A press release from State Rep. David McSweeney:
McSweeney Says Supreme Court Pension Decision Means Opposition to Cost Shift Needed More Than Ever
Cary, IL… In response to the Illinois Supreme Court’s decision to strike down the state’s pension reform legislation, State Rep. David McSweeney (R-Barrington Hills) says he is renewing his efforts to pass a resolution opposing ongoing attempts to shift education pension costs to local schools.
David McSweeney speaks to Algonquin Township Republicans.
“I believe the recent ruling from the Supreme Court is likely going to trigger aggressive efforts to shift billions of dollars of education pension costs onto local schools,” McSweeney said.
“If these efforts are successful, we would see a massive increase in property taxes and local education cuts.
“We cannot afford an additional increase in property taxes. This is why I’m taking a strong stand to protect taxpayers by opposing cost shift legislation.”
Opposition to the cost shift is bipartisan as 50 legislators from both parties and from all across the state have signed onto House Resolution 187 as sponsors.
“Lawmakers from both sides of the aisle are supporting my resolution because they recognize the tremendous harm a pension cost shift would do to local schools,” McSweeney continued.
“Shifting billions of dollars of pension obligations to our local schools would essentially create an unfunded mandate that our local schools cannot afford. Illinois already has the second highest property taxes in the country.
“We simply cannot afford to see our property taxes increase any more.”
Lack of funding in the past is one issue, but all funding in the future should come from total comp.
Yes property taxes.
That doesn’t mean raise taxes, that means adjustments in total comp.
More to pension fund less in payroll check.
Really illustrates what’s wrong with our political process.
Everyone is trying to weasel their way out of things and have other people pay for them.
The “point the finger” game.
Not my problem, someone else should do it.
This whole house of cards is going to crash without a constitutional amendment, and how is that going to happen when Democrats have super majorities in both legislatures and are beholden to unions?
This state just managed to get the honor of being the worst state for taxpayers to live in, have the largest budget deficit, and have the least funded pension system.
Think about that for a second.
It’s no surprise we’re number 1 in people leaving this state.
This state is disastrously malfunctional.
I would suggest that the opposite is what got us into this mess.
Teacher union lobbyists asked that pension funding be short-changed in order to provide more money for salaries through State Aid to Education.
There we were, now here we are.
What are we legally allowed to do about it?
Only this: stop hiring, fire to the extent legally allowed, and direct all financial resources toward fulfillment of all legal entitlements to retired and current employees.
Future employees should only exist when cradle-to-grave pension funding (required by law) is legally ensured.
If this offends current individuals, they may only direct anger toward those recipients of legal entitlement who are absorbing all current resources.
Then, those recipients may decide if it is in their own best interests to allow change of definition of legal entitlements.
Make ALL public education funding local.
Get rid of those employees who work to get ALL the government grants.
Stop taking federal tax dollars and get rid of the unfunded mandates!
Make public sector work stoppages illegal – stop the practice of holding our children as hostages!!
Get rid of the Regional office of Superintendent.
Get rid of bilingual education!
Quit turning our schools into babysitting services!
Re “Babysitting Services”:
Woodstock D200 is the only local school District I could find which inflates its stated enrollment numbers to include Pre-K.
Pre-K can be obtained at about $2200 per school year per student from Montessori, and that is the tuition charged by D200.
However, when those several hundred Pre-K students are blended into general enrollment population figures, they serve to lower the (legally obligated public disclosure) “annual cost-per-pupil” dollar amount.
The annual cost per pupil of $15,000 per year per student would be higher if actual costs per year were divided by the lower number of students commanding the higher fulfillment costs of K-12 (NOT PRE-K-12) students.
Also, ‘predicted enrollment’ factors into legal entitlement to borrowing and bond issuance.
So the accuracy of these numbers becomes highly significant, in that this school district has been able to borrow such that the debt is h now $150 million dollars, which amounts to 21% of District EAV. Statutory borrowing caps are supposed to limit borrowing to 13.8% of EAV.
(Subjectively inflated enrolment figures is only one factor which enabled D200 to borrow so much in excess of statutory borrowing limits.
