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Martin

Illinois Pension Crisis

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Martin

A-dramatic-rise-in-pension-benefits-G1.png?resize=640%2C516

 

 

Total pension benefits have grown at an annually compounded rate of 8.8 percent over the past three decades. Compared to 1987, benefits have grown 1,061 percent.

 

That growth is six times more than total state general revenue growth (236 percent) over the same time period; eight times more than median household income growth (127 percent); and nearly ten times more than inflation (111 percent).

 

 

Since 1987, politicians have grown pension obligations through perks that:

 

Add compounding to a retiree’s 3 percent cost-of-living adjustment. That doubles a retiree’s annual pension benefits after 25 years.

Significantly increased the pension benefit formulas for the Teachers’ Retirement System, or TRS, and the State Employees’ Retirement System, or SERS.

Provided lucrative early retirement options.

Allow workers to boost their service credit by up to two years using accumulated unpaid sick leave.

Grant automatic salary bumps to workers who earn masters and other graduate degrees.

Allow spiking of end-of-career salaries.

 

Source: http://www.wirepoints.com/illinois-state-pensions-overpromised-not-underfunded-wirepoints-special-report/

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Government pensions in Illinois cannot be reduced because the state constitution prohibits that. The state already pays one-fourth of its budget to state pensions. Either the state must raise taxes drastically or cut state services elsewhere. Pritzker, the Democrat nominee for Governor in 2018, proposes converting the state income tax from a flat tax to a graduated one. Rauner, the Republican incumbent, wants local school districts to pick up more of the cost of their employees' pensions--which means those school districts must raise taxes or cut spending on other purposes.

 

Illinois has reached its Margaret Thatcher limit.

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Jax

I feel for our neighbors to the east. Not a happy place these days.

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Tea Party Hooligan

I feel for our neighbors to the east. Not a happy place these days.

 

 

The problem with socialism is that you eventually run out of other people's money. Unions are socialist constructs. Public sector unions are worse. Even socialist like FDR and the Mayor of Milwaukee were against public sector unions.

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MontyPython

I feel for our neighbors to the east. Not a happy place these days.

 

Well I feel sorry for any Illinois residents who voted against the current "leaders" in that state, and just against Democrats in general.

 

As for the rest, they can cry me a river.

 

B)

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Jax

Well I feel sorry for any Illinois residents who voted against the current "leaders" in that state, and just against Democrats in general.

 

As for the rest, they can cry me a river.

 

B)

 

Except the current Governor is a Republican. (Who's found it nearly impossible to combat the Dem-controlled legislature.) Mike Madigan's got a stranglehold on the legislature. So even though they managed to get a conservative (or, frankly, moderate) elected to the Governor's office, they haven't been able to flip the state house. And dollars to donuts say Pritzker defeats Rauner in the fall.

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MontyPython

Except the current Governor is a Republican. (Who's found it nearly impossible to combat the Dem-controlled legislature.) Mike Madigan's got a stranglehold on the legislature. So even though they managed to get a conservative (or, frankly, moderate) elected to the Governor's office, they haven't been able to flip the state house. And dollars to donuts say Pritzker defeats Rauner in the fall.

 

Fair enough, and it's kinda what I meant by "leaders" (i.e. plural.) Sure they've got a token Republican governor, LOL, but as you say he finds it "nearly impossible to combat the Dem-controlled legislature."

 

And I forget, between Pritzker & Rauner, which is the R, which is the D, which is the incumbent, etc etc etc.

 

B)

Edited by MontyPython

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Martin
And I forget, between Pritzker & Rauner, which is the R, which is the D, which is the incumbent, etc etc etc.B)

 

Rauner ® is the incumbent, his opponent is Pritzker (D). Pritzker's plan to cover the pension deficit is to amend the state constitution to convert the state income tax from flat (same rate for everybody) to progressive (the higher the income, the higher the rate). The voters would likely approve this under the impression that it would soak only the rich. This might or might not induce the wealthiest taxpayers to walk across the state line to Indiana. What it would certainly do is make it tougher to forecast revenue because the highest incomes are the most volatile. This is one of California's fiscal problems and it is directly due to their progressive state income tax. Furthermore, it won't necessarily solve the pension deficit. The California Public Employee Retirement System (CalPERS) is only 68% funded in spite of the state's progressive income tax. The California State Teacher Retirement System (CalSTRS) is only 64% funded.

 

Fun(d) fact: The federal tax cut bill reduced the amount of state and local taxes one can deduct on a federal income tax return. If Illinois converts to a progressive state income tax, its wealthiest taxpayers will see an increase not only in state but also federal income tax.

 

 

 

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Noclevermoniker

Neighboring states better get the fencing and barbed wire ready...

