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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 thought maybe this article would have some insight, but like all media these days, the journalist is fundamentally unserious, with the often repeated but entirely dubious claim that IL is a donor state that gets back less from the federal government than it receives. She cites to SC, “a state that consistently receives more in funding from the federal government than its residents contribute.” Her twitter feed even retweets someone’s tweet that falsely asserts that SC is the ‘biggest leech’ in the nation. Well, a 30 second google search would have found out that these claims are literally fake… Read more »
“to this ‘journalist’, seniors that paid into social security and medicare merely getting back their investment is ‘leeching’”
Sounds familiar. I’ve seen a few posters on this board that think teachers, police officers, and firefighters that paid into their pension and worked the required years are thieves for receiving their investment back in the form of pensions. I guess those posters are “fundamentally unserious”.
To be clear: Public Sector Union Members that sold their votes and bribed politicians for grossly above market wages and obscene benefits are criminals. They engaged in a multi-decade criminal racketeering and bribery to steal from honest taxpayers and do not deserve their ill gotten gains. Period. On a scale of criminality from most criminal to least criminal: AFSCME, SEIU, CTU, IFT. Note that Cops and Firefighters aren’t on that list (which is why their pensions tend to be the most poorly funded) so they deserve their pensions. How to judge criminality? One rule of thumb is dollar amount of… Read more »
I agree with TPG, except that Chicago and IL first responders’ pensions are still too lavish. The average Chicago police officer’s pension is $62,000 a year. Even 10 years ago, a Chicago firefighter’s pension was worth in excess of $1,300,000. https://www.chicagobusiness.com/article/20101126/BLOGS02/311269995/average-retired-firefighter-cop-gets-pension-worth-more-than-1-million-group-says My retired uncle across our northern border is a retired firefighter. His pension is $2,700 a month. He doesn’t get social security if I remember correctly. That’s less than half of what we pay our pensions. I don’t think they should have defined pension benefits at all, but I’m in the minority view here. But regardless, the pensions are… Read more »
Unless you are also “fundamentally unserious” then you will admit that pensioners have a legal and valid contractual relationship to their earned pensions through years of work and contributions. While that contract is valid the state needs to seek a way to diminish that contract. Do you call them thieves because you feel bad about taking away their contractual rights? Does it make you feel like you have the higher moral ground?
Parties renegotiate contracts all the time. Lots of creditors and debtors are renegotiating right now due to this pandemic. Why can’t your contract be renegotiated?
Because your contractual right is enshrined in the constitution, to the exclusion of every other contract in the state. Your pension is basically a civil right at this point.
I don’t have a pension. I am not a public sector worker.
Then what dog do you have in this fight?
People that receive medicare and social security don’t use their votes to to get benefits? We just paid a stimulus to social security recipients even though they did not see a downturn in income.
They negotiated their contract for all the public to see. Completely legal and valid. Hard to take you serious when you call a teacher or fighfighter a criminal for receiving something that was promised to them when they started their career. It’s not their fault the public doesn’t pay attention.
You’re comparing apples to oranges. Medicare, medicaid and social security aren’t contracts, they are government entitlement programs. Benefits can be increased, reduced, terminated, modified, or changed at any time. State pensions, according to the IL Supreme Court (headed by the wife of allegedly corrupt Chicago alderman Ed Burke) are the most ‘airtight’ contracts in the history of common law, going all the way back to the times before the Magna Carta. Even King John’s powers – divinely granted – could be modified and abrogated by the citizens and taxpayers of England, but a union member’s contract in the state of… Read more »
You’re right. Pensions are a contractual right and social security is not. Therefore, pensioners have more of right to their money and investment than SS recipients. So a journalist to suggest they are “leeching” is probably more appropriate for entitlement holders than pensioners. I have no problem with you or anyone else advocating for a renegotiating of a contract. I have a problem when you or others call them thieves. These people were not given a choice whether or not they wanted to pay into a pension. They were told it is a requirement and in return their pensions are… Read more »
Here’s the fact: Illinois Public Sector Unions provided votes, massive campaign contributions and boots-on-the-ground at election time to Illinois politicians in exchange for grossly above market wages and gold plated pensions to the detriment of the taxpayer and society as a whole. This has been an endless cycle since the 1950’s. The politicians had a duty to be responsible stewards of the taxpayers money and failed. The Unions engaged in bribery. These crimes have been ongoing, continue to this day and will exist wherever Public Sector unions can collectively bargain. As an Illinois taxpayer I feel no moral compulsion to… Read more »
Well, you know essentially the same thing happens at the federal level with the courts looking with a friendly smile at the super rich who pour huge amounts of money into their causes. Think of that when you think about legalized corruption in politics, too. There is no end to those who can influence politicians legally and at the expense of those who cannot do so. Its happening just here in IL; its happening almost everywhere and certaintly at the federal level.
Right. Corruption occurs at all levels. But at least when the super rich pour money into a pet cause and reap massive tax benefits they are, theoretically, contributing to something that is or can become a public good. They are not making a “donation” and directly expecting a quid-pro-quo cash repayment like Public Sector Unions, Politicians and Public Sector worker salaries and benefits. The Public Sector Unions reap far more cash back for their “donations” than they contribute. All at taxpayer expense.
“But at least when the super rich pour money into a pet cause and reap massive tax benefits they are, theoretically, contributing to something that is or can become a public good”
My guess is the message that the super rich provide more to society than teachers, firefighters, and police is probably not a winning message. But hey give it a shot to see if you can find a candidate that will run with that theme.
