-- 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.
SIGN UP HERE FOR OUR FREE WIREPOINTS DAILY NEWSLETTER
Yep, billions of dollars in federal Covid relief funds, ultimately used pretty much however IL wanted, tends to make IL’s financial picture not quite so gloomy. What will happen now that the federal flow of money has drastically slowed? No need to answer; we all know what will happen: higher taxes and fees atop already ridiculously high taxes and fees.
Buying Illinois bonds is like burning your money in a fireplace.
Illinois cannot survive with its current pension liabilities. Not possible, raise taxes and lose population which actually nets less money. This ship is sinking, only people that will survive are one that have left.
“The state needs to find a way pay down the pension liabilities. Reform doesn’t come easy for the state and the longer they wait the worse the problem will get,” Ciccarone said.The state faces a tough path to any pension or retiree healthcare reforms with limited options beyond pouring more funding into the system because the state constitution bans benefit cuts. Pouring more funding into the system is the only legal “reform”. The fiscally prudent should be demanding that the massive increase in tax revenue should be plowed into the pension funds until we get to an actuarial level. Every… Read more »
Is Mendoza’s HB 5851 bill the answer to your dreams? It will setup triggered payments but not revenue source? and then in a year or two when all the $fed covid stimulus$ is spent and tax revenues return to normal or worse with no more QE, then taxpayer will be forced to swallow a tax increase or make a run for the border (like rabbits)? and you wont suffer
Pensioners will be the last to suffer. So before one cent is cut from pensioners you’ll see more tax increases. Income tax increases, property tax increases, implementing service taxes, eventually a progressive tax and perhaps a real estate transfer tax to get tax revenue one last time from people leaving the state. That’s just the taxes. Along the way you will see a few cuts but before it ever gets to cutting any pensions you’ll see massive cuts in government employees and their pay. Take a look at New York City in the 70’s when it was on the verge… Read more »
Oh, I forgot, eventually the state will be forced to tax retirement income.
Plenty of taxes for the state to collect. Currently political will stops that but eventually it will have no choice.
the Mendoza’s HB 5851 Bill would set up the locked in payment plan (triggers)without the tax funding source? which would be forced to follow? correct? I think Martwick has proposed similar bills
I do not think many understand that situation. Because of that today people in Illinois are spending more money on things they are not entitled to…but try mentioning that to others.
PPF, tell us what taxes you would raise, and in what numbers, that would adequately fund the pensions.
Looks like passing Mendoza’s 5851 bill will be next priority for the machine now that they are 100% in control.—“Mendoza will press in the upcoming regular legislative session for passage of House Bill 5851 that puts in place additional triggers for future automatic deposits in both the pension and budget stabilization funds.”
Public unions pull the puppet strings of our lawmakers, so why not?
How on earth could both pensions and OPEBs have improved so much? Stocks were clobbered that fiscal year, and why would OPEBs improve by $10B? Net result is big improvement in Net Position. Supposedly. We will wait for the full, final audited report to come out then dig in.
Looks like FTX math to me.