Most of the membership on the Chicago Tribune’s editorial board has turned over recently, but they are sticking with the previous board on the imperative of amending Illinois’ constitutional pension protection clause.
Bravo. They made the case well, too, in their Monday editorial, “Will Illinois Democrats ‘Let the people vote!’ on pension reform?”
Lawmakers continue to ignore “the gazillion-pound gorilla that imperils the economic future of Illinois – this state’s tax climate, jobs availability and population migration,” says the Tribune, “so the gorilla keeps getting bigger.”
The editorial stands out for saying that the officially-reported unfunded liability total for state pensions of $144 billion is “based on hopelessly rosy projections” – a point most media ignore. The total is realistically more like $317 billion, the Tribune said correctly, which is the number calculated by Moody’s Investors Service – plus the unfunded healthcare liabilities that the Tribune remembered, which are an additional $56 billion.
Most importantly, the Tribune is right to ask for some semblance of honest consistency from reform opponents, particularly Gov. JB Pritzker. His battle cry for the constitutional amendment for a progressive tax increase, as the editorial reminded us, was “Let the people vote!”
Dead on. Pritzker and the rest of the Springfield establishment don’t want to hear from voters on pensions because they know they would get annihilated.
The Tribune might have added that Springfield lawmakers recently moved toward foisting a different amendment on the public while ignoring pensions. This spring they authorized an astonishingly irresponsible amendment that would be a monstrous giveaway to public unions. It will be on the ballot for public approval in November 2022. Its scope goes far beyond appearances, as we explained earlier. We will be writing much, much more about that as the vote approaches.
One point on which we might take issue with Tribune’s editorial board is their hope that benefits already earned need not be reformed. It’s important to remember that the unfunded liability is based solely for benefits already earned. Some elements of needed reforms might be considered impairment of earned benefits, such as changes in the automatic 3% annual COLA, raised retirement ages and caps on pensionable salaries. One thing for sure is that the longer reform is delayed the tougher the reforms will need to be, increasingly impacting earned benefits.
The math has long been insurmountable without reform. That debt grows every year because even taxpayer contributions consuming over a quarter of the state budget aren’t enough to keep up with the compounding debt.
Illinois will either fix its pensions or it will continue to be strangled by an already impossible-to-pay pension debt.
Let the people decide which it will be.
-Mark Glennon
For more on the need and legal aspects of a constitutional amendment for pension reform, click the Pension Solutions tab at the top of this page and see our detailed report 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.
As long as the inmates are running the Asylum nothing’s going to change. Why would someone who’s getting a pension vote against getting a pension? They will never allow it. It will never happen. They will taxe us until we’re broke and then they will be broke and then maybe they’ll understand.
And a big round of applause for Wirepoints for pounding on this issue long before the Tribune woke up to it. Maybe someone is starting to listen after all.
It is disgusting and offensive to medical professionals when they hear the term ‘public service’ applied to a group of organized tax-takers who are more highly compensated for working tremendously fewer hours with almost zero personal risk (see professional liability of political class (teachers, judges, politicians) vs. doctors and nurses). Political class get tax-free perquisites that medical professionals must buy with after-tax dollars. Political class get free health insurance and tremendous pension pay in mid-50’s while doctors and nurses must pay for relatively most healthcare expenses out-of-pocket, as they work into their mid-60’s before any social security or Medicare kicks… Read more »
IMO- the best path to getting this amendment passed would be to pair it with a specific law such as a cap on aggregate pension value (higher cap for those not participating in SS) that gets raised as funded percentages raise. This is just an example. The amendment would specify the specific law(s) to pass together.
As with the progressive tax, NO ONE, including public employees…..rightfully trusts our legislators.
How soon does Illinois collapse and can’t refinance with creditors? 10 years, 1 year?
