By: Ted Dabrowski and John Klingner
Illinoisans who thought new House Speaker Chris Welch might change the direction Illinois is headed in just got a dose of reality. Welch recently said he wants Illinois to have a second go at a progressive tax scheme, this time committing the tax hike proceeds to pensions. Illinoisans rejected Gov. Pritzker’s first attempt, he said, because they didn’t know where the tax hike dollars would go. “…folks don’t trust us,” Welch said.
Welch is right about the trust factor, but he’s wrong to think Illinoisans will suddenly approve a tax hike just because the legislature promises to funnel the new revenues to pensions. They know it’s unlikely politicians will keep their promise. And Illinoisans know the state’s unreformed pensions are a corrupted mess – that they’d be throwing good money after bad.
First, Illinoisans don’t trust their politicians. It’s why they rejected the progressive tax in the first place. And Welch’s promised ethics reforms – if they even happen – won’t be enough to repair the legislature’s reputation after decades of broken promises, mismanagement and outright corruption.
Second, there’s Welch’s promise to spend the money on government-worker pensions. If he thinks a promise to pour more money into retirements is a winning argument to Illinoisans, he’s badly mistaken.
It’s ironic that about the time Welch was making his comments, the size of Mike Madigan’s retirement benefit was being reported. The former speaker’s pension will start at $85,000 but will jump to $149,000 the following year due to a special provision for lawmakers over 55 years of age and with more than 20 years of service – a provision Madigan helped pass.
That small anecdote captures how Illinois pensions work. Illinois pols have for decades added one perk or benefit after another to pensions, slowly growing the already-generous retirements of state workers. Government workers scratch the backs of politicians, and politicians pad worker incomes. (See the appendix for a partial history of pension benefits granted to Illinois teachers.)
Gov. Jim Thompson added compounding to Illinois’ already high 3 percent cost-of-living adjustments (COLAs) in 1989. Gov. Jim Edgar sweetened Illinois’ pension formula even more in 1998, to create what he called “the most significant increase in pension benefits for state workers in a quarter century.”
And more recently, Gov. J.B. Pritzker brought back 6 percent end-of-career salary spiking for teachers just a few years after those spikes had been cut in half.
Add to that unused sick leave that can be used for as much as two years of service credit. Double-dipping that lets retired superintendents work part-time at other districts. Pension pick-ups where teachers contribute little to nothing toward their own retirement benefits. Retiree health insurance that comes free with 20 years of service. The list goes on.
Illinois government workers are now recipients of some of the nation’s most generous retirement benefits. (Read our full report on Illinois’ overgenerous benefits here.)
The full value of those benefits is captured in the average pensions of recently-retired career workers, those with 30-plus years (half of all retired teachers, for example, have more than 30 years of service).
Career teachers are retiring in their 50s with pensions just shy of $80,000. They’ll get automatic, 3% compounded COLAs and end up with an average of $2.6 million in lifetime pension benefits.
It’s similar for state university workers, who are also retiring in their 50s with starting pensions over $70,000.
State employees start with lower pensions, but that’s because the overwhelming majority participate in Social Security. Nevertheless, they, too, are retiring in their 50s with starting pensions nearing $55,000.
Those growing benefits have long been unaffordable for the ordinary Illinoisans who are forced to pay them. And as we’ve long pointed out, Illinois’ problem has always been one of overpromising, not underfunding.
Welch’s proposal suggests he doesn’t understand how much of an extreme outlier Illinois really is. No state has more pension debt, has a lower credit rating, or is losing more people than Illinois. Those realities require structural reforms, not more tax hikes.
The new boss is proposing the same failed ideas of the past 50 years. Expect people to oppose a progressive tax just as much as they did the first time.
Read more about Illinois pensions and the progressive tax:
- Illinois Pensions – Overpromised & Overgenerous
- Want to Fix Illinois Teacher Shortage? End the Tier 2 Pension Rip-Off
- Illinois’ progressive tax amendment fails
- 20 facts every Illinoisan should know about the progressive tax amendment
- Wirepoints’ Pension Solutions page
Appendix
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Let’s see, how can I alienate IL taxpayers within days of my taking office? I got it. I’ll propose something that will result in raising taxes to pay for pensions. For an IL pol, doing something this stupid isn’t surprising, unfortunately. Can these pols get any more abusive? Is it possible to have someone in that job who’s worse for the IL residents than Madigan?
Welsh doesn’t answer to the voters!
