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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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I have an idea that I think will help the state recover from its idiotic financial problems.
I propose that long about the end of the summer that the Illinois State Legislature takes a copy of the year 1999 state budget and pass it again. Notice that I said budget, everything else remains the same. We will be out of this financial hole twice as fast as the Democrats, Communists and Socialists got us into it.
No, I will not comply as my constitutional rights are being violated. Thank you.
Steve, my reply here isn’t aimed at you in particular so much as thrust of your message. I find it more than a little ironic and inadvertently funny that you and probably a vast majority of the public at large want to pick-and-choose which consitutional rights/responsibilities all who do so want to follow and not follow. Here you trake umbrage of something that violates your sense of personal freedom while ignoring your responsibility to the public welfare at large by making that choice, assuming there is such responsibility. Likewise, when it comes to the IL Constitution’s Pension Clause so many… Read more »
Straw man. Steve T. didn’t exhibit hypocrisy in his comment. Others may have and your perspective could be valid, but in this case, it is not.
Let me try to help you understand the distinction.
The US constitution secures what are deemed God given individual rights and liberties of citizens. Defenses against government overreach. Equal opportunity. Not equal outcomes.
The Illinois pension clause offers the opposite. It protects the government, specifically government workers, from the wishes of citizens. More specifically, unless it’s amended, it enslaves citizens financially to the enrichment of the few. Unless you believe sweetheart deals for AFSCME, the IEA, SEIU, and others are God given rights.
https://www.youtube.com/watch?v=_3mw49mk_x0
Good points, but as I said earlier everyone has reasons for their belief systems. So, in that sense anything in the federal or state constitution is supposed to be obeyed until such time as its changed or deleted.
The US Constitution contains the contracts clause. No state shall pass a law impairing the obligations of contracts. This provision of the constitution is there to prevent government overreach as you mentioned in your post. Prior to the Illinois constitutional amendment prohibiting pension impairment, some courts viewed pensions as a gratuity. These gratuities could simply be adjusted because they may not be considered contracts. Republicans in Illinois thought it was grossly unfair that teachers, firefighters, and police would pay into the pension fund their whole career to only have it taken away from them before they retired. During the 1970… Read more »
Assuming you are right about the history, there a couple additional considerations: 1) Other states have similar pension protection provisions that are not so broadly interpreted so the elected judges of Illinois have had a large role in the way the clause is interpreted. 2) All creditors of the state and municipalities have express or implied contracts that are being impaired when they’re not paid. I believe that “passing a law” has been interpreted to include administrative decisions regarding payment or deferral of obligations. So what is the justification for providing special protection for union or pension contracts? Is it… Read more »
“The true sweetheart deals have taken place while Republicans have been at the helm.” Yes, just as Rauner was at the helm during the last four years too, as people come and go from the governorship….But we do know that one man and one alone is in charge of the legislature. So before you start pointing fingers everywhere, there’s one big elephant in the room, Madigan. And the legislature votes on bills. The govenor only signs or vetoes them. ” It is by definition the will of the people. ” Was it? Was it not the will of the unions?… Read more »
I agree that democrats own this as well. The voters during all that time never demanded that their politicians fund the pensions or change pension calculations for new hires. The voters own this as well.
There ya go. IL citizenry gets the policies it seems to wants if long-standing voting results are a good measure of the public’s desires. Monority opinions be damned.
This isn’t complicated. A pension is a promise to pay. The ability to deliver on the promise depends on whether assets are set aside (preferrably in a trust) to deliver on future obligations. Pensioners generally have enough transparency to determine whether they feel they’ll get screwed by the pension provider based on their ability to pay. If they do get screwed they can seek remedy through the courts, seek employment elsewhere, or simply get screwed. Which brings us to the primary difference between private and public pension providers. Private providers can run out of assets. Public providers believe they’ll never… Read more »
You’re right it’s not complicated. The state entered into a contract with employees to pay them in the form of deferred compensation. The assets in the pension funds have absolutely nothing to do with the states obligation to pay. Private pensions are required to make actuarial contribution while public pensions are not. That is why it is enshrined in the constitution. The sponsors of the amendment thought it would force Illinois legislatures to do the right thing and start funding pensions. They were wrong.