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Jax

Fair enough, and it's kinda what I meant by "leaders" (i.e. plural.) Sure they've got a token Republican governor, LOL, but as you say he finds it "nearly impossible to combat the Dem-controlled legislature."

 

And I forget, between Pritzker & Rauner, which is the R, which is the D, which is the incumbent, etc etc etc.

 

B)

 

Rauner is the incumbent "R."

 

Pritzker is the D challenger. (And also a law school classmate of mine.)

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MontyPython

Thanks Martin & Smoosie!

 

:)

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oki

Neighboring states better get the fencing and barbed wire ready...

 

 

To late, why do you think Milwaukee has turned to such a sh$t hole? Worse much of it has been moving north. What these f nuts don't realize is that people in these parts are armed. So far at least most of the violence and crap has largely been between thugs and drug dealers, but it's only a matter of time until innocent people are caught in the crossfire. Ironically though a year or two back I was at a area Pistol/Rifle range and met an older couple moved in from a Chicago area suburb. To say there comments felt like they had been let out of a cage is an understatement. They still had a is this for real aura about them. Given that they where target shooting I'd say it was safe to assume they weren't big city Libs.

 

Oki

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Taggart Transcontinental

A-dramatic-rise-in-pension-benefits-G1.png?resize=640%2C516

 

 

Total pension benefits have grown at an annually compounded rate of 8.8 percent over the past three decades. Compared to 1987, benefits have grown 1,061 percent.

 

That growth is six times more than total state general revenue growth (236 percent) over the same time period; eight times more than median household income growth (127 percent); and nearly ten times more than inflation (111 percent).

 

 

Since 1987, politicians have grown pension obligations through perks that:

 

Add compounding to a retiree's 3 percent cost-of-living adjustment. That doubles a retiree's annual pension benefits after 25 years.

Significantly increased the pension benefit formulas for the Teachers' Retirement System, or TRS, and the State Employees' Retirement System, or SERS.

Provided lucrative early retirement options.

Allow workers to boost their service credit by up to two years using accumulated unpaid sick leave.

Grant automatic salary bumps to workers who earn masters and other graduate degrees.

Allow spiking of end-of-career salaries.

 

Source: http://www.wirepoint...special-report/

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Government pensions in Illinois cannot be reduced because the state constitution prohibits that. The state already pays one-fourth of its budget to state pensions. Either the state must raise taxes drastically or cut state services elsewhere. Pritzker, the Democrat nominee for Governor in 2018, proposes converting the state income tax from a flat tax to a graduated one. Rauner, the Republican incumbent, wants local school districts to pick up more of the cost of their employees' pensions--which means those school districts must raise taxes or cut spending on other purposes.

 

Illinois has reached its Margaret Thatcher limit.

 

Hey check it out a chart!!!!

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intotheblackhole

Once the money runs out and the states and cities go bankrupt then we can get back to reality and hopefully some financial responsibility.

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spt

I wonder if what happened there is the same that is happening in KY. the employees of the state are required by law to put 10% of their paychecks into the pension fund. However several years ago when it became law that the state budget had to balance the legislatures saw all this money sitting in the pension fund and they couldn't keep their grubby hands off it so they robbed it saying they would put the money back. Well instead of putting the money back they kept robbing it. this was both dem and republican governors. So this year they are changing the retirement because there isn't enough money and the governor is calling us spoiled children for wanting what we paid for. Then to top it all off in a secret midnight law they are now robbing the healthcare fund for employees to again balance the budget for the gov's pet projects. This is the 2% of out paycheck each paycheck that is taken out for the health insurance fund so we can have insurance but then we also have to pay premiums. Not as much as others but still have to pay that on top of the 2% taken out. How many years until they say we can't have health insurance because it would cost too much. Oh and did I mention this is a Republican governor and republican legislature that is doing this. By the way their pension and health care system that they pay nothing into they fully funded this year. Because after all we can't expect them to have to pay anything after all they make the laws.

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SARGE

Once the money runs out and the states and cities go bankrupt then we can get back to reality and hopefully some financial responsibility.

 

 

Seriously, are you that naïve?

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intotheblackhole

Seriously, are you that naïve?

 

Yup.

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zurg

It's hilarious if predictable that one of the proposals NOT on the table is a pension cut.

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Martin
It's hilarious if predictable that one of the proposals NOT on the table is a pension cut.

 

That would be illegal under the Illinois state constitution. A state court has already upheld the legality of that provision. To amend the state constitution would require a 3/5 vote in the General Assembly plus ratification by the voters. It's possible, but only if the political pressure to amend it exceeds the political pressure to resist the amendment.

