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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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Most of these so-called big ideas involve amending the Illinois Constitution to remove the pension protection clause, and then cutting pension benefits for Tier 1 members of the retirement systems. All I can say, folks, is dream on. Even if you could manage to delete that clause, the Illinois Supreme Court, in paragraphs 59-65 of its 2015 pension reform ruling linked below, states that other more general contract clauses in the state and U.S. Constitutions would still prevent the state from cutting benefits or making any changes to the 3% annual increases for anyone who is already a Tier 1… Read more »
Andrew, not true. A properly worded, broad state constitutional amendment would take care of all Illinois issues, including the state’s contracts clause — it would override the contracts clause as well as the pension protection clause. The remaining challenge under the federal contracts clause would be litigated, but federal law would be applied. What the Illinois Supreme Court said about that federal law matters little. The case would ultimately be appealable to the US Supreme Court to apply that federal law. There, does anybody really think that THIS US Supreme Court would invalidate the pension reforms, even after 3/5 of… Read more »