Sounds like the simpler answer was to make public pensions contribute like private pensions. They didn’t do that. Instead they enshrined taxpayer servitude into the Constitution. I wonder why?
“Sounds like the simpler answer was to make public pensions contribute like private pensions. They didn’t do that.”
You’re right. I wish the voters of Illinois would have done that instead. Instead the voters passed a constitutional amendment to guarantee that pensions would be paid. I didn’t vote for it but it has been in the constitution since 1970 for all to see.
It’s called deferred compensation. But the deferred compensation is unreasonable and so unfair that it shocks the conscience. Because they are being paid not to work.
“Because they are being paid not to work.” They are being paid for work already performed. They had a contract that said if they work about 35 years then they would get an average of their last few years salary along with a 3% increase each year. The state was aware of this when they entered the contract with the employee as well as the voters. Now that they have performed their end of the contract you want to take it away from them because it doesn’t adhere to your sense of appropriate compensation. Again the same progressive argument used… Read more »
“They are being paid for work already performed.”
That’s a legal fiction created to justify the lavish pension. I see them not working, yet, they still receive a check, most of them in excess of what they earned when they actually work.
They are being paid not to work.
Just like every other pensioner from any source since the whole concept began.
In theory, pensioners take less pay today compared to the private sector in exchange for a pension in the future. But the reality is that pensioners take more pay today compared to the private sector in exchange for even more money in the future. And the unions support which ever candidate gives them the most money.
chumpchange, I disagree with you on the “need” point based on the fact that court decisions in the ’40s and ’50s had ruled that public pensions were “gratuities” (meaning essentially that they were not enforceable promises). So there was a coordinated “movement” to overrule these court decisions in a way that would be binding. It might have been done legislatively but future legislatures are generally able to change a legislative fix enacted by predecessors. The work-around was to put something in the constitution. Fortunately (or unfortunately) the constitutional language used lacked specificity so the meaning of the constitutional provision had… Read more »
“A pension is a promise to pay.” Is the promise still valid if it was reached by bribery?
The grease always goes to the squeaky wheel. Ever heard of the Koch brothers and the NRA? They and numerous other people, companies and organizations know how and where best to spend money to their advantage. What you complain about here is another example of that concept and all legal if certain rules are met. Unless you and others know how to get that to become illegal I suggest you all get organized and do likewise. Otherwise this shouting in the wind approach so many use here to vent their frustrations isn’t likely to get you to a good result… Read more »
It seems fundamentally unfair, unequal and morally abhorent to anyone with a conscience, to believe that sacrificing our sick children and most vulnerable to give retired pensioners, IIRC a quarter of whom no longer even live in the state, a lavish monthly check with a 3% COLA. That’s why people can pick and choose which ones they like and don’t like. Just because it’s in the constitution doesn’t mean that its morally right.
Is it also unfair to pay bondholders their interest and return of principal? Pensions are a debt just like bonds. Many including myself feel it is morally right to pay your debts. So did the Republicans that sponsored the amendment.
There is no moral obligation to pay debts. There is however a moral obligation to pay for poor and indigent children. Bondholders should be stiffed too along with pensioners. Despite there not being a moral obligation to pay debts, there are still arguments as to who should be paid first and who should be paid last. The bondholders can at least argue that they lent money to the state and it has to be repaid. This is far superior to the pensioners’ argument that in 1970 the state promised to pay exhorbitant sums to former employees – in most cases,… Read more »
That’s why judges rule based on the constitution. One person’s morals don’t always line up with another person’s.
Many progressives use the same logic as yours when it comes to executive pay or wealth accumulation. They believe no one should make or have that much money and it’s unconscionable and unreasonable to allow them to keep this money while kids and poor people are suffering.
I noticed, too, that debtsor seems to have some underlying Democrat leaning in his heart. Since when does a Republican care about the poor? Typically they don’t. Yet, here debtsor uses the problems associated with poor kids to buttress his point of view. Verrrrrrry interesting.
