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"The state’s decision to legalize gambling and marijuana helps immediate problems but delays the state’s inevitable financial collapse."
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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Why share articles that we can’t read? Perhaps you can tell me if they are pretty much saying the pensions are doomed in this article.
We know that’s an annoyance but we do post all articles we see that are especially significant, especially in a national source. We try to keep them at a minimum, and most that have pay walls do allow all viewers some limited number of full views per month. We also do try to summarize what it says, but without ripping off big segments.
I understand that Mark. I was just hoping that the Wall Street Journal thinks the pensions are doomed and will be lowered one way or another- the same as you and Ted do.
Mark, I will ask you this: How does a state collapse in this day and age? Wouldn’t there have to be a federal bailout fairly quickly or some sort of federal pension reduction? It isn’t like Iowa and Indiana would just be hopping and skipping along with Illinois in full on collapse for years.
That’s probably the most common question we get. I don’t see how a bailout could ever get through the required Congressional approval. Especially in the Senate, the majority of responsible states would never vote to fork over money to the those like us. I do think federal legislation to authorize a bankruptcy proceeding of some kind is possible, at some point, as they did for Puerto Rico. Probably won’t happen until a Democratic governor comes to DC begging for it. If that’s not us maybe NJ or CN will be first, and CA not far behind.
Mark, I think my larger point is that they will have to do something fairly quickly. You aren’t just going to have one state in total collapse while all the rest are fine. They will have to step in and allow and/or do something about the pensions. Don’t you agree? Thank you for you responses.
Any bailout is likely to involve a haircut (it won’t be 100%) and pension bailouts are likely to be capped at $X per month. The bigger the “claim,” the more the bailout is likely to be so the political-union incentive is to keep increasing the claimed amount. Same motives if bankruptcy is in prospect. States and municipalities “should” not be rewarded for their heedless financial management. Same for the Teamsters. But federal entitlements like Social Security and military and federal pensions aren’t pre-funded in any real sense so those systems are basically using current receipts to pay those already retired.… Read more »
The reality is that the federal government will have to do something once IL pensions go insolvent, or any other state for that matter. It is just a matter of what they choose to do, and the time is drawing near.
Oh, they do. And I can assure you they will be writing on it again, probably often. The key takeaway from this article is just that one line we included: “The state’s decision to legalize gambling and marijuana helps immediate problems but delays the state’s inevitable financial collapse.” Inevitable financial collapse, the nation’s leading paper is saying. Meanwhile, the clowns in Springfield are saying “Illinois is back.”
I would share this article title with Greg Hinz and Rich “paid off by public unions” Miller.
Crain’s has been very good about publishing a variety of viewpoints, including mine once a month. Rich Miller, however, is shameless and hopeless.
Crain’s has been very good, but Greg Hinz hasn’t. Miller is a paid off stooge. People need to stop treating him as anything other than that, from all sides.
Dan – You’d be surprised how many govt agencies besides the state subscribed to Capitolfax at one time or another. Besides numerous counties and munis, here are some oddball Capitolfax subscribers:
College of Lake County
DuPage Forest Preserve
Waukegan Park District
Public trans of Metra and PACE
Pension funds of SURS, CTPF, and MEABF
School districts of El Paso Gridley CUSD #11 and Lake Forest School District 67
Illinois Student Assistance Commission
It’s easy to be shameless among the acolytes in your echo chamber.