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In 2021, 27 of the 80 suburban police department pension funds reported more pension recipients than officers. A decade prior, that was the case in just four towns. "What that means is more of the overall property tax levy is going to pay for pension obligations and money allocated to the day-to-day operations continues to decrease," said Dorothy Wisniewski, Des Plaines' assistant city manager and finance director. "You have to start looking at how you do more with less, cutting expenditures and possibly raising revenues elsewhere."
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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Pretty sure every pension system is experiencing the same declining active/inactive ratios.
Many other systems have adjusted their plans including the Federal Government some years ago. Not so in Illinois
It’s been that way for years. About 7 years ago I looked at the Teachers pension fund CAFR and that was what motivated me to work on leaving, which happened the year after that. I love the life I had in Chicago, but the pension debt and active/inactive ratio is simply unsustainable.
A lot of those cop pension plans are still battling in Ill supreme court to overturn consolidation. I wonder if these court battles are prompted by retired Tier I?
Pensioners have no rights as to the level of funding or how the funds are invested but rather only that their pensions are paid. That consolidation lawsuit doesn’t stand much of a chance. Also, is it really the “cops” fighting this lawsuit or the pension managers that are going to lose their cut upon consolidation? Tier 1 or 2 has nothing to do with it.
Those managers are trying to protect their featherbeds.
PPF – pensioners do have the ability to bring a pension intercept action so state funds can be diverted to pensions (see, e.g., Harvey). A little different spin on “no rights”. The legal issues are not the interesting ones, no matter the emotions. When Government entities find a huge chunk of their budget going to work already performed, it becomes very difficult to sustain operations. And raising taxes and collecting them are two different things,
“PPF – pensioners do have the ability to bring a pension intercept action so state funds can be diverted to pensions (see, e.g., Harvey)” Fair point and you’re correct that there is nuance to this rule. The court ruled that pensioners only had a right to receive their monthly payments but they did discuss the ability of pensioners to demand funding if it appeared that the pension funds were in danger of not having enough money to make those payments. While they ruled, at the time, pensioners couldn’t demand more funds be added, they did state that pensioners could demand… Read more »
How does the most important constitutional principle of ‘equity‘ apply to this? The Village of Harvey is merely a transport layer that shuffles funds from mostly black taxpayers to mostly white retirees. How do you think the ILSC will analyze this disparate and systemically racist impact upon pensions? Will it not matter than black people in Harvey stay poor so Frank in Punta Gorda can take another cruise? Or is the Contract Clause merely another structurally white supremacist system that perpetuates racial inequities? The Contract Clause itself is unconstitutional when it upholds a system purposely designed to keep black people… Read more »
Aren’t those judges on the pension plans too? Therein lies the answer to your query.
I am not sure it is entirely provable as to collection of taxes. People leave when they perceive a poor value in terms of services or that the situation is intractable. Certainly people are leaving the state – query how much that will continue. There are some pretty tony suburbs on the list of those with more retirees than active officers – one might suspect that they can find a way to survive. Not so much with less well off suburbs. No way to spin this situation as a positive.
Also a sign of stagnant populations.
Pension payouts need to come into line with their actual funding level.
No. Funding levels need to come into line with the actual payouts. That’s what is legally allowed.
We will need more taxes, cut spending elsewhere to free up funds for pensions or a combination of both. We either pay more into the funds now or much more later. Voters choice.
The “voters” just may decide they don’t like either of those options. New mob in charge now.
The last attempt to steal from pensioners occurred under Dem control. Republicans didn’t support it because it didn’t steal enough. Both parties would love to steal but that pesky constitution keeps getting in the way.
You keep dreaming though.
You may not have noticed, but the new mob does not revere the constitution. It gets in their way. It’s just a document
You haven’t noticed that neither party truly reveres the constitution and typically only tout it’s words when it suits them. The ability to stop either mob from violating the rights of others is precisely what makes our constitution so great. The democrats tried to steal pensions and the court smacked them down 7-0.
You can hold out hope that some day a bunch of retired people will take a cut to their pensions. It just doesn’t appear to be very likely and certainly not anytime soon. But you can dream.
Yup. Illinois is in this mess because the state kept falling farther and farther behind in the funding levels. Of course, if it had taxed to the level it needed, more people would have already left, and that would have forced the politicians to deal with it sooner. Bottom line, the state caused this problem, not the unions. The Dems never had the desire or backbone to stand up to the unions. Taxes will now need to be raised to new insane levels each year, and those who stay in Illinois will pay the tab. Red states will leave Illinois… Read more »
The commercial club of Chicago outlined the taxes that would need to be increased. They were hardly insane, raising income taxes to 5.95% from 4.95% and taxing services. People will complain about this but ultimately it will be cheaper than waiting. My guess is that we will wait and the cost will only go up. That’s how the voters of Illinois like it.
Here is the problem though. Taxes will be hiked with the stated reason of pensions but once the tax hikes are in the funds will be spent on assorted feel good vote buying programs instead of being devoted by pensions al la “Lottery for education” shell game. Illinois voters…they never learn and of the few that do…they leave the State.
Your boy Pritzker just cut pensions short by +$2B from actuarial and declared a ‘balanced budget’. So your concept of ‘payout’ is being changed by the Democrats.
