By: Mark Glennon*
There’s a lesson here not only about Illinois pensions but about how easily the press will let Gov. J.B. Pritzker thumb his nose at a crisis.
We reported Wednesday that the total unfunded liability for Illinois state and local pensions passed the $500 billion mark. That includes pensioner healthcare liabilities, which are constitutionally guarantied just like pensions. It is based on numbers from Moody’s Investor Services which uses assumptions comparable to those used in the private sector and are less optimistic than those the state uses. Read Wirepoints Special Report: Illinois pension shortfall surpasses $500 billion, average debt burden now $110,000 per household
Greg Hinz at Crain’s asked Gov. J.B. Pritzker’s office for a response.
“Pritzker’s office is pushing back on the notion that he’s done too little,” wrote Hinz. “Steps such as discounted buyouts of some pensions have ‘begun to bend the curve,’ with the percentage of total spending that goes to pension now flattening, a spokeswoman says in an email.”
Nonsense. Pritzker has done nothing significant whatsoever to fix pensions and it is particularly dishonest to cite pension buyouts as an example of progress.
Pritzker has long been boasting about pension buyouts but forever refuses to provide any support or analysis showing that buyouts would have any meaningful effect. We and others have written about it repeatedly.
In 2019 he told The Economic Club of Chicago that some study says buyouts will save “billions and billions,” perhaps $25 billion. But he has never produced that study or anything else to support the claim, and the state’s bond documents said something very different in the debt offering made just prior to that claim. Those documents said just 818 workers and retirees who are eligible for either of the state’s buyout programs had applied for one. That’s less than 2.3%, not 20% as Pritzker told the Economic Club. The documents further said, “The State is unable to quantify the amount or timing of any [reduction in pension liabilities] at this time.” In other words, Pritzker brags about savings to the public but the state says something different when the penalty would be securities fraud.- The Civic Federation published an analysis we wrote about in 2019. Actual results showed savings to the state pensions of just $13 million for the fiscal year that had just ended. For a little perspective, that’s less than two-tenths of one percent of what taxpayers contribute to pensions each year.
- Mary Pat Campbell, a widely read actuary, called Illinois’ buyout program the “shammiest of shamtaculars.” Pension actuary and Forbes columnist Elizabeth Bauer has long ridiculed the program, too.
- Pritzker has consistently refused our requests to produce any document he claims quantifies buyout savings. We gave up on our FOIA request after a fifth requested extension. On Wednesday I emailed another request to his press secretary. No answer so far.
Yet the claim by Pritzker’s office that he is “bending the curve” on pensions through things like buyouts was printed unchallenged in Hinz’s column. Time and time again we see that happen with the press and Pritzker. Rarely are good questions asked. When they are, Pritzker ignores them or dissembles.
In fact, Hinz’s column, ostensibly about our report and our Facebook Live event on the $500 billion milestone, didn’t even focus on that or on the state’s inaction. Instead, it went after Republican challengers to Pritzker. The headline was “GOP rivals rip Pritzker on pensions. Their answer? Well…” And that’s what the article focused on. It was mostly about the comments by candidates looking to challenge Pritzker for governor who didn’t offer specific pensions solutions.
It’s true that they didn’t, but that’s not quite fair because we didn’t ask them to and we gave them little time at our Facebook Live event. Maybe they haven’t gotten specific elsewhere, either; I don’t know. That’s for reporters to ask about and nail them down. Same for Pritzker.
We invited Pritzker but he declined to participate. Also worth noting, we do know that at least one of those challengers favors a constitutional amendment to Illinois’ pension protection clause, which we think is essential. That’s Rep. Darren Bailey, who is a sponsor of a bill calling for that amendment, which Pritzker opposes.
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Five hundred billion dollars in unfunded pension liabilities is perhaps too large a number for some people to comprehend. Here’s a little perspective. If the rest of the country were burdened with the same unfunded pension debt Illinois now has, pro-rated based on population, the total would come to roughly $13 trillion, which is almost half again as big as the entire federal debt.
Nobody in either party should be sloughing off a problem that large, and the press ought to be demanding honest answers. But maybe that’s just us and a few other carnival barkers, as we have been called by Pritzker.
*Mark Glennon is founder of Wirepoints.
Here are some other articles by Wirepoints and others on Illinois’ pension buyouts:
- Sham Buyout Solution For Illinois Pensions Now Being Exposed – Wirepoints
- Pritzker’s Latest Pension Flimflam And Contradictions With Illinois Bond Documents – Wirepoints
- Does Governor Pritzker Truly Want To Solve The Illinois Pension Crisis? – Forbes
- Evidence lacking for Pritzker’s pension buyout claim – BGA
- Illinois Pension Buyout Program Falls over $400 Million Short of Goal – Chief Investment Office
- Illinois banks $400M in savings from pension buyouts it can’t calculate – IL Policy
- Illinois Budget and Pension Buyout: Much Ado About Awful – Stump
- Governor Pritzker, we’re still waiting for the proof you claimed on supposed savings from pension buyouts – Wirepoints
- Stonewalled Again on Savings Claimed from Illinois Pension Buyout Program – Wirepoints
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.
We’re going to Chuck E. Cheese!
