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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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I don’t know anything about this guy, Lenoir, Sr. But is he crazy? These losses “don’t have a material impact on the funded status ” of the fund? And they invest to “weather market volatility”? What? You just took huge losses, apparently not hedged in the market, and this is your response? Some people might consider a billion dollars to be “material”. And tell us all when you will recoup your funds losses.
The Democrats are smart. If they fully funded pensions at the amounts required they would need massive tax increase which would result in them being voted out of office. The union also play along and don’t demand full payments into pension funds because that would generate a massive tax increase and a public backlash against the unions. It is however, like a game of musical chairs. When the music eventually stops some people are going to be short a chair or two.
Not to worry, the next few generations of taxpayers will make it up. Pensioners will still get the 3% annual increase. James and PPF will still eat Tomahawk Steaks on a week basis for years to come on the future generations to still be born. Taking from the unborn children is a real neat trick.
The voters decided to borrow from future generations by not paying the costs of these pensions each year. The voters continue to elect leaders that won’t pay actuarial contributions and instead want to short pension funds so their taxes won’t increase. If you don’t want future generations to pay for current expenses then support candidates that will make tough decisions that will probably require increased taxes today instead of tomorrow.
PPF – focus is on Chicago. Their ability to tax is more limited than Springfield. How Chicago raise taxes in an amount sufficient for the pensions to be on a sound actuarial basis? The City and CPS will experience financial pressures the next four or five years (an understatement) even without throwing pensions in the mix. I suspect that the politicians in Springfield will push for a tax on services. That will bring additional revenue in but at the risk of some flight of the professional class. But the size of the problem really can’t be managed. The “quickest” lever… Read more »
I agree with most of what you wrote. My comments were for Leaving (FKA Poor Taxpayer) as he wants to blame teachers, police and fireman for having the audacity to collect their pension. The voters put us into this fiscal mess and not the employees that traded their labor. So I agree that we should “move on” but then people should stop blaming the workers.
Maybe weekly, but not likely weakly
I recently looked at a buddy’s similar sized and valued house in Naperville.
His property taxes are $17,400 per year and going up.
Mine in Littleton, CO are $4,200.
Is the K-12 education in Naperville 4 times better than Littleton?!
Even PPF can figure this one out.
Also, every 4 years I can pay CASH for a NEW $40,000 car.
Glad I voted with my feet over 20 years ago.
You clearly are one high I. Q. individual. Your mother must be so proud.
James, Are your eyes brown?!
We already know that old punch line, and it ceased being funny decades ago when we left elementary school. Try something a hint smarter, or stopping the nonsense altogether would be even better.
Now compare the income taxes paid in Colorado for a retired couple with good pensions, IRA’s and social security. For someone like myself I would pay about 12k in income taxes (before I even start with RMDs) in Colorado while Illinois I pay zero. Everyone’s situation is different. If you have good pensions, strong retirement savings and SS, Illinois has favorable tax treatment on income that can make up or even surpass the additional cost for property taxes. If you were not that successful at planning and saving for retirement it may be a better deal in CO. It sounds… Read more »
PPF, Something else you are neglecting in calculating your net worth or wealth(do I need to define this for your buddy James). Since 2013 my house has doubled in value in CO.
Looks like houses in Illinois have not seen hardly any appreciation over that time.
Could it be the high property taxes and Illinoisians voting with their feet?
What goes up might go down and vice-versa. Such things happen periodically, so it’s never a good ploy to seem smug when you are in an up-market. Your status can change for numerous impersonal reasons such as an ongoing set of poorly designed tariffs, let’s say.
If there is a market on smug, your crew has it cornered.
I think I smell a red herring or maybe a straw, man!
Any pension fund manager who sold the dip should be caned.
Just what we need—a guy with caned do attitude!
Correction of headline.
Taxpayers lost the billions.
“No immediate impact!”. BUT I can see the dented can and it can’t absorb many more kicks.
Maybe it’s time to make public pensions become like private pensions. Require 10 years active participation in union before someone qualifies to collect a pension. No accrual of time in union if not actively working in the union. If someone is collecting a pension, that person can’t work in any capacity- directly or indirectly- for the organization from which they retired. Amount of pension should be in lign with the private sector.