(The board borrowed the money at times when the EAV was known to be plummeting, but since EAV is calculated after the fact, technically they were not in violation of caps.
(Also, there are several loopholes in borrowing caps, including ‘fire and safety bonds’.
(Private citizens are not in a position to verify whether the millions borrowed in past decade were spent within the letter or spirit of the law limiting such borrowing.
(Private citizens only know that the District taxes 2.7% of property value, which in itself is nearly double the national average TOTAL property tax rate which includes schools and all other taxing bodies to which homeowners must pay.)
Is it Willful Negligence–an unreasonable act in disregard of a known risk—when Board Members agree to new hires with the certain knowledge that the legal pension entitlement (and maybe even current salaries, given PTELL and mandatory COLA raises) cannot be funded?
Isn’t personal immunity from liability pierced in cases of willful negligence?
Repeal the pension sentence added to the constitution and progressively claw back pension and retiree healthcare benefit hikes including those already accrued.
That is a fair solution.
The salary and benefit hikes were not negotiated in good faith.
There was not proper notification to taxpayers funding the salary and benefit hikes.
The taxpayers were never notified, so how could they agree?
Those at the top should suffer the biggest claw backs.
Those are the top are supposed to be leaders with all their fancy degrees and credentials, supposedly we were paying them a lot of money for a good reason, but they failed us.
The Governors were a failure.
The majority of the General Assembly was and is a failure.
The majority of the State Representatives, State Senators, and the past Governors did not represent the majority in the private sector.
The people were deceived by the politicians.
The politicians were tricky and sneaky.
There were few pension watchdogs, Jack Roeser, Bill Zettler, a few others, and they were largely ignored by the majority of the media, and discredited by the power brokers.
Surely if it was as bad as they were saying, more people would be saying it, right?
The collective bargaining agreements and administrator contracts deserve a lot of blame also, their role was in hiking salaries and current benefits, the salaries which hiked pensions.
Not to mention cashing out 340 days of accumulated sick days at ending salary or swapping some or all for years of service credit, amongst the many games that vary by district and agreement.
The public sector unions and employees and politicians have been very effective at playing the political game to obtain taxpayer money.
Do not trust them.
Too many trusted them and look what happened.
And now we have public schools jacking up pre-k enrollment which will 1) jack up pensions which we cannot afford (more teachers mean more pensions) and 2) increase borrowing limits so the schools can issue more bonds which taxpayers cannot afford.
And those preschool teachers will be on the same pay rate (collective bargaining salary schedule that not many look at) as high school physics teachers in unit and high school districts, and 8th grade advance placement math teachers in elementary school districts.
Our government is broke and broken, deceptive and tricky, sneaky and self serving.
Where is one single public sector worker who highlighted that pension and retiree healthcare benefits were hiked via the legislative process to UNDERFUNDED pensions and retiree healthcare funds AND that escalated starting in 1971 (compare 1971 pension and retiree healthcare benefit levels to 2015 benefit levels); and that pension funding was diverted to State Aid for Education to hike salaries (which hikes pensions), amongst other transgressions.
None of that was done by millionaires and billionaires, other than any politicians who happened to also be millionaires.
Obama was in on the game though.
He was a State Senator during that timeframe so he was part of the legislative pension and retiree healthcare benefit hiking spree.
Has anyone ever heard of Barack Obama exposing the malfeasance?
He of all people should own up to what occurred.
The President of the United States deceived us about pensions and retiree healthcare when he was a State Senator by not exposing the whole truth?
But there is plenty of blame for Republicans including Republican Governors Jim Edgar, George Ryan, and Jim Thompson.
So while plenty of taxpayers have underfunded 401K’s they would like to contribute to more, instead their money is going via taxes to hiked public sector pensions and retiree healthcare.
Social Security is not guaranteed in the US Constitution to no be diminished or impaired, so private sector taxpayers in 401K’s are at risk for a double whammy, 401K’s that can lose value and Social Security benefits that can be reduced.
