-- 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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How to remove your property from the tax roll. – Steve Emerson
The worst kind of political cowardice is to set up automatic tax increases, to avoid justifying those increases to the taxpayers. For example, if Chicago school enrollment is collapsing, there is no need for a giant tax hike that basis.
enrollment is only one factor. If we add more nurses, support staff, reduce classroom size etc… then additional tax revenue would be needed regardless of enrollment.
Our asshat D alderman convinced my parents to vacate Cook for DuPage in the 1990s with similar logic. You have convinced me to vacate this state finally. Thanks, you gave me the push I needed. Another solid tax donkey goes poof. Enjoy those services you laud so much.
I’m glad to hear you are finally doing something about it Locke. It’s too bad you aren’t self motivated to make decisions that best suit you and your family on your own but I’m happy for you never the less. Just imagine how much you could have accomplished in life if you were able to come to your decisions on your own.
See you next Tuesday.
Pulling out a reference from the 7th grade. So clever. How will Illinois get along without your wit?
I’d say more but I don’t want to keep you from all the downvotes you harvest on this site. Illinois needs your sunshine, who am I, a mere peon, to keep you. I am but a lowly tax donkey heading off to the wild west (literally) in my little EV.
Please tell us all more stories how we’ll pay more for less and like it.
Or how we’ll fund pensions for retirees scattered to the four winds, while we enjoy our Sterno reheated cat food.
Oh, and read some Rothbard, that’s where we’ll all end up eventually.
Heading off to the wild west in a little EV? Sounds so primitive. I prefer to stay in 5 star accommodations. Fine wine and prime steaks for me. Although it’s getting rough out there with this inflation. The 3% cola with 9% inflation might force me to cut back to choice steaks every now and then. Hey, we all need to make sacrifices in these tough times.
I really wonder why you insist on making these types of comments.
So you’re confused and wonder why I make comments such as above but you have no issues with someone calling you a CUN Tuesday? You didn’t take any issue with the person that implied 95% of black people don’t have morals just a few moments earlier? Your issue is with me talking about living a good life. That, to you, is more upsetting than the above? That’s weird.
The reason I make those posts is to drive home a point. What I do with my money is my business. Why does it bother you how someone spends their own resources?
I am not bothered by people who actually earn their money and spend it how they please. I spend the money I earned how I please too. But I don’t feel the constant need to make sure you know what I can afford to buy. And actually earning the money is the key factor.
Yet you have no idea how I earn my money but you make assumptions. You have preconceived notion that I didn’t earn my money because I have a different view than you. Who left you in charge of who earned their money and who didn’t?
It’s the exact reason that I leave those types of comments. It’s to get people to come to terms with this very issue that it’s not your money but mine. The only people that it seems to upset are the ones who judge how others earned their funds.
Well then just keep us posted on the thickness of your steaks and the star-rating of your wines and vacations. You can tell yourself that we are all just jealous.
if enrollment is down than adding anything u have described would be STUPID less kids less of what u described pretty SIMPLE except in Chicago
Well then, I suggest Chicago voters start electing mayors that won’t cave to CTU.
Enrollment is a vital factor. Look at the Kansas City school system. It was the recipient of billions via a judge’s order in the 80’s raising taxes on the citizens of Missouri. Unfortunately, despite those billions scores and enrollment continued to decline. An element in the decline was that the school system was a key employer, and paying the teachers more than previously locked many mediocre teachers into the system. But more importantly no amount of money brought about a learning and discipline culture to attract solid students, even with best facilities in the country. Today the Kansas City school… Read more »
Here is some info on the contracts clause from Pew Research (2019). https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2019/05/legal-protections-for-state-pension-and-retiree-health-benefits Yes I agree that the contracts clause is between the state and it’s employees but I don’t see where it is the taxpayers responsibility to fund short falls/misappropriations/mismanagement/diversions of public funds. I’ve said this before that once we get our bills for services for the preceding year that is also a contract between taxpayers and our local taxing bodies and consider it paid in full. Nowhere does it say that this is only a partial payment. If there are shortfalls or underfunding the unions/pensioners should look into… Read more »
I wonder what my salary adjustment (non-performance related) is going to be next year. I most definitely did not get a 5.5% COLA adjustment this year, I can’t imagine my employer giving me a 10% one next year.
Maybe it’s time to test your value on the open market. In inflationary times, the best way to get what you are worth is probably outside your current organization. Companies count on the complacency of their employees to save them money. When they go to replace you they will then need to pay market value which can be more than current staff make.
Inflation causes prices to increase, including government services. Why would anyone think that one area of expenses should stay flat? While this is unpopular, this kind of tax increase is what is needed. That’s the problem though, the unpopular fiscally responsible thing to do is never rewarded by the voters.