Madigan and Welch…two bumps on the same log.
I prefer to think of them as road blocks on the street to honesty and good government
Speaker Welch mustn’t realize that Illinoisans who don’t trust him and others in Springfield recognize that money is fungible and the progressive income tax proceeds that would be dedicated to pensions would free up other tax dollars to be squandered elsewhere.
Mr. Speaker, please tell me and all Wirepoints readers why any of us should trust you and the party that has ruined Illinois and Chicago. Take all the time you need.
Well if he keeps getting elected he has 10 years term limits, lol
No one trusts you because you have proven yourselves as crooks and liars ! That’s whyb
Pension benefit summaries that show total direct employee contributions should also show the interest earned on those contributions. They are entitled to earn interest on their retirement contributions like us 401k schlubs.
Nixit, you are correct. We typically do add those in on an assumed basis, though in this case we put in the precise number. We’ll amend to give them credit.
Thanks, Ted. I always say let the math do the talking. Even when you include decades of accrued interest, pensions are still an expensive proposition. The tricky part with including accrued interest is that pension contributions still accrue interest even after retirement. I have a pension spreadsheet (of course) that tracks accrued interest for both employer and employee contributions both before and after retirement. Here’s an example for a teacher starting in 1980: Starting Salary = $12,000 Avg Yearly Raise = 6% Years of service = 36 Assumed Interest Rate = 8% Employer Contribution = 9% Initial Pension = $63,500… Read more »
It’s a hard no for me! I will not vote to fund pensions that are obnoxiously over-the-top and can never be kept up with. Aside from that, YOU REPRESENTATIVES FOR ILLINOIS have already shown your true colors, you NEVER KEEP YOUR WORD!
Gee One Crook out and just another one comes in, And they wonder why NO ONE trust them? REALLY?? Now you want to pass a DUMB ASS TAX to pay for all Your Crooks to RETIRE?? AGAIN? Send them to JAIL! And don’t even think of trying to have us HARD WORKING people pay for Pensions that give them 100% more than their Salaries!! No Way!
Poor chris welch,no chris,we really do trust you and the other Illinois politicians and the public sector unions,no really,we really really do trust you,for real we really do chris,no,seriously we really do!!
Oh we trust them alright…
To do us wrong…!
Amen!!
I see our political overlords are still blaming taxpayers for their spending addiction and the high cost of vote buying that keeps them in office and their cronies in gravy.
Get ready for the new assault on cheapskate taxpayers called: “No It’s The Really Fair Tax This Time, Honest!”
They just don’t seem to know there isn’t enough perfume on earth to make their pig of a tax hike or themselves not stink
We just had an election about this, it lost. So they just want to hit it again? Their only tool seems to be a hammer, and we are the nails.
It will just fail even more miserably than before. People are on to the unsustainable pension scam more and more. If Fatty Pritz raises the flat tax then he is a one termer, so he can’t do that either. They are screwed.
The crew over at Capital Fax – at least many of them anyway – think the progressive tax failed due to poor messaging as opposed to lack of trust. What they don’t comprehend is the track record of Illinois politicians is so poor that messaging was challenging. What was Pritzker going to say? I know with recent tax increases overall debt and pension debt increased each time, but this time its different? Welch is correct in identifying lack of voter trust, even if his statement runs contrary to the sheer economic genius of Oswego Willy, who thinks punishing downstate is… Read more »
“even if his statement runs contrary to the sheer economic genius of Oswego Willy, who thinks punishing downstate is the right thing to do.” So true, he only wants to cut downstate, and he hates the Eastern Bloc too, whatever that is he keeps talking about. So funny like a year ago I told everyone here that Oswego Willy said that *EVERY* Government employee is essential and not one penny should be cut during the pandemic. Someone pointed out to him that librarians could probably be temporarily furloughed. He responded that librarians were no more essential than garbage men, health… Read more »
I’m Fake Rich Miller and I run a biased commenting board called Cap Fax that looks straight out of 1995.Cap Fax is a public union circle jerk, and I’m just the jerk who deletes comments there that don’t agree with me or that go against mathematical reality. My best friend, OzRetard Willy, is the dumbest human in human history, but I let him comment whatever he wants on my shitty site because he is a public union, biased dope, just like 99% of the other commenters there. I know deep down the pensions are doomed, but I don’t want to… Read more »
I deleted some of your language.
