-- Connecting the dots between our economy, government and business --
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.
SIGN UP HERE FOR OUR FREE WIREPOINTS DAILY NEWSLETTER
How would you describe public policy that made it more difficult for a worker to provide for his or her family, or for that worker’s children to become educated and gain the skills needed to improve their lot in life? I would call it Illinois response to the pandemic. What if that same policy also made elder abuse and domestic violence more likely to occur, or denied needed supports to individuals with physical disabilities or mental health concerns? Same answer, plus the interest and public pension liabilities gobbling up an increasing share of the state budget. I’d bet you’d suggest… Read more »
Throwing more money at education isn’t the answer, but disenfranchising teachers unions might be a good start.
Martire makes no mention of pensions eating up over 25% of budgets, in some cities, even more. Talk about bad tax policy. Pensions take away from education, social services, and infrastructure.
Blame the politicians who over-promised their union supporters in order to stay in office.
Not true. Read this excerpt from Martire above: “When any government has a long-term structural deficit, it’s forced to borrow increasing amounts of money, to the point of declining creditworthiness, which in fact Illinois has done. Illinois’ inability to come to grips with an ever-increasing pension liability is eating a greater share of the state budget every year.” Oh, he didn’t specifically say 25%, but he does note an ever increasing share of the budget. Martire has been telling the truth about Illinois finances for a very long time, but of course, no one in Springfield listens and groups like… Read more »
A real solution cannot just be the continually raising taxes, and that’s all Martire ever harps about. His approach is that of a simpleton. Always one-sided.
One-sided? Seriously?? And what exactly does Wirepoints, the IPI, etc ad nauseum propose? Cut pensions, even though it’s rather clear that is not possible. Sure, they have pointed to Arizona, for instance, as a way that it could be done, but the situations are not comparable. Rarely does anyone acknowledge that the pension system has already been revised for those hired as of Jan 1, 2011. As the participants of Tier 1 die off, which is inevitable, Tier 2 becomes the new system for all. Time-consuming? Sure. But changing the Constitution and hoping that will solve the problem is not… Read more »
The solution is very individualized: tax payers will leave the state as the bill comes due and communities will crumbled. 2/3rds of the state will look like East St. Louis! Drive around Marion, decatur, joliet, waukegan, you’ll see how crappy the entire state can become! My kid will leave the state for college in the next decade or so and then I’ll be gone! Let someone else pay that bill. Only the losers who are too poor to pay the pensions will stay!
That’s a feature, not a bug. He likes to separate funding the pensions related to education from the operating expenses for education. But both are really one in the same. The only reason we were able to spend as much on the operational side as we did in the past was because we shorted the pensions. The truth is fully funding pensions will always put downward pressure on operating expenses, specifically compensation. Ralph thinks the only solution is raising taxes, but the reality is it probably a combination of lower compensation and higher taxes. But he’s not paid to lower… Read more »
Note to Martire – a progressive tax measure just failed in an election in Illinois overwhelmingly won by Biden. Many Biden voters voted against the measure. The lack of trust in Illinois government and its demonstrated inability to rein in spending and corruption is the problem. Even middle class people could see that if the measure passed they would be next. Martire’s lacks grounding. It is nice to talk about increasing marginal rates, but passing legislation and actually collecting tax revenue is another matter.