-- 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
Peoria is not Camelot. The governor, legislators and judges can’t order delay of rain until after sundown. Nor can they order pensions to be funded or benefits paid from empty coffers. We are beginning to see the contents of Pandora’s box as they spill down the hillside, from the beanstalk, into the world where real people live.
The COP, like near every other small city in IL, needs to be leaned out. Way out. You have people who are basically handymen making six figure salaries. So many municipal employee compensation is WAY above the median for the region. Then add in the pension spiking which has evolved to an art form. Most people get out of the city.
Pension amounts need to be based on the base salary, not a one off year, where the person works every hour of overtime they can. The federal government under the Federal Employee Retirement System (FERS) uses the three highest years of base pay to prevent this from happening. This FERS rule goes all the way back to 1986 or 1987 when FERS was first established. A similar plan in Illinois would go a long way toward curtailing pensions that equal or exceed a person’s base annual pay. Unions of course would scream MURDER!
Govt pensions need to be ended. SS for everyone.
Ths matter as you’ve stated it was written by someone 2-3 days ago as well. I responded to it. My response essentially was that there are pension systems which allow overtime as part of a person’s pension, but those are rare exceptions rather than common. The more common practice by far is either to base it upon the person’s final yearly base income or to average the base wages over the last few years—”few” varying from one pension system to another.
I think Illinois has addressed the pension issue by placing new hires after 2010 in what is known as the “Tier 2” system. I am no expert on it all but as I understand it the system i s a borderline with Social Security compliance meaning, to me, that the benefits are considerably lower than Tier 1 benefits. Interestingly the Tier 2 employees contributions are mixed with the Tier 1’s making many feel that their pension dollars will not last for their retirement days. I am often surprised how many Tier 2 people stay in their union after the Union’s… Read more »
Peoria, home of the Public Pension Fee that was an annual fee to real estate holders that, according to the politicians, was instituted to keep property taxes low, yet was an annual fee on property. What a head scratcher? Well that didn’t work out so now the search is on for a new way to raise money without calling it a property tax. Perhaps they are looking in the wrong places and here is a bit of a tip for them. Peoria has 12 TIF Districts at my last count, perhaps these politicians could look there for the needed funding.… Read more »
I live in Florida and I remember when they started with a Fire Department Protection fee or some such nonsense. It started out as $25.00 per living unit and is now over $300.00. It shows up as part of your tax bill but is not considered a tax, so politicians can say they have not raised your taxes. Politicians give used car salesmen a bad name.
90% funding level? Try paying 90% of your property tax bill, tell the treasurer “That’s good enough” and watch what happens.