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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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How can state fix the pension mess when the state doesn’t know what the tab is ?/or things keep getting added? 1.)In other articles martire talks about expanding tier 2 pension benifits beyond ‘safe harbor’ requirements, which i believe you may see put in place in fall hb4098. Or, who knows what changes will cost? 2.) It’s my understanding martwick, who’s largely sponsoring hb4098 ,doesn’t have actuarial figures on what tier 2 pension ‘safe harbor’ fix will cost…it’s to expensive to calculate he claims. I’ll await answers from the ‘grownups in the room’ for us dullard low iq taxpayer/voter ‘thiefs’…..For… Read more »
The question is, are martire, martwick, etc, for a PERMANENT FIX to pension mess for all Illinoisans? Or, just a commitment to SPEND MORE, with ever changing actuarial assumptions and never ending added ‘not to be diminished’ benefits?….my guess is the later
Pensions are contract rights. What’s the value of a pension: One source says “the value of a pension = annual pension amount divided by a reasonable rate of return multiplied by a percentage probability the pension will be paid until death as promised. OR pensions are property rights. Constitutions require that governments may not take property without “just compensation.” Just compensation is generally fair market value which is what the U.S. Supreme Court has defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy… Read more »
Of course you would like to see some alternate views of reality. The idea of paying the debt means more taxes and you don’t want that. Reality is too painful to admit for many of you. “Municipalities are permitted by federal law to file for bankruptcy but Illinois politicians have made that temporarily unavailable” No need to allow bankruptcy. We just witnessed Harvey Illinois stiff bondholders for the last 5 years while pensioners were and are still being paid. Harvey massively cut their number of police and firefighters and pensioners are still being paid. Puerto Rico’s pension funds were completely… Read more »
Illinois pensions have constitutional protection and have been upheld by the Illinois Supreme Court. We can blame the politicians but they are elected by the people who vote for them or have by not voting against them. Keeping that in mind those pensions are a first mortgage on every piece of real estate in Illinois which is something to think about when buying or owning real property in Illinois. People have scoffed at me when I have tried to explain this in typical Illinois denial. Often these people will pull the bankruptcy card out letting me know they have no… Read more »
Kass’ column today talks about Steve Landek, mayor of Bridgeview, IL state senator, confidant of Madigan, now appointed to Pritzker’s Finance Board. That sweetens his pension, now triple dipping instead of double dipping. Bridgeview has $200 million general obligation debt, courtesy of Landek and his little used Seat Geek Stadium. Now, don’t know the IL constitution on triple dipping, but it’s not the pensions of the little guys, it’s the politicians and bureaucrats with multiple pensions and pension boosters that add millions to the debt. Name one politician that has only one pension.
PPF is right, taxes will need to increase. One way of cutting the pension obligation is to cut the number of employees. Illinois has almost 7,000 units of government roughly 1,800 more than the next state. Granted it would not be a large reduction in employees to cut some of these units but it would show they are looking at all options, not just raise taxes. This tells people their plan is to never cut the expense side only raise the revenue side and the solution is to leave. Expect higher real estate taxes, higher income taxes, higher sales taxes… Read more »
Cutting employees would save overall money but unless that savings was directed towards the pension funds, pension funding levels wouldn’t improve and could actually get worse. Remember that the most likely employee to be cut would be the one with the least seniority. You know the ones with the lower salaries as well as being tier 2 pension members. Tier 2 people are contributing more towards pensions than they receive in benefits.
Back in the day Chicago automated it’s city elevator’s yet retained the services of the elevator operators. mayor Daley reckoned that automated systems can not vote but elevator operators did. With that in mind you can understand why Illinois will not cut jobs. The basically patronage hires are needed for votes and campaign work thus are too important to let go. The only answer, as you observed, is tax and fee hikes for the good people of Illinois
Here in my little liberal downstate burg our municipal pensions were in “relatively” decent shape. A new Mayor saw to it we had quite an impressive new Public Safety building built along with a new park with multiple pickleball fields built. Meanwhile the pension funding dropped but bringing that subject up gets one labeled an “old grouch” that doesn’t appreciate the good things in life. That’s the Illinois team line obviously; spend on feel goodies and the pension problems are someone else’s problems. Life in Illinois is so unique and why pay your bills when you can force others to… Read more »
For those who care about facts, here’s some data. Since 1995, Illinois’ unfunded liability grew by $122 billion. But only 4% of that growth was due to benefits. The real culprit that’s driven most of that growth — over 42% of it in fact — is the notorious “Pension Ramp” enacted in 1995. Illinois leaders and its voters decided to pay less than the actuarial amount and now Illinois must pay more now. As I continually state, pay more now or pay even more later. The massive debt is a direct result of not paying your bills on time. Complain… Read more »
And here I was going to suggest that each year an increasingly higher payment could be made to make up the shortfall…sort of like a ramping up of payments. Phooey on you for destroying my great idea.
LOL!!!!
Your idea is solid unfortunately it doesn’t align with the typical magical budgeting techniques that our leaders provide and voters support. Instead of just increasing payments each year you need to first lower our payments for the next 10 years before increasing payments and just push out the fully funded date. Voters support leaders that pretend to fix the problem but only make it worse. Your kind doesn’t seem to get elected. lol
The “Voters” are the public sector unions. They have gamed the system to the point where it has the destructive effect of cancer.
Union paid propagandist Martire never misses a chance to justify a union robbery of the taxpayers
Consider da Dems pols in Illinois and Sheeetcago and their masters da public sector unions like a Black Hole.
How do you stop da Black Hole from sucking in more and more of your wealth via higher and higher taxes.
Get as far away as you can from it.
Illinoisans, vote with your feet and flee da Illinois Black Hole!!
I can’t run at the speed of light!
Good analysis of the problem, Ralph. Don’t see you provide any solutions and I’m sure you’re against amending the constitution. Otherwise, only answer is raising taxes, causing more residents and businesses to leave, putting a bigger burden on those who stay.
You can count on raising taxes to be the solution to every problem Ralph writes about.
The only solution is to pay what is owed. You can cut other spending or raise more taxes. Problem solved.
If the public pension millionaires had paid thire fare share problem solved…how much do they pay into S&S…0.
Public pensioners never missed a payment. Not once. They paid their fair share the entire time and the amount was agreed upon by the state.
They don’t pay into SS because they are not eligible. Although if tier 2 benefits aren’t raised you may get your wish.
Facts matter Gary.