The hiked pensions and retiree healthcare are the price to pay for trusting politicians and public sector unions, amongst others, in Illinois.
The Springfield Sausage Factory.
The State & Local Collective Bargaining Sausage Factory.
There are to this very day no clear labeling laws to changes made to pensions, retiree healthcare, and collective bargaining agreements.
These people are nasty and self-serving, nowhere close to being public servants.
Every time I think of how a local political problem can be solved, I now ask myself “what would the Swiss do”?
The Swiss do America better than America does America.
For instance:
1. Guns are legal, and every Swiss male has one at home, he must gets regular training with it.
2. Education is very diverse, there is not attempt to have something like “common core”.
3. K-12 education is financed locally by “cantons” (not by the Swiss federal government. Funding comes from multiple sources, including income, real estate, and “net worth” wealth taxes. Real estate taxes are less than 0.3%. In one of the most expensive countries in the world, yearly per student cost is less than $15K (less than Woodstock apparently).
4. A more practical approach to funding of public projects: Take school buses: before, between, and after they transport students, Swiss school buses deliver mail, and serve as public transit. The school buses do not just sit in some parking lot during the day.
5. Referendums are binding. No 9th circuit court to overturn the popular will.
I would not bother “asking” the retiree and retiring educators to consider restructuring their benefits.
They were promised a deal, while very rich and not fiscally sound for the taxpayer, and expect it to be honored.
Yes, they gladly beat the drum, helped politicians manipulate the elections and pulled on the heartstrings of the voter by positioning educational investment in the future, then lined up the to reap the benefits.
Now when it’s time to help “society,” it will not be on their dime.
And….. a bunch of them already have their retirement/second careers lined up in a low tax states where they will not even have to pay the inflated taxes that their retirement is driving.
It’d be a neat thought to take out IL state income tax from state pensions regardless of where they live.
Not nearly enough to solve anything, but the optics of such an exercise would be beneficial.
All of the “steps” will be followed to appease “the people” but there is only one solution, and it’s going to hurt:
Bankrupt the state. Become insolvent and walk away from the obligations. Then rebuild with something that is based on sound fiscal responsibility.
This will either happen by driving taxes through the roof (even higher than they are now) and make the current exodus seem inconsequential.
Follow the process and continue to ratchet up the tax rates as “the payers” flee.
The will result in long-term damage that we may not recover from (Detroit is still trying to rise from the embers.)
Or….refuse to raise taxes and become insolvent quickly – pull the band aid and get to repairing sooner.
At least the “tax payers” may not leave as quickly and even stick it out and keep the revenue flow in the state.
It’ll be ugly and the folks that drive this solution will be vilified and cursed for decades, but the recovery would be quicker.
Move the pension costs to local school districts and maybe, just maybe, we will get better candidates to run for the school boards and get more people out to vote in school board elections.
I guarantee one thing, it would improve voter turnout a lot more than early voting or same day registration!!!
Having the state fund pensions with taxpayer dollars moves it too far out of the local spotlight!!
Nothing like local taxpayers seeing what they actually pay for teacher pensions!!!
It looks like there will be a tax hike.
Rauner seems to say so as well.
The question is which tax will be hiked….
Property taxes already make us home owners feel like we are paying rent to live in our own homes.
Property tax is a tax on accumulated wealth – but not really.
Even if you have zero accumulated wealth, even if you do not own any equity in your home, you are liable for property taxes.
I wonder how those citizens feel who have no equity in their home, yet must pay already high property tax, and are now looking forward to even more taxation of nonexistent wealth.
There is plenty of wealth in Chicago and in this state, for sure, but I wounder whether it would be politically feasible to tax financial wealth, as opposed to already stripped home owners.
I wonder what Mr Rauner would think about this idea.
Woodstock tax rates are 4.7% of total home value.
Most areas in Chicago have tax rates below 2% of total home value.
Their real estate values have held up better as a result.
They haven’t begun to sufficiently suffer, and express no urgency about spending reform.
When Chicago real estate values begin to plummet as here, as a function of high property tax rates, Chicago may press for different public spending policies.