Why would you think Pritzker is “my boy”? Because I believe contracts will need to be honored. Because I don’t call him juvenile names? Pensions were shorted about 4.4 billion because of the “Edgar” pension ramp. Stop acting like this was something that Pritzker just did. It’s been going on for awhile. I agree that more should be paid and neither party is stepping up. Although, JB has at least paid “extra” in compared to other governors so I don’t quite understand why people are now blaming pritzker vs other governors that did the same thing or worse, shorted statutory… Read more »
To be sure it will be pay later if my assumptions are correct. Then the Illinois people will look dumbfounded and say “how could this happen” because to them they just can’t envision a situation where eligible individuals become informed about t he issues and vote accordingly. That takes effort and in Illinois sporting team statistics are much more important than the governance of the State they live in.
Don’t be shocked when IOU’s are passed out with reduced payouts – your boy Pritzker and Democrats see that as a way out of the mess created by unions and corrupt courts.
Don’t be shocked when your boy Pritzker raises your taxes and pensioners continue to receive their checks before all other services. Plenty of taxes left to be raised.
No chance in hell, I am leaving it to be paid by someone else. Maybe the poor illegal immigrants can pay for the overly generous pensions.
You keep saying you’re going to leave yet you don’t have the will to actually make it happen. You’re the perfect Illinois taxpayer. Complain all day about your situation yet do nothing about it. Illinois politicians depend on people like you and your fake outrage. Just keep writing them checks PT.
You are watching the destruction of Illinois as it happens.
More and more people are going to flee the state because huge tax increases.
Once a great state to be in, now a great state to leave.
So what? If these municipalities were setting aside enough money to meet actuarial requirements it wouldn’t matter. Pay more to fund pensions now or pay much more later.
Sad, PPF, sad.
debtsor,
PPF has a severe case of cognitive dissonance!!
So, somehow this ratio under discussion is somehow the pensioners fault as you see it, right? Let me remind you of a particular comment made when “Amendment 1” was passed into IL state law to seriously reduce IL employee pension entitlements partly in anticipation of the “ratio problem” you’ve cited. The IL Supreme Court overturned that law in May of 2015 citing in part that the problems resulting from repetitive below-actuarial levels of the state’s public employee pension systems surely were mathematically predictable in advance, that several other other states had not done similar lower funding levels and that any… Read more »
The General Assembly had available to it all the information it needed to estimate the long-term costs of those provisions, including the costs of annual annuity increases, and the provisions have operated as designed. The General Assembly understood that the provisions would be subject to the pension protection clause. In addition, the law was clear that the promised benefits would therefore have to be paid, and that the responsibility for providing the State’s share of the necessary funding fell squarely on the legislature’s shoulders. Accordingly, the funding problems which developed were entirely foreseeable. The General Assembly may find itself in crisis,… Read more »
I just KNEW you’d have the exact wording of the IL Supreme Court’s decision somewhere at hand. Thanks for pounding it home that way. Not having that, my version was much weaker.
It is sad that these municipalities didn’t pay their bills on time. Truly sad.
The problem is you and I and all other taxpayers paid what was required from us via property and other taxes. More than enough was paid otherwise our bills would have been higher. Within all the city/municipal/school/etc contracts in every town they knew the exact amount collected but once it left our hands where did the money go? You and I are not responsible for the mismanagement and misappropriations of public money. You have made it clear it’s the voters who chose the politicians that includes you and I but we were lied to once they got our votes. We… Read more »
More than enough was paid otherwise our bills would have been higher. No it wasn’t more than enough. One needs to only look at the recent budget to realize that the states budget needed 4.4 billion more dollars to pay the actuarial contribution. Instead of raising taxes or cutting other spending our leaders pretend (along with voter ignorance or indifference) that we paid enough in taxes. For the spending the voters want we did not collect enough. This is no different. You and I are not responsible for the mismanagement and misappropriations of public money. You are wrong again. If… Read more »
At least I am consistently wrong in your eyes. It feels pretty good to be wrong 100% of the time. At least I am acing at something.LOL. Misappropriations is a crime. Try to do that in any corporate setting and it is immediate dismissal. I see that happen many time but this case is the most publicized. Rita Crundwell. https://www.politico.com/news/magazine/2023/05/12/dixon-illinois-city-fraud-betrayal-00075869 https://link.springer.com/article/10.1007/s11115-022-00651-8 How many times does this happen in smaller amounts all over the state yet taxpayers are on the hook. I thought laws made should benefit the general population not just a select few for those with political clout. But… Read more »
Misappropriations is wrong. First you need to prove it happened. Passing a budget that doesn’t allocate enough money is not a crime it’s just bad budgeting. Even if you proved misappropriations, you would only be able to criminally charge the politician that committed the crime but the taxpayers would still be liable for paying for the crime. If you think otherwise, you’re wrong! Think about a police officer violating someones rights. If the person had their rights violated, the taxpayers are on the hook even if the officer committed a crime. It doesn’t matter. If you think otherwise, you’re wrong!… Read more »
Wait wait wait!!! Bad budgeting in Illinois??? Say it can’t be!!
(and all done by politicians elected by the Illinois voters including those too lazy to vote)
Freddy, cab be so funny at times! I know that feeling, too—at home sometimes but here a LOT. A sane person would take the hint, I suppose, but apparently preferring some mild torture now and then I keep swimming against the tide just the same.
You’re correct. The funds were spent on assorted “feel good” vote buying programs instead of being devoted to the pensions as they should have. The Edgar ramp comes to mind but that didn’t seem to matter to the voters. The voters of Illinois caused the problem by voting for and electing the non funding politicians. Every time I have suggested the problems I was labeled as an old spoil sport fuddy-duddy among other names meaning to me the voters decided to spend the money foolishly instead of paying the bills knowing that future generations would be on the hook for… Read more »