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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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Factors that could, individually or collectively, lead to positive rating action/upgrade:Sustained progress toward structural balance and improved liability management, primarily through materially narrowing the wide gap between actual and actuarially determined pension contributions. So if we want to raise our rating further we will need to start paying more towards pensions and stop kicking the can down the road. Pay more now or pay even more later. Factors that could, individually or collectively, lead to negative rating action/downgrade:Reversion to the previous pattern of irresolute and contentious fiscal decision-making, which could include delayed budgets with unsustainable fiscal measures such as deeper… Read more »
The bar has been set so low that putting together balanced budgets (even without actuarial pension payments) puts Illinois in a stronger ratings class. Better than the past governor that didn’t even want to pass a budget.
That’s right. Illinois has a significant resource base that is strong enough to handle our moderate pension burden. The state has a strong tax base and plenty of room to further raise taxes.
Fitch of course bases its ratings upon how well can a State pay its debt back. Illinois has an excellent way to pay the bills too; you are standing on it. Illinois has the power to confiscate via taxes all that it needs to pay the bills. Do you feel better now?
That’s the point RB. The ratings agencies know that Illinois has vast ability to tax and cover the states debts. They don’t buy into the everyone is leaving the state and no one will be left to pay mantra that so many uninformed people try to claim.
Wahoo! We paid off the credit card bill for $1 billion, and the unfunded pension obligations went up by $8 billion. So I guess for Fitch (who by the way gets a six figure plus annual credit maintenance fee from -guess who?) that’s pretty good math. Such a great scam these rating agencies so successfully have maintained for decades. They are complicit in duping the public about the real state of the fiscal problems of Illinois– all for a crummy little annual fee.
At one time I had a lot of credit card debt and a decent credit score, always paid on time which helped. A new job and a few years later I received a BIG bonus that allowed me to pay off all my credit cards. Shortly after my score went up to 820. I still get those big bonuses which pays for kids college, weddings etc. Illinois received their “COVID Bonus” and got some credit upgrades. Unlike me Illinois is not going to keep getting those COVID bonuses. Case in point who’s going to pay for the migrants and their… Read more »
The picture is not all roses, as it’s been stated it’s nothing but accounting gimmicks, shuffle here, shuffle there. There’s not one damn good thing about this shithole state and the communist jelly belly in Springfield.
Ah yes, paying down the bills you owe, what a triumph. Now tell me about those unfunded pension and benefits liabilities again. How many billions are those? Thought so.