-- 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.
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“The [state pension] contribution hits $9 billion next year and inches up to $15 billion by 2036 and nearly $20 billion in 2045 under the current 45-year funding schedule to reach a 90% funded ratio.” Both of these figures represent a 3.1% compound annual growth rate from 2019, which is less than the projected growth rate of nominal GDP and the likely growth of Illinois state tax collections if current law remains unchanged. Yes, this assumes the pension funds earn annual returns of around 7% per year, which admittedly is a bit of a stretch since only 70% of their… Read more »
“Impoverishing”. Hmm, let’s say the courts ruled a 5% across the board pension reduction was valid. This would be the equivalent of in-state retirees paying state income taxes, which they currently do not. Are you implying working families paying taxes today are being “impoverished” and that any tax hike further “impoverishes” taxpayers? I like your argument.