move. I’ll survive.
That is what they said to Ken Griffen, now the richest man in Florida.
Illinois lost hundreds of millions of dollars in tax revenue for many years to come. Not that the pension fund needs it, it will be broke soon enough.
Detroit city pensioners were blessed that Obama was in office at the time. President DeSantis will be less “helpful” regarding Chicago public employees.
That’s a huge IF.
Let me tell you something, most retirees are not making $100K per year. Pensions are based on years of service and a formula of best salary over a best of 10 yr computation. Salaries go up and the benefits rise so current retirees receive a higher benefit than those retirees from 10-20 years ago. No compounded COLA for city retirees, straight 3% of the original pension payment and that’s it. The COLA is the same amount forever and with inflation barely keeps pace. Most city retireee are getting by and are not Punts Gorda millionaires.
I agree with you Zephyr regarding most retirees not receiving 100k per year. The last I saw for a career city of Chicago employee is 65k per year. I only used that number because it’s easier to illustrate the changes with the 3% annual increases. Some city pensions do get it compounded annually and others don’t. My ultimate point is that pensions aren’t going anywhere. Detroit in much worse shape than Chicago and it saw about a 5% cut. They may be cut but they won’t disappear.
40-50 years ago Is it wise for any entity to enter into 40/50/70 year contracts that cannot be altered downward from the moment of hire? Literally, Day 2 of work and we can’t change a damn thing. city employees paid nothing into social security Which means their gross salaries were 6.2% higher because the city didn’t have to pay into social security and the net pay was 6.2% higher because the city employee didn’t have to pay into social security. 12.4% of your salary to invest any way you want, almost any of which would have a better payout that… Read more »
And don’t forget, many teachers did not pay much into the pension fund at all because of the “pension pickup”. Guaranteed pension, almost entirely funded by taxpayers, that is far better than Social Security.
So why hasn’t your union and your Democrats fixed it?
Unions don`t give a DAM about retirees only DUES paying members get the UNIONS ATTENTION RETIREES BE DAMED
It’s not their job to fix it it’s ALL the voters and taxpayers job to fix it. As such the voters will be left with higher taxes and eventually drastic cuts in services similar to New York City in the 70’s. They couldn’t have fixed it even if they tried. We know that because they did sue to have their pensions funded and the courts told them they have no right to a set funding level only to receive payment. If you hire a landscaper and then spend your money on lavish vacations and fine dining, don’t blame the landscaper… Read more »
I hire a landscaper. He agrees to mow my lawn, for which he will collect some money now, and defer some to the future. He agrees that I should make regular payments to a designated 3rd party, and he will collect that money in 20 years. I make those payments every year. My landscaper mostly shows up to my house as agreed, but he mows only 20% of my lawn each year. He tells me that I was wrong to expect he would mow the entire lawn, and that it’s my fault he can’t do it. Instead of tending to… Read more »
They sued to demand payment and the courts told them no. Your version of events isn’t true one bit. Maybe that’s why you are so frustrated because you are completely ignorant on the process. “He agrees that I should make regular payments” The teacher never had an agreement that funds would be set aside. No such law exists. You are making things up to fit your version of events. “landscaper mostly shows up to my house as agreed, but he mows only 20% of my lawn each year.” He mowed your lawn every time as required by the contract. You… Read more »
Oh, brother. Pension fund benefits for Chicago and Cook County workers are bonkers, frankly neither affordable to taxpayers nor reasonable.
New mayor is entitled to $1m pension from Chicago Public Schools pension system for four years work – per Wirepoints. By Johnson’s own admission, he apparently didn’t assign homework to his HS students, so had NO homework to correct, or prepare assignments. His work-performance apparently was performative attendance in classroom. And that’s worthy of his calculated future pension?
And shortly he’ll lead Chicago – my question is, where will he lead the city?
Doesn’t look good for my home town.
Well when Detroit’s Brandon Johnson (Coleman Young) checked out, all he ever left us was alone…..
And was continously reelected for 20 years!
Not a snowball chance in Hell. Taxes will have to double every 5 years to come even close to covering the cash flow out. The Chitty will have to go bankrupt or become a ghost town.
No it can’t. Politcians and the public unions have us against the wall, cause those pensions-medical are secured by our homes via unlimited property taxes. But…even the docile “midwest nice” “play by the rules” IL non-public union taxpayers will “act up” once ie property taxes ie double and or home prices continue to decline and or police and fire is cut drastically to pay for public pensions and or refugees, including businesses, outflow continues (and ramps) out of the political catastrophe of IL-Chicago. At that point, given corrupt political and public union intransigence, IL-Chicago will become ungovernable. You reap what… Read more »
15% of Chicago’s registered voters thought the CTU’s plans for Chicago were a great idea, 15% voted for something entirely different, and 70% didn’t care enough about what happens to bother voting.
Chicago is a herd of sheep milling around while a half-dozen wolves argue about what’s for dinner….
Sheep have more intellegence compared to an Illinois voter
No.