And btw,that picture of Pritzker is from when he realized there were two pieces of pizza left !
Pritzkers office says,” bending the curve on pensions” huh?-the only thing bending are the shocks on Pritzkers limo when he climbs in
BuT iT’S nOt aLL dUe ToMOrRoW?!?! So help me if I hear that argument one more time.
There are only two groups of people that scare JB Pritzker: the rating agencies and the municipal bond market investors. Until they rate their municipal debt as junk or the market commands a premium interest rate (As it was before the blue state bail out happened) nothing will change. Nothing.
He is not scared of Republican opponents, voters, judges, union leaders, or anyone else besides the two mentioned above.
Democrats and Republican’s all agree. We need change in Illinois.
There’s only one way.
http://www.newillinoisstate.org
New Illinois, Inc. newillinoisstate.org
I think the opportunity for a new state is lost – People in Central and Southern Illinois wanted this at least 15-20 years ago. But establishment Republicans said ‘Kowtow to Democrats and be more like them, dampen your conservative beliefs – that is our best path to future success’ Little did we realize then that the establishment Republicans were shills. So now we have nearly nothing. It’s over. Your choices: Become a serf and pay tribute, avoid the pagan public schools, and hope the Democrat tyrants leave you alone, or balkanize in a free and prosperous Red State with like… Read more »
Oh well, we can’t get our senators and representatives to even speak up on issues in Illinois. They are all afraid of not getting re-elected.
We have a pandemic of pansies in Illinois. The people are sheep.
They get what they deserve out of this rich guy.
You would think the public employee unions would be demanding a plan at least to close the gap. But they are not. The unspoken, at least publicly, is that only two ‘solutions’ will be considered: Higher taxes, and Federal bailout(s).
Since Pritzker is running for re-election, he should put forward a schedule of planned tax increases, as well as requests for Federal bailouts.
Don’t hold your breath – honesty in campaigning? Nah, I don’t think so!
The last guy to campaign honestly was harassed by the bureaucracy class amplified by a highly biased and irresponsible media. Thanks to the propagandists, he was replaced by a potato.
But no mean tweets, right?
*sigh*
Outrageous that the press and Chicago/Illinois elite are not on the pension/medical constitutional amendment and municipal bankruptcies issues. Illinois too big to fail?….not so with extreme corruption, extreme capture by public unions, and work-from-home. Politicians pushed it too far, with all the load on non-public union tax payers. Will not stand.
This photo of JB was probably taken when he got his assessment reduction approved from ripping out his toilets.
It’s like he is saying take it and shove it I just saved over $300 grand.
That’s a good one Freddy.
We need a real pension reform amendment on the ballot or just request the Fed’s to allow a state bankruptcy and get it over with. First rule to (financial) holes is stop digging, we can’t manage to do that.
What concerns me is the pensioners dependent on IL to continue to keep their word.
Their retired years are built around pension promises made by politicians and their unions. To disrupt folks in their golden years seems beyond the pale.
Yes, the unions and politicians over promised, but those already relying on their pensions shouldn’t be victimized.
Your key phrase is “relying on.” “Used to” is a more accurate phrase. Many retired IL pensioner couples are now used to combined annual pensions of over $200K. Is it unreasonable for the overburdened taxpayer to ask these pensioners to become used to a little less?
200k a year?? I’m not sure where you get your numbers but my husband and I combined do not come close to $100k a year! Our insurance was changed in Obama care. As former state employees who spent 30+ years doing our jobs and having money taken out of our checks that should have been invested and not squandered at every opportunity. When I started state employment I wanted to opt out and invest my own money which is not allowed. The biggest change to pension reform should be that they cannot “borrow” my retirement without my permission and payback… Read more »
It’s quite common for two retired married teachers to pilfer over a combined $200,000 a year from their former employers. My good friend’s father-in-law is a former teacher. I’ve looked up his pension in the public database, and he earns well north of $100k a year (his wife is closer to $100k) and he’s now pilfering more than 50% more per year in retirement than he ever earned actually teaching.
“Reasonable reliance” is often protected under contract law. A lot of hours could be spent (as with the Rittenhouse case) trying to decide what is “reasonable” in the context of self-defense or in the context of pension and health benefit expectations. This issue (reasonableness) should also be judged in the context of what burdens are imposed on others by meeting those expectations. Somebody has to pay those pensions and as far as I can tell, the payments must be extracted from Illinois taxpayers. Maybe Biden will kick in a few bucks to assure votes, but he’s already fairly assured of… Read more »
California points to the future. Public sector retirees flee the state as they retire. I know many of them. What follows is overburdened citizens begin to flee and get charged an exit tax on any property capital gain they managed to accrue before leaving.
I wish I could see a day where pension reform would actually be addressed and implemented. Even if Illinois actually had a governor who would take it on, the Illinois Supreme Court would never let it stand. Why would they impair their own future earnings stream? More likely, they would point the cannon at the taxpayer and the Fed. With the Biden bailout of blue states that happened under the Covid relief bill, the Fed has set the precedent for bailing out these bad actors. Illinois will just wait for another bailout down the road. Until then, they’ll play kick… Read more »
to their minds, the path to reelection. Isn’t that what it’s all about? Securing their future with no thought to the folks who elected them.
Appears so.