Illinois - save the pensions!
 

Two of the assumptions here are that residents want to "maintain their current level of services" and that public service pensions are protected by the state's constitution and must be paid. :D So, moving on:

http://midwest.chicagofedblogs.org/?p=3096

I'm not sure what's more mind-blowing - a typical homeowner ($250K) paying $75,000 over 30 years for pension promises built on a crony math, referring to tax streams as "revenue" instead of parasitic rake, or the neat and tidy charts of bad math and projections used to substantiate this fine idea brought to you by the same thinking that dug this financial ditch to begin with.

Wow. :eek:

If Illinois had a better climate, these guys would be shaking down the homeless and considering that "untapped revenue"....

Step 1: Reduce any state pension payment by 75% if mailed out of state, and/or to an in state address not owned and homesteaded by the pension recipient.

Step 2: Budget balanced.

If you want the full benefit of your state pension, the state should be allowed the full economic benefit of the payment.

I am not sure what to do. First it is pretty obvious in may cases lower level city, county and state workers across the USA are over paid and under worked and get over the top benefit packages. California where I came from and knew a good handful of such workers is a glaring example. On the other hand even though they were over paid and under worked it isn't fair to cut a promised retirement package once a person is already retired. How about cutting such workers pay and benefits to match similar private sector jobs and borrowing against future savings to fund pensions?

Don't give me that crap about the needing to pay more to attract better workers. I knew people at Cal Trans that used to brag about how little they worked and they are visible for all to see. Typical was 3 guys standing around while one guy was filling a pot hole with a shovel.

We call that PennDot.

My wife's best girl friend retired 2 years ago after 25 yrs as a Conn. School teacher. About 4 months ago her pension check was reduced by $150.00 !!! The letter from her union said that the system was underfunded by the dtste for about 15 years.

Do you believe that. The pols in my state bring up a pension disaster every time they speak. So a similar move here soon would not surprise.

First, I wish nobody who has earned a pension to lose that pension.

However, in the private sector, it has happened again and again. Eastern Airlines pops into my mind.

In the private, it was very common for a large corp to raid its pension fund - borrowing at low interest to fund this or that expansion - and, ultimately, leave the pensioners on shaky ground.

My understanding (and I am not as well-read on this topic as many here) is that it was also a practice to isolate the profitable parts of a business, attach the pension to the not-so-profitable parts, and then scuttle the one with the debt. (I'd welcome a schooling if this is untrue.)

In the private sector, pensioners who got nothing from a company-gone-under received a great big "Too bad" from everyone else. After all, what were they/we to do?

So, now we move to the area of public sector.

That question: "What are they/we to do?" apparently has a different answer. Apparently, the rest of society (connected to the responsibility to pay) should keep paying.

Just as in the private sector, the public sector "raided" the pension funds by diverting funds to other uses. The pension failure was entirely predictable. It wasn't like the pencil pushers woke up one day last year and said, "Oh, look! We're going to have a problem NEXT year!"

Personally, I do not have a problem with the public being held accountable to keep the promises made by THOSE THEY ELECTED... BUT... I'd like to see some consistency at the Federal level if this is how it is going to be done.

One doesn't have to look far to know what I am talking about. Social Security was funded by people for themselves. It is not, nor was ever intended to be, a DOLE.

The Social Security fund was "raided" and the attitude has been, "Too bad."


Just my opinion.


Dave

They will have to raise property taxes and personal income taxes.

Eventually global warming will catch up to them and the winter snow removal costs will decline, as well as heating costs for public buildings.

So basically, those who o not have pensions get to pay for those who do?

I feel for anyone who loses one, but hey, why make it suck for both of us? Tough news, but it's is YOUR problem, not MINE,

I currently own a home in a north Chicago suburb, which I bought during the summer of 2004. Between then and now, my property taxes have risen by 82%...even though the house's value today stands at only 80% of what I originally paid for it. And the Illinois lawmakers figure that I am in the mood to see my property taxes climb even HIGHER? :rant::mad:

Can you afford to jettison that albatross?

eventually enough people like you will leave the state and put Illinois into a death spiral

I have family in that area, and want to keep in contact with them...otherwise it would already be sold.

Many states had their own pension plans prior to the implementation of Social Security. Those states were given the option of going to SSI or staying with their own pension plan. However, any quarter a worker was on a state pension and was not paying FICA would NOT count toward SS. So if you started with a state at 25 years old and worked 30 years, you would only have the state pension and no social security quarters for that time. Also since some states won't allow pension payouts before 65 (just like SS).

I'll mention two things. The system was developed by the state and anybody who wanted to work for the state paid into a pension plan but not SS. The workers are not to blame for that. They were given no choices. Workers and the state made a deal. Who is breaking the deal?

The workers have no retirement income except for the pension they earned unless they had 40 quarters of SS before or after their state service. They aren't even eligible for spousal benefits unless their pension is less than 1/2 of their spouse's pension (I believe). Even so, if you get 40 quarters, it is probably going to be at a lower-paying job and you'll get a small SS check.

In many states that are currently suffering pension problems, the state often failed to contribute their share (remember that employers pay into SS for each employee, same as state pensions). Sometimes the state just un-prioritized employee payments, sometimes the pension agency overestimated return on employee money and the state figured it didn't have to contribute that year. When that happens you have New Jersey's problem. The state didn't contribute for 13 or 14 years in a row and the pension fund was in the crapper.

Just so this point is clear as can be - in 1993 Christie Whitman, a Republican, did what Republicans do. She said if elected as NJ's governor, she would cut NJ state taxes by 30%. Whitman won and the state lost.

She pretended she could afford to cut state taxes by not funding the state employee pension plan. Other NJ governors followed Whitman's lead and today "the pension fund is in the crapper".

People like solid citizen Tom say tough shit for any state employee stuck in this irresponsible mess. Not his problem, says Tommy Boy.

I pity the poor SOB that gets Tommy in his foxhole. :rolleyes:

Well, we're talking about a situation in which the parties involved in creating the "agreements" knew full well they were soaking the system, and that the rates of return were unsustainable. And to rub salt in the eyes of privately employed taxpayers, they even had the gall to "guarantee" their benefits by amending the state constitution.

Since fraud was part of the original plans, it's my opinion that reducing or eliminating the benefits is an entirely lawful outcome.

I won't argue that there are workers who never fully understood the criminal aspect of it all, but I would argue that they have not legally "earned" anything.

You're absolutely correct to point out the parallels of private pension funds and Social Security. Benefit reductions and/or eliminations are on tap for all of us, IMHO, as the economy won't be able to support the enormous amount of debt, directly and indirectly obligated.