-- Connecting the dots between our economy, government and business --
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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We must care for our Sanctuary State guests at all costs. Damn the pension debt, damn the outstanding state debt. We must care for our Sanctuary State guests because they will eventually vote for democrats.
Hmm, perhaps there should be no salary increases until the pension gap is closed. In the private sector when a company gets in trouble they institute a pay freeze. Even Old Joe experienced it a few times in his career. I had to grin and bear it or get another job.
You could try that but workers are under no obligation to work for those wages. They are free to negotiate a pay raise or withhold their labor. My guess is old Joe wasn’t part of a union so he had to take it or leave it.
Unfortunately, we have mentally separated pension payments from today’s full compensation package so much that workers rarely see that connection. They most definitely don’t see it at the school district level where salaries are paid by the school district but retirement is funded primarily by the state.
The govt needs to do a better job explaining the total cost of the full benefits package. Salary, health, and pension are all interconnected and any too large increase in one should have a corresponding negative impact on the other two.
It’s even harder to connect it with tier 2 pensioners. They are not vested to receive benefits until they have been employed for 10 years. Most teachers don’t make it to the 10 year mark so it’s even more challenging to tie the two together. The ones that do stay long enough also lose out on social security benefits that they paid for before and after working as a teacher. Would you factor that in your total compensation figures? You start getting too deep in the weeds and the voters tap out.
Those tier 2 people should be furious but I don’t think they fully understand how it all works. Just another batch of smoke and mirrors from
SpringfieldChicago that they have to live by.Some are starting to figure it out. That’s why you are seeing a push to improve tier 2 pensions.
Like the weeping prophet scolded the Israelites of God’s impending wrath for straying from the word of God, Debtsor scolds the pensioners that their day of reckoning is coming for being greedy. The issue of pensions came up at a pub the other day with some friends. Three of us said the pensions are going to run out. The fourth was a teacher. He said he knows he won’t collect his entire Tier I pension. He doesn’t expect to get much of it and neither did many of his co-workers. They all know cuts are coming, eventually. PPF is literally… Read more »
Wow. 4 dudes sitting around the bar drinking alcohol and speculating on pensions. That’s quite a think tank you’ve got there. I’ll see your 4 dudes and raise you 7 Illinois Supreme Court justices. Somehow I think their opinion matters more than yours and your drinking buddies. I do like how the teacher told you that he doesn’t expect to get his pension. I know several people that will say that kind of stuff to the jealous non-pensioners just to make them feel better. It usually shuts them down and allows the conversation to go in a different direction. Classic.… Read more »
“I’ll see your 4 dudes and raise you 7 Illinois Supreme Court justices. Somehow I think their opinion matters more than yours and your drinking buddies” That’s perfectly said!
How can the judges be fair in their decision about pensions when they all will get pensions when they retire. Judges should be on a 401K or whatever retirement plan. It’s like if you are accused of a crime with a life sentence if convicted like rolling right turn on red LOL and you the defendant are also on the jury plus you moonlight as the judge that day. Of course you as a jury member (jury duty that day also) say Not Guilty and then step up on the bench as judge and say Case Dismissed. This is why… Read more »
LOL, I’d take my drinkin’ buddies any day over the 7 supreme court justices. Because the Supreme court justices’ opinion means nothing to basic math that posits that debts that cannot be repaid, will not be repaid.
The Earth is flat. I don’t care what those pointy-headed scientists say. Their viewpoint simply makes no sense! That’s akin to your take on the topic at hand.
Some years ago our local district figured out a way to allow the teachers to buy additional years so that they could retire early. The Superintendent said, following your post, that by putting the high paid teachers on a pension the State paid the bill and the District could hire fresh out of colleges cheaper teachers. Locally many thought the Super was a genius. Some, and very few like myself, though, “but to the taxpayer the overall burden is higher.” I seriously don’t think the people want to know. To them its all about the new pickleball courts and assorted… Read more »
As long as the state pays for the pensions and local districts pay the current wages you will have this issue. The state capped it raises at 6% years ago to try and prevent this very issue. Anything above 6% is paid by the local taxing authorities. It has helped as many contracts now have stipulations that when putting in for your retirement, the teacher goes off contract with a 6% raise each of the last 3 years to help reduce the likelihood of the local district paying the additional pension cost.
The early retirement options (ERO) offered in the early/mid 2000s were a bad idea because all you did was replace a Tier 1 teacher with another Tier 1 teacher. And now that early retired guy was pulling a pension from an underfunded pension system earlier than expected.
As PPF points out, why would the unions ever agree to a wage freeze? They are guaranteed their pension money if it takes the last dime in the state. So they will always clamor for more money now, with not a worry about the pensions later. That is YOUR problem, you foolish private sector taxpayer. They will have their cake and eat it too, as is their RIGHT per the IL Constitution. If not, they will hold the schools hostage until they get what they want. It’s what the voters want, you see.
They have tenure and they can strike and the parents they serve demand a free baby sitter…that is a lot of power
Free babysitter? How can that be? Masters degrees for all, and the increases that go with it, at taxpayer expense. Babysitting is the best they can do?
Checked the school report cards?
According to the article the problem arises from “larger than expected salary increases.” So do we perhaps have a budget problem whereby budgets paint a rosy picture that actually isn’t so rosy? Next up we will hear more on an imagined “rainy day fund” when the State is horribly in debt because of the underfunded pensions. Seriously Bloomberg, why is it so impossible for your tabloid, yes tabloid, to print the truth?