The super rich abuse the system too, no doubt. But that’s not the issue before us: we are talking about the underfunded, nearly broke IL pensions, that overtaxed IL residents can’t afford to pay any longer. There’s a reason why our state’s pensions are the worst funded in the country. And pensioners want to stick their head in the sand and ignore the calamity unfolding slowly before everyone’s eyes.
Pensioners are not the only ones sticking their heads in the sand. Pensions were around 40% funded back in 1970 and have hovered around the same point for many years. What have the voters done to fix this problem? Did they support candidates that required actuarial sound funding? How about candidates that wanted to move workers to defined contribution plans? Nope. Now you expect the public workers to just willfully give up their contractual promise from Illinois taxpayers. Why are you not asking bondholders and vendors to give up their contractual rights to their promised payments? Would you be alright… Read more »
I didn’t vote for those guys. The dumb Democrat voters of IL did. Bond holders should take a haircut too. But the difference is that the average bondholders gets back, as a percentage of their investment, far less than the average pensioner. CPS teachers get their entire pension investment back in less than two years! IL bondholders get meager interest offset only by the tax free nature of municipal bonds. And they provided something of value – access to capital. Pensioners are being paid not to work. To the exclusion of sickly and hungry children with decrepit playgrounds and failing… Read more »
Enough with the whataboutisms. The federal issues can be widely discussed on reddit or zerohedge. We’re talking about the acute IL problem with it’s pensions.
Providing financial support and votes for people that support your cause is not illegal. It’s not bribery. It’s free speech. If you don’t agree with it get others that feel your way to provide votes and financial support for your position to eliminate public employee unions and collective bargaining. There are far more non union members that you can organize to your side.
You don’t see the unethical conflict of interest with government employee unions giving political contributions to the very same politicians who in turn vote to increase their pay? Or do you just turn a blind eye, because it’s the Chicago way…. In the private sector, if the union boss paid off the company CEO to get a favorable contract, it’s called bribery. It’s a crime. In fact, something similar to this happened in Michigan – just last year – involving GM, Fiat and UAW. Criminal charges are pending against those involved. It lead to the ouster of the UAW President.… Read more »
They are not paying a bribe. They are supporting candidates who they believe will support their cause. When a wealthy individual donates money to a candidate that supports lower taxes is that bribing an elected official? When an environmentalist donates money to a candidate that supports green initiatives are they bribing? No it’s not a crime. The politician is free to change their mind once elected and vote how they see fit. There is no quid pro quo. The Supreme Court has ruled all of this is free speech. If you have an issue with this (many democrats are in… Read more »
You’re just burying your head in the sand. Justify it anyway you want but a large haircut is coming. And when children are literally starving in the street, and the playground are decrepit, and the social services are gutted, just so pensioners can get ‘theirs’, hopefully they’ll feel some shame, but probably not.
What about the children? Are you sure you’re not a democrat? If you’re not willing to increase the flat tax rate or pass the progressive tax does that mean you are for “gutting” social services and have children “starve” in the street? Will you feel shame if a tax increase doesn’t pass? Using your twisted logic that’s the only conclusion I can reach. Also, if you really believed a large haircut was coming you wouldn’t be on here everyday calling police and teachers thieves for wanting to collect their contractual pension payments. Your level of frustration indicates you believe that… Read more »
“Using your twisted logic that’s the only conclusion I can reach.” That’s not logic, all you’re asking for is more money to pay both. But we are already taxed at some of the highest rates in the country when all forms of taxes are combined. So the burden is really on you to explain why our taxes should go even higher, and I should pay more, out of my pocket, to you and your ilk, when I already pay more than every surrounding state (all taxes combined, not just income tax). The only justification you have is “the union’s constitutional… Read more »
I don’t have a pension. You have a serious reading comprehension problem. My response isn’t “pay up”. That’s the Illinois Supreme court and the pensioners contract. I have pointed out that calling pensioners thieves is ridiculous. I am merely stating reality. If I had a pension I wouldn’t feel any more obligated to give it back than bondholders or vendors. The state will be forced to pay pensioners, bondholders and vendors before other services. If they want money for other services they will be forced to increase taxes. Why do you think the progressive tax is on the ballot? More… Read more »
Because, debts that cannot be repaid, will not be repaid. It’s basic math, The Truth Hurts. Raising taxes will pay a little more towards the debt, but at some point, even the highest tax rate will produce even less and less revenue. It’s mathematically impossible to repay these debts.
Finally some common ground. I agree that when raising taxes produces less revenue it will no longer be a viable solution sought by politicians. Until then it will be a go to move. We have not arrived at that point yet. Many taxes are on their way.
“Many taxes are on their way.”
Six weeks ago, I would have agreed with you. This is Illinois, for goodness sakes.
Today, I’m not so sure. It’s going to be a hard sell for local municipals to raise taxes on people who aren’t paying their rent, homeowners who have skipped mortgage payments, and everyone else just treading water. With the local elected official explaining at a townhall that it’s all to make the pension payments. Some places might get away with higher taxes but other communities are going to get serious blow back.
Your reasoning is exactly what JB will use to get the progressive tax approved by the voters. It will be along the lines … “Now more than ever those that are less fortunate need help from those making more than 250k per year. The people making more than 250k are truly blessed right now and we need them to step up and help all of Illinois” Instead of impacting 3% of Illinois taxpayers it will probably be less than 2% after this lock down. I guess we will see in November. I’m not a fan of progressive taxes I just… Read more »
I’d love to see a more recent poll of the unfair tax now that the state has been shut down.