 

That political pressure might accumulate if the share of the state budget allocated to pensions went from the current one-quarter to two-fifths or even half. It makes sense to pay taxes to get police and fire protection and education for your state's children. It does not make sense to pay a boatload of taxes to state and local governments who are cutting police and fire protection and education services and giving you instead a lot of well-heeled retired policemen, retired firemen, and retired teachers and school administrators.

 

 

 

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Martin
Thanks Martin & Smoosie! :)

 

You are welcome, Mr. Python. What we're seeing here in the pension crisis of Illinois, worse but in the same direction as the pension crises of California, Connecticut, and Kentucky, is a tale Ayn Rand could have written. She called it "the aristocracy of pull."

 

Fun(d) fact: When Barack Obama won election to the U.S. Senate, the University of Chicago Hospital promoted Michelle Obama to vice-president and raised her salary from $122,000 a year to $317,000. That must have given her pension benefits quite a boost.

 

 

 

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spt

You are welcome, Mr. Python. What we're seeing here in the pension crisis of Illinois, worse but in the same direction as the pension crises of California, Connecticut, and Kentucky, is a tale Ayn Rand could have written. She called it "the aristocracy of pull."

 

Fun(d) fact: When Barack Obama won election to the U.S. Senate, the University of Chicago Hospital promoted Michelle Obama to vice-president and raised her salary from $122,000 a year to $317,000. That must have given her pension benefits quite a boost.

The problem in Kentucky is where the state employees are required by law to pay 10% of their pay into their pension fund and 2% of their pay into their health care fund to keep premium costs down. Several years ago the Legislatures saw all that money sitting in the pension fund and they robbed the fund for their pet projects. This happened under Democrat and Republican governors and legislatures. Now they are saying the funds are underfunded and that the state employees and teachers are being spoiled brats (our republican governor's words) that we are demanding our money that we paid in. This year in a midnight bill where they took a sanitation bill gutted it and replaced it with a pension bill they are cutting our pension and stealing more money from the health care account for their pet projects. Before long they will tell us we can't have health insurance due to no funds. This is all because the Governors and Legislatures have stolen money that the state employees put into the account. They are all just a bunch of thieves.

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zurg

That would be illegal under the Illinois state constitution. A state court has already upheld the legality of that provision. To amend the state constitution would require a 3/5 vote in the General Assembly plus ratification by the voters. It's possible, but only if the political pressure to amend it exceeds the political pressure to resist the amendment.

 

That political pressure might accumulate if the share of the state budget allocated to pensions went from the current one-quarter to two-fifths or even half. It makes sense to pay taxes to get police and fire protection and education for your state's children. It does not make sense to pay a boatload of taxes to state and local governments who are cutting police and fire protection and education services and giving you instead a lot of well-heeled retired policemen, retired firemen, and retired teachers and school administrators.

Well, obviously I meant passing a constitutional amendment. So as I said, it's hilarious that it's not even brought up as a possibility.

 

And why is it not possible? Because politicians prefer to bribe their ways into office rather than taking care of the vast majority of people.

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Martin
Well, obviously I meant passing a constitutional amendment. So as I said, it's hilarious that it's not even brought up as a possibility.

 

You're right. First, one of the candidates, Pritzker, is proposing a progressive state income tax to replace the flat tax and that would require amending the state constitution. So, why no amendment to allow pension cuts? Because the government employee unions would fight it tooth and nail.

 

 

 

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zurg

You're right. First, one of the candidates, Pritzker, is proposing a progressive state income tax to replace the flat tax and that would require amending the state constitution. So, why no amendment to allow pension cuts? Because the government employee unions would fight it tooth and nail.

Yup, although now that I think of my choice of words I should probably call it sad and not hilarious.

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spt

Kentucky is not far behind Illinois and here is why. By the way this is a republican governor and republican legislature. I am a republican but this is an embarrassment to our party. This is funds the state employees are required by law to pay into the fund from their paychecks. Now they are stealing it. read about it here

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Martin

When an Illinois city shorts its pension funds, as 275 of them have been doing recently, the state can garnish city revenues and direct them to the pension funds. The state of Illinois has done that recently to two Chicago suburbs, Harvey and North Chicago. Harvey has gotten a restraining order to suspend the garnishment. Many Illinois cities have shorted their pension funds but Harvey and North Chicago were among the worst.

 

If many more cities get their taxes garnished by the state to protect their underfunded pension funds, municipal services in Illinois will collapse. Harvey laid off 40 policemen and firemen when the state garnished their tax revenue.

 

The source of the problem is that so many cities in Illinois and even the state itself engaged in Enron accounting, concealing accumulating debts to make the current budget look balanced. States do not have a legal right to declare bankruptcy so the state is likely to garnish more municipal taxes. Expect a wave of municipal bankruptcies in Illinois.

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