If voters want services they need to be willing to pay for them. If they believe they are paying too much then they should elect politicians that are willing to cut services.
That’s the brutal truth of it! Nearly everyone thinks their salary or retirement income should increase, but that their expenses should not. Not gonna happen.
As a former resident of IL and Chicago, my question is always, What am I getting for my tax money? Sure, you talk about paying for services, what services are you getting? In Chicago, education stinks, fewer students but bigger budget, poor results. Crime, fewer cops, fewer convictions, but more crime unreported because people don’t even call cops anymore. Who wants to ride public transportation and get confronted by bangers? Pensions unfunded, getting worse with collapse of stock market. Had dead tree in our parkway, been calling for two years, cut down neighbors tree instead. Sewer by curb floods every… Read more »
“Are you happy with all the “services” you’re getting?” Well, if the residents of Chicago and Illinois are not happy with their services they are free to elect politicians that may offer them something different. Yet people keep electing these same people so it appears that the majority of the people want this. They are also free to move to another location, as you have done, if they believe the other voters in the city or state don’t represent their views. Plenty of options. Of course they could always just go online, complain and then play the victim. That seems… Read more »
What additional services have happened. None. So property tax should stay the same.
Really Doctor? That’s how you think it works? I’ll be sure to tell that to the grocery store clerk or the gas attendant.
Inflation causes prices go up, including services. The taxpayers will need to pay more money for the same services or choose fewer services if they don’t want to pay more. Pretty simple stuff.
The additional services that have happened are ones, the Illinois communist politicians do not tell the taxpayer about like the expenses of being a sanctuary state.
True, but immaterial. All expenses count. Liking them isn’t required.
As Wirepoints has reported, IRS statistics show the billions in AGI that have left IL every year, contrary to Pritzkers claim that IL population is growing. Smart money, like Griffin, is leaving and where is the additional money going to come for all these civic services? Answer, the little guy without many options will get squeezed.
Wally – the little guy is already getting squeezed. Many of Pritzker’s tax increases – taking place after the progressive tax amendment has been rejected – are regressive in nature. Tough times for people on a budget.
Inflation indeed hits everyone. Query whether the perception is that Biden is sufficiently energized to tackle the problem.
One thing that is challenging is that investment performance will be dismal this year, and that will really impact the pensions. This is a reality statement and not a political one, but markets like the current one show just how fiscally responsible and conservative governments should be in terms of sufficiently and timely collecting revenue to pay defined benefit obligations. Investment performance alone is going to put pressure on property taxes.
Defined benefit plans are inherently fiscally irresponsible. They were plausible back when people worked for 50 years, followed by around 5 years of retirement. At the current 30 years of work followed by 20+ years in retirement, these plans are impossible to sustain.
It all relies on a logically solid plan usually to be destroyed by an oversight committee and the politics of it. Now please elucidate. Are you really Joe Blowhard or an actuary? Oh, don’t bother answering. Just let me guess.
Not an actuary, I am a CPA.
Okay, and I therefore apologize for my snarky comment. Then, surely you know that plans made years ago and set in stone didn’t think about needing alterations to account for today’s much longer average life spans, a huge error in itself. Then, add in allowing early retirement options, and you have a problem deluxe in keeping it funded in the actuarial sense, the current nightmare for IL public pension systems. The political storms are a-brewin’ to meet the obligations I’ve mentioned as presumably you know.
In reality, as PPF points out, the “defined benefit plans” are a blank check on taxpayers to transfer wealth to the public union sector. Wealth redistribution laundered through a “retirement plan”. I’m afraid I will always think that is wrong, no matter how many arguments are offered to the contrary.
correction: 20 years working 30+ years retirement.
Teachers vest to ~$70k/annual entitlements at age 55-58 after 20 years working (remember those pension spiking entitlements? converting sick days to years worked?).
age 55 retirement, age 85 projected lifespan for those with palladium-class health insurance, as teachers get free from local taxpayers (OPEBs).
Health insurance is only free to former state employees to my recollection. Retired public TRS IL teachers have health insurance partially subsidized by the state. Retired CTU teachers also have partially subsidized health insurance.
Because everyone who doesn’t work for the government has had their wages stall for the last 20 years. Not everyone can have a pension that the rest of us can’t afford
Simply not true. Median household income in the US has increased from 55k in 2010 to 67k in 2020. If your wages have stalled for the last 20 years I would look in the mirror. Inflation causes prices for goods and services to go up.
I don’t think the plan to index property taxes to CPI is a bad idea, but not capping it is extremely stupid. This is what happens when you draft legislation during low inflationary times: assume inflation will always be 2-3% so no biggie.
Lightfoot doesn’t need to request the entire amount that she would be allowed to under this system. She also needs to live with the political fall out by any increase. She just has the ability to get more income without anyone needing to make the tough vote.