We finally have some concrete indication of what Governor-elect Pritzker may do in office.
In an interview given to Crain’s reported Friday, Pritzker said he is “seriously considering” the “reamortization” approach to pensions. That’s the term that bedazzles most reporters into thinking there’s an easy solution to the pension crisis. You’ve probably seen it advocated on television by Ralph Martire of the public union backed Center for Tax and Budget Accountability, a longtime supporter.
In fact, it means little more than taxpayers contributing more to pensions sooner, which would allow pensions to earn more on their investments sooner. Read the critique in Forbes this week by a pension actuary. It tracks the same criticisms we’ve long made. The CTBA plan leaves the state pension systems just 70 percent funded by 2045, instead of 90 percent funded under current law. That means instead of a $32 billion unfunded liability in 2045, CTBA’s plan leaves Illinoisans with a $98 billion shortfall then. Triple the shortfall.
Reamortization is no solution. The actuary says this is the only question that remains: Do Pritzker and the rest of the lot not understand, or are they simply hoping Illinoisans won’t question their explanations?
And there’s a pesky little issue of where the state would get the money to contribute more to pensions sooner. Well, we can just borrow it, say reamortization supporters!
Yes, that’s the second thing Pritzker is seriously considering — a big pension obligation bond. Just like Blago did while governor. Borrow our way out of our debt problem.
Chicago, too, recently floated the idea of its own pension obligation bond. The proposal is on hold after hitting considerable opposition, including ours. Our objections apply at the state level as well. Links to those articles are below.
Pritzker also indicated his first efforts to raise revenue will come from marijuana legalization and gaming. No surprise there.
We want to be fair to Pritzker. We really want to endorse something he’s doing. Honest.
But come on, J.B., give us something to work with. Is there nothing you can propose that would help keep people and businesses from fleeing?
Can you at least throw us a bone?
–Mark Glennon is founder and Executive Editor of Wirepoints.
- Aug. 5 – Rahm Emanuel’s latest can kick: Borrow $10 billion for Chicago pensions
- Aug. 15 – $125,000: The pension debt each Chicago household is really on the hook for
- Aug. 19 – How Emanuel is misleading you on the city’s debt – Crain’s
- Aug. 24 – Pension Obligation Bonds Are Like Big, Fat, Dangerous Margin Loans For Stock
- Aug. 26 – Chicago CFO’s Stupendously Bad Timing On Her Last Pension Obligation Bond
- Aug. 28 – Emanuel’s real motivations for Chicago’s $10 billion pension bond plan
- Aug. 29 – A plan to make “bad pension borrowing” good? Greg Hinz is mighty confused
- Aug. 30 – Liquidation Sale. That’s How To Think About Chicago’s Proposed Pension Bond
- Aug. 31 – Emanuel’s misleading pension bond presentation to Chicago aldermen
- Sep. 6 – Chicago’s Bond As Proposed Would Blow A Golden Opportunity For Reform
- Sep. 10 – A more likely reason Rahm Emanuel dropped out: the Chicago time bomb
- Sep. 14 – Chicago’s pension bond : What an honest press conference with Emanuel might look like
- Oct. 17 –If Emanuel won’t kill his $10 billion pension bond proposal, the markets might