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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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“One fix to increase benefits …” Interesting choice of words, because, for the remaining 99+ percent of us, it’s the opposite of a fix. Are there any fixes for the over-burdened taxpayer?
Reick said the state’s underfunded pensions are so massive, he doesn’t expect it to be solved within his lifetime. Agree. This will not be happening. “We amend the constitution to do away with the pension guarantee, I realize that’s political death for anybody who would support something like that, but frankly speaking, I don’t see any other way out of this.” Definitely not getting a super majority if that’s what they believe. I mean over 60% of the Republicans in the senate voted for Amendment 1 to strengthen public unions. You are living in an absolute fantasy if you think… Read more »
Moving out of state is the only way to get as far away from you as possible.
As the chaos on the streets unfolded, the experienced cops headed for the exit sign and the condos in Florida, not available to teach the new officers the complicated work of policing in a city like Chicago.
IL will never fix the pension system. This is how Democrats buy votes.
Change the Illinois constitution to repeal the pension guarantee.
Yes, I agree. Prohibition was overturned, why is it so difficult to overturn the pension program.
The Prohibition activists were only on a moral crusade. They did not have a compelling financial interest in continuing Prohibition. The anti-Prohibition side had a much stronger financial incentive.
The public employees have an overwhelming financial incentive to not only keep the pension program in place, but to expand it at every opportunity.
Because changing the constitution wouldn’t lower the pension debt. The only thing it would do is remove one layer of pension protection while doing nothing for the contract protection. You would still need to win a court battle that proves no other viable alternatives were available, such as raising taxes or reamortizing the debt. Kind of tough to show no alternatives available when we spend billions on illegal healthcare. Any reduction, if a court ever allowed it, would be minimal and you would still have the majority of the debt. What politician wants to vote for something that could causes… Read more »
How about making all Tier 2 public pensioners pay into SS?
So then they get their Tier 2 pensions and SS.
Seems like a good fix and then they won’t be dependent on the fiscally irresponsible state of Illinois for all of their retirement income.
That would be even more expensive for the state. It amazes me the upvotes you get for something that is an absolute awful idea. Those people vote and have no idea how any of this works. Just sad.
By giving certain government obligations the status of “contract rights” aren’t we denying all other creditors equal protection of the laws? Why can’t creditors with past due payments sue for timely payment and seek interest for late payments? A treasurer who favors some creditors over others (and that treasurer’s employer) should be subject to claims by the “others” for denial of constitutional rights and to censure and removal from office. Cops are being jailed or fired for constitutional transgressions. Writing full pension check from a badly underfunded system is endangering the future pensions of actives who are still working, in… Read more »
“By giving certain government obligations the status of “contract rights” aren’t we denying all other creditors equal protection of the laws?” No. Other creditors also have contract protections. You’re misinformed. “Why can’t creditors with past due payments sue for timely payment and seek interest for late payments? Who said they can’t sue? The State Prompt Payment Act allows them to seek relief. They also get an additional 1% per month late fee paid to them after 60 days. Getting a 12% annual return on your money is pretty fair. A treasurer who favors some creditors over others (and that treasurer’s… Read more »
The Illinois theory of “contract rights” [while bogus] seems to be the feature of Illinois law that provides you with the argument that public pensions must be paid even if it means displacing other appropriate expectations of voters, citizens and taxpayers. And Illinois government, particularly its courts, is currently organized in a way to validate your observation that the courts may not rule in “my” favor. While “things” are now in a certain configuration, that is no basis to presume they’ll always be that way. Many despair the deteriorating finances, public order, transportation etc. of Illinois. Changes (improvements) happen and… Read more »
It’s not Illinois theory of contract rights but rather the United States Constitution. Your whole reply completely ignores my response to your prior statement and basically produced a word salad that can best be summarized as “I know you’re right legally but let’s not follow the law otherwise taxes will be increased”. Good luck with that legal argument.
I point out horrible solutions so that people will accept that the only solution is to pay your debt. Everything else is just burying your head in the sand.
I applaud your recognition that contract rights have bases in both constitutions. However, you should educate yourself on the current status of contract rights in Federal courts (which, in my opinion, are favorable to a challenge of the Illinois regime). You might begin with https://www.law.cornell.edu/constitution-conan/article-1/section-10/clause-1/modern-doctrine-on-state-modifications-to-state-contracts#fn10art1 … … and then progress to https://www.law.cornell.edu/constitution-conan/article-1/section-10/clause-1/contract-clause … … and then re-read the 14th Amendment which cannot be disregarded in impairment of contract cases. I disagree with your imputation that CA knows that PPF is right. Instead, I see you as an advocate who single-mindedly “predicts” what Illinois courts will (or must) do. Right/wrong and/or… Read more »
PPF – I am confused. Trade creditors don’t have the priority that pensioners do in a bankruptcy proceeding, no matter the obligation under the prompt payment act to pay interest. This is a political statement and not a legal one. From a legal perspective pensioners in federal court are exposed to a steep haircut – circumstances and facts will matter a but prior cases indicate as a practical matter this doesn’t appear to be a real possibility. See Stockton CA and Promesa in PR. Stiffing pensioners is no easy task, no matter the formal legal status. The pension debt is… Read more »