It’s not Democrat or Republican, it’s fairness. It’s not fair that JB and other rich people earn interest on interest in the Cayman Islands, IL state tax free, while I get a 1099 in the mail if I win a few hundred bucks at the casino in IL. If we’re going to play this game, we need to all play the same rules. And the same rules to pensioners don’t apply, when they get these lavish pensions that I need to pay for, when so many of us can barely afford to feed our own families. It’s absurd, unfair, unequal,… Read more »
Didn’t your mother ever tell that life is almost never “fair,” a concept most realize by their mid-30’s at least. One person’s talents, wants, needs, skill sets, and marketability never quite matches another’s. That’s the way life is and has ever been.
State employees’ talents are worth more than anothers? Hahahahahah, oh wait, hahahahah that’s hilarious.
You are clearly responding to someone else since that’s not what I said at all.
Perhaps if people do get to the point their families are starving maybe they will finally go to the polls on election day and vote against the current system.
” They believe no one should make or have that much money and it’s unconscionable and unreasonable to allow them to keep this money while kids and poor people are suffering.” This is true. And the rich make too much – much of that is a function of favorable tax laws, such as carried interest, stock options, 1031 real estate laws, real estate depreciation, S-corp taxation, international tax law ‘schemes’ like the double irish etc. Ask JB about his family’s offshore accounts that avoids the very same ‘progressive’ tax that he asks us all to pay for the pensioners. If… Read more »
I offer no argument whatsoever for those who receive the truly HUGE public employee pensions we’ve all seen in the IL news from time to time. Some are in the $250,000-$500,000 category. I don’t begin to explain how that’s justifiable except to say that, again, the “decision makers” who approved those end-of-career salaries had to agree to all of it. So, its not just the politicians who are corrupt in all of this. They are aided and abetted by corrupt frendships within managerial ranks who want to grease the wheels for friends who are impending retirees. Its all shameful however… Read more »
Good, now that you’ve admitted the $250-$500k category, it’s only a hop, skip and a jump to the $130k retired PE teacher in the south suburbs of Chicago; and just a little bit further for the $80k a year secretary in Springfield.
Sure, and while we’re at it let’s send the hit squads to any public pensioner receiving more than $10,000 a year. I’m sure you’ll agree that’s the most any of them deserve,
$10,000 is reasonable. Anything more than social security is questionable. $100K a year is theft.
Okay, glad you clarified that for me. I had thought the amount I mentioned to be way, way more than you’d accept. But, to play on your earlier reply, if 10K is reasonable, what about 14k? What about 25k? I had thought maybe “The Great Oz” would have some sense of this being a negotiable concept, but being the great thinker you are its all clear now.
The feds pension is 30% of the final salary, social security tops out at roughly $2,700 a month. The $8k, $10, $12k a year pensions is obscene. it’s not realistic to take away all the pensions. Even though I wish we could. But IL’s pensions are obscene compared to other pension systems. Nowhere in Europe pays as much as IL pensions. This is undeniable.
In the Illinois court system are not those Judges in on the pension system as well? I don’t think any Illinois Judge would find that their pension should be cut.
Your argument applies more directly to those who are the decision makers in such arrangements. Employees and retirees are not the decision makers. They simply are one end of the deal here. You can moan and groan about their “bribery” to influence the legislators and congressmen, but until such time as money is not allowed to be a political influence those who have it are going to use it to their advantage as they do in every other avenue in their lives. Create a set of rules where people, unions and other organizations and businesses are not allowed to make… Read more »
Don’t agree at all, you make a false choice. …”constitutions are supposed to be obeyed by all citizens until such time as they are revised, are they not” constitutions are not there to be “obeyed” but rather are there to outline our rights which come from God not government. Government’s role is not to force obeyance but rather to protect and define our rights as defined by such constitution. My simple statement is just that, a simple statement that any limitation upon my choice to travel or not, is my choice and not based on a governor’s edicts that have… Read more »
Illinois corruption has taken place for a long time and will continue until they drain the swamp. Pockets deeper than the Madigons!