20-30 years. IL will collapse when the entire state looks and feels like Detroit; and it took Detroit 40 years to get to the point where it went bankrupt and partially solve their pension problem. But are not there yet because taxes can still go higher: 12% income state tax (like NY or CA); double/triple fees and fines; much higher real estate taxes. Sure people leave, but the fools who remain will make up the difference, until they can’t. Things will get bad before we default; neighborhoods abandoned, roads unused because of pothole and disrepair, elementary schools closed because there… Read more »
A 12% flat income tax rate? Get real. No way in hell could most people afford that. Only high earners could, which is only who pays it in the states where those rates exist, and they would leave dump Illinois if that happened. People love Cali but hate IL.
3.5%, to 4.95%, back to 3.5%, then back to 4.95%; then 6%; then 8%, then 8.8%, then 10% but only temporarily; then 12%…..
When you say People love Cali, the inland empire is paying the same high rates…
Even New York State has a 6.21% rate for people earning over $21,000 a year…
It’ll happen, and the population will drop, and people will leave when they retire, or go away to college; and neighborhoods will turn to crap as more immigrants come here to get free stuff…take a look around man, we’re already 1/3rd of the way there.
Agree with your tax assessment debtsor. I would also include another bite at the progressive apple. Maybe when they move it from 6% to 8% they will offer up the “fair” tax amendment where only the “rich” pay 8% or all taxpayers pay it. An incentive like that should get the necessary votes. They will also implement some type of service tax, retirement tax for high earners and maybe a real estate transfer tax to recoup some money from people skipping out on the bill. The good news, as other states are experiencing sky rocketing real estate, Illinois has been… Read more »
You are a total retard. New York has NO WHERE near a 12% for people who are low or mid earners, and neither does Cali. IL won’t either, as people would literally not be able to pay it who aren’t high earners. The commenters just keep getting dumber here at Wirepoints, maybe I should go to Cap Fax.
Why the name calling? Are you unable to make your point without it? It makes you appear angry and uneducated. He clearly pointed out that NY tax rates are lower for lower income but still 6% for those making 21k.
He clearly doesn’t know IL is a flat tax state and could never have a 12% flat rate. He is a doom and gloomer who seems to have an IQ of 1. However, the flat rate may be able to go to 7%, but I would say that is it. People barely making it by with kids cannot pay much more. That is a fact.
“People barely making it by with kids cannot pay much more.”
How much is your IL child exemption worth vs your federal child tax credits? Let me tell you: IL exemptions aren’t worth crap. They don’t care
And the sooner your realize that the politicans of IL don’t care about you, they only care about paying the current pensioners and the future pensioners (union members) you’ll realize that you as a resident is a meal ticket
12% flat tax is an inevitability for IL, likely in my lifetime.
I have no kids you idiot. Most people literally could not pay a 12% income tax, so it will not happen. Again, Cali has a progressive income tax, which is the only reason they can do that. I guess you can’t read, which isn’t surprising. If it did happen here I would be gone, but it won’t. Enjoy being dumb.
Gee Ted, you make me sorry that Yahoo doesn’t accept comments anymore because that’s where you belong. You need to be there with “your people”
CA has a 9.30% is the tax rate for anything single filer earning over $57k….
12.3% for any income over $590,000 for single filers, $1,000,000 for joint filers (like that marriage penalty there?)
Look around buddy, how do you think our taxes got so outrageous compared to everywhere else?
We’ve still unfortunately have a long, long way to go.
One more time dummy: IL doesn’t have a progressive income tax, so it can’t go that high on everyone. 7%, sure, 12%, no way. I am done wasting my time on you. I picture you having a beer gut, smoking a cig, pondering suicide, but instead you post another dumb comment on here.
I agree with Ted. Only a progressive tax would allow a 12% tax. Lower levels of income would be taxed at a lower percentage.
12% with the first $35,000 free from tax for single filers….hows that for you
Wow, full blown no more Yahoo comment withdrawal. Find somewhere else to vent. Don’t need you here.