But Mark, I am the only one that gets to delete things! I am the King of deletions. I am waiting for Pritzker and the unions to tell me what to say today still……
I bet he would be overwhelmed with comments like yours and others you see here if he weren’t deleting them.
He must must spend half his day deleting comments and blocking people, in constant anxiety over a truthful comment making it through his firewall of public union propaganda and lies of course. That site will be the place to be when the pensions do go insolvent though. It will be fun to watch them squeal!
So you cleaned up his comment but left the word retard? I guess it’s good to know that name calling is part of honest debate.
Honest debate isn’t deleting comments and blocking people all day long like Rich does. Willy spends all day insulting people who don’t agree with him, so have a talk with him about honest debate while you are at it.
Fake and Retarded, I ask both of you, and all other commenters, to drop the name calling. One thing we have learned writing here is it’s just not effective and we have gotten complaints about both of you. Retarded, you should change that name. Lots of other commenters name call, and I have made the mistake, too, but try to avoid it. The only exception is us at Wirepoints. Call us whatever you want because we’ve probably already heard it. And under no circumstances should you use names or adjectives that ascribe some particular, concrete characteristic to somebody that might… Read more »
I have come to the conclusion that Capitol Fax is not a serious site but rather a place to discuss inside baseball over the Democratic Party in Illinois. That is fine for the participants – a coffee klatsch of sorts via a website – but they cannot be taken seriously – especially given their absolute aversion to discussing numbers and math (it gets one censored).
Any site that gets subscriptions through the state budget is corrupt to the core. Whoops! I didn’t mean to say that, I meant to say PUBLIC UNIONS RULE DUDE!!!!!!!!!!!!!!!!!!!!!
At its core, it’s primarily a gossip site that leaks and/or fabricates party narratives on behalf of connected individuals. Hence the heavy reliance on sources leaking narratives coming from closed door meetings and off-the-record conversations.
When not leaking gossip or fabricating narratives, it gives its subscribers a unhealthy dose leftist political opinions. The comment section is the water cooler of low-level insiders flunkies posting their uninformed opinions.
It’s mostly state employees on the clock that comment on Cap Fax. The same old stuff regurgitated daily, with ringmaster Willy, the self proclaimed republican, at the controls. The guy has serious issues. The entire group is in denial and worships at the feet of any democrat. It’s funny when the annual population results are published and they all scream “good riddance” in unison.
gonna laugh my rear end off when public union employees checks bounce,its coming,hope the fake local news shows these over paid slobs in the free cheese line
—***folks don’t trust us,” Welch said.***—
Thats the understatement of the decade…
I trust garage sale sushi in the hot summer sun, more than *any* politician…
The century!
Right!
Want trust, start with amendment to fix the pensions.
Why would we want to help, with our tax dollars, help with the screwed up pension mess that the politicians created?
NOT ME!
Was the tollway not built on the promise that once it was paid for the tolls would end? Was the Lottery not built on the proposal that it would all go to improving education? Was the two taxes on gasoline not supposed to go to fixing the roads, instead of pay raises and benefits for the politicians? Now another Tax by the Black Madigan to pay for Pensions for politicians who may have spent one year in office, but they love to blame it on Police and Fire. Another lie, more corruption, and another day I ask why I am… Read more »
What kind of Jedi mind trick does he plan to use? You don’t trust us, but you trust us? He really is an idiot.
Gee Welch You get it! We don not trust you!
Taxpayers were already taxed to pay government union pensions. Property taxes, income taxes, etc already included funds for pensions.
Oh, please do!
Ask the voters to approve a “just for pensions” tax increase because state employee benefits costs are so high Springfield can’t afford to build, repair, or replace anything, and can’t provide anything but sloth-speed-service to an already overtaxed citizenry.
Go ahead, I dare you…..
The reason why that would not work is similar to the lottery for education hoax. The State currently funds the pensions from other sources. Implementing a new tax directed at pensions would be applied to pensions but the previous other sources would stop funding meaning it would just end up being more money to squander once again by the political hacks of both political parties.
Won’t pass. Won’t happen. The pensions are doomed.
His proposal does not even make sense. Raise taxes just to pay government workers pensions? While we in the private sector do not have pensions, have to save for our own retirement, and have to pay for them as well? And they get to retire 10 to 15 years before us? What about a good part of any tax hike going to improve services? He is not the Illinois Speaker. He is the Illinois government employee speaker. What a clown.
We’re so out of here, the timeline is set to dedicate much of our vacation travel to a real estate hunt.
Grift.
Hell no !