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State contributions to pension plans will decline $1.5 billion in fiscal 2018, by far the largest single spending cut in the budget. They did that -- and this is another secret that was buried in the budget -- by delaying lowered discount rate assumptions. A schedule will phase them in. Expect a huge spike in unfunded liabilities.
Kudos to Joe Cahill at Crain's for finding this.
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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