Here would be my list of pension reforms for all current Tier 1 employees: Increase employee contribution rates 3 percentage points. new: Salary raises that impact pensionable salary capped at 4% (instead of the current 6% salary spikes) In addition to the above, pension reforms for Tier 1 employees hired before 1/1/1996: Decrease the amount of sick days that can be applied to pensionable service from two years to one year. Accrued sick days will still be payed out by the school district. In addition to the above, pension reforms for Tier 1 employees hired after 1/1/1996: Increase the final average… Read more »
Is there something magical about that date you’ve chosen for Tier 1 employees, 1/1/1996? I imagine you know that we’ve all seen various versions of your proposals from time to time if not exactly the same as yours. Its all moot pending the real underlying issue: whether the “pension clause” in the IL Constitution can be essentially obliterated. Meantime all such proposals are dreams and nothing more that can be turned into law.
I figured those with 25+ years vested are less than 10 years away from full pension vesting, so moving the goalposts on them now too much might be a bit unfair. They’d still have to contribute more to their pension for their remaining years.
I know it’s all moot. I just like to demonstrate what could be considered reasonable changes if there were no pension clause. Keep in mind the most reasonable change – increasing the employee contribution rate going forward by any amount – is blocked by the pension clause.
Sure, its a fun game to speculate how things might be better. But, still its moot as in a waste of time. You seem to know that, and I’m fine with it. Still, its a waste of time. Others have weighed forth on that topic and what might be done as have I. Its all moot. Maybe its smarter to be mute. You can decide that.
That’s a thoughtful list.
Or bankruptcy.
Or the IL Supreme Court discovering that pensions are ‘inequitable’ because former white Harvey employee Frank W. lives in Naples with a boat and a six figure pension while Black children in Harvey suffer with broken playground equipment and pothole filled streets. It’s not a stretch that the pension clause itself is unconstitutional because it’s racist or something because most high pensioners are white and the state is no longer a majority white or something.
Just think of that racist transfer: Retired white people quite literally picking the pockets of working Black and Brown residents.
This could be a good tactic, throw the left’s BS right back at them
Pension Systemic Racism.
Touchee Mark ! Great article !
I don’t think putting this to voters is a slam dunk at all. A dozen years ago, the unions got together (Alliance to Protect the Illinois Constitution) and succeeded in blocking a constitutional convention, something that probably seemed like a slam dunk at that time as well. Public sector and pension beneficiaries will turn out in droves to vote against it. The unions will paint this as millionaires trying to take away grandma’s entire pension or, at minimum, tax it. If it passes, it will be marginal. Never under-estimate voters’ reluctance to change.
Time to ‘act up’ or game over for non-public union taxpayers. RNE- Results Not Excuses. Vote against any state legislator, republican or democrat, unless they move the needle on the Ill taxpayer dashboard: #1or #2-tax burden; #1 or #2 State/Chicago corruption; #? or #? political incompetence (unknown, intentionally I’m sure, but maybe we can use IDES fraud as the proxy “canary in the coal mine”); and #51 (behind Puerto Rico) state fiscal condition. Despicable.
Growing up I had a close friend that made self destructive choices and I felt compelled to terminate the friendship. I grew up in Illinois and spent my entire life there until recently. The state has chosen a path that eventually ends in it’s financial ruin and moral decay. I decided I could not follow where my state was taking me or I would suffer the same fate. Angry and sad, I said goodbye. I hope my former friend eventually straightens out his life and we can reconnect. I don’t want anything to do with Illinois ever again.
Democrats only believe in “Democracy” when it suits them.
What could be more democratic than having every citizen vote on this amendment and the future of the state?
Remember this the next time a Democrat screams platitudes about “killing democracy” in response to initiatives protecting the integrity of voting. Their arguments are insincere, because when given the chance to have the citizens vote on something as important as this, the Democrats don’t want to allow any of us to do so.
Unions to their servant lawmakers. Ah…no.