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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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Giant red flag in CTBA plan: “The second element of reamortization is to move from a target of a 90 percent funded ratio in FY2045 to a target of between 70 and 80 percent.” In other words, Martire has now given up any pretense on fully funding the pensions. This explains why he didn’t extend the schedule length. https://www.ctbaonline.org/reports/addressing-illinois%E2%80%99-pension-debt-crisis-reamortization Also, funny how the “power of compound interest” is recognized here with increased pension contributions, but when taxes are increased, taxpayers lose the ability to save for their own retirement and realize the very same “power of compound interest” on their… Read more »
Yup. Ralph’s “reamortization” has morphed quite a bit. And note that the flat annual contribution he wants is now $12B. Good luck.
Just a few years ago, Martire suggested a 44 year plan with annual debt payments of $6.9B where all but 10% of the unfunded liability would be paid off by 2057. This is a pretty big pivot, which should call into question any CTBA projections in general. BTW, while the CTBA report states a “target of between 70 and 80 percent,” the final footnote reads: “the five pension systems would be 70 percent funded in FY2045,” as if it’s all but certain. If Martire can’t predict a huge change in his own plan in 5 years, how can he know… Read more »