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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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What about taking more money out of the checks of Teacher/State employees for their pensions?
No can do. Increasing the employee pension contribution would be considered a “diminishment or impairment” unless something of value was given in return.
Actually, the courts have made it crystal clear that these proposals will not work. Even if you managed to amend the Illinois Constitution, a tall order indeed, there is that pesky clause in the Bill of Rights part of the U.S. Constitution, which cannot ever be repealed, barring states from passing ex-post facto legislation and/or violating contracts. If you repeal the Illinois pension protection clause, you may be able to change terms for current employees going forward (although many legal scholars doubt even that), but there is absolutely no way, short of state bankruptcy, that you can change terms for… Read more »
It’s simply not true that the answer is clear cut regarding the contracts clause. I would say the weight of opinion is on your side, but there are no direct rulings on it. It would be decided in Federal court based on Federal law so I don’t know what 7-0 opinions you are referring to. The US Supreme Ct. seems to have left open the possibility of allowing what would otherwise be contract clause violations in the event fundamental services were disrupted, which is what we are headed towards. As I said, all options have to be pursued even if… Read more »
The Supreme Court U.S has “never held ..that the principles embodied in the Fifth Amendment’s Due Process Clause are coextensive with prohibitions existing against state impairments of preexisting contracts.” PBGC v. R. A. Gray & Co.,467 U.S. 717 (1984). Its “cases are clear that legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations.” Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976). Bankruptcy is still the best solution because it avoids the time and expense of arguing who is right and who is wrong about what governments can do to protect its citizens… Read more »
Jeannie is 100% correct…We need to change the constitution that has buried this State in debt.
I would also Cap pensions to $1,000,000 paid only for 10 years at $100,000 for only those that contributed to the pension fund.