FED Guys Call for New 1% Real Estate Tax to Pare Down State Pension Debt

A press release from State Rep. Allen Skillicorn:


Springfield, IL – Fresh off reports of a recent proposal by three economists of the Federal Reserve Bank of Chicago recommending a 1% property tax levy on the actual value of all Illinois homes to pay for state pensions, I am introducing a resolution in the House calling for an audit of the Federal Reserve System.

Allen Skillicorn

Enough is enough!

Despite having some of the highest property taxes in the nation, the Chicago Fed has the audacity to recommend a massive property tax hike to pay for Illinois’ unsustainable pensions on the backs of middle class taxpayers who are already taxed enough.

I am calling on my colleagues to co-sponsor the Illinois resolution in support of U. S. Congressional H.R. 24, the Federal Reserve Transparency Act of 2017.

Currently the U.S. Government Accountability Office (GAO) is prohibited by law from auditing four areas of the Federal Reserve:

  • Transactions for or with a foreign central bank, government of a foreign country, or no private international financing organization;
  • Deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
  • Transactions made under the direction of the Federal Open Market Committee; or
  • A part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System.

The “Audit the Fed” bill would remove these four exemptions and is supported by nearly 75 percent of the American people.

The economic trio of the Chicago Fed offer three options as their only solution—increase sales taxes, income taxes or property taxes.

How about three of my own:

  1. restructure government spending;
  2. amend the Illinois Constitution to end the pension protection scheme; or
  3. have government employees contribute more to their retirement–no economics degree required.

It is beyond ironic that as a part of the Federal Reserve—a major contributor to the circumstances that caused the Great Recession by keeping interest rates too low for too long, along with crushing those on fixed incomes and savers with Zero Interest Rate Policy for a decade–the Chicago Fed looks to Illinois homeowners to once again bail out reckless government spending. Time to Audit the Fed!

Links from above:

Federal Reserve Bank of Chicago: How Should the State of Illinois Pay for its Unfunded Pension Liability? The Case for a Statewide Residential Property Tax


FED Guys Call for New 1% Real Estate Tax to Pare Down State Pension Debt — 14 Comments

  1. Thank God someone has come up with a plan to pay all these grossly underfunded pensions.

    You can’t expect people like Angel to have their pensions limited to the funds available, that would be terrible.

  2. They are correct, but it should apply to Chicago public school districts’ (CPS) real estate taxpayers alone.

    CPS is unique in receiving special carveouts of State Funding.

    Unique too is CPS ability to issue alternate revenue bonds, which they have been using to fund operational  spending.

    Chicago property tax rates are 1%-2.5% lower than collar county as a resul.
    politicians have control of CPS cook county rates by controlling levy amount ( shifting funding burden to bond debt).

    As a result, Chicago property values have skyrocketed relative to collar county values.

    Therefore the solution should be 1.5% tax rate ‘special service area’ which includes only CPS property.

    Governor Pritzker might not like this with his extensive Chicago real estate holdings.

    However, it may not affect him, as he has obtained special reduced assessments on many of his 
    properties using the law firms affiliated with Madigan and which have donated heavily to assessor’s
    campaign and Democratic Party, whose Chairman was until 2018 the Chief Assessor of Cook County .

  3. With over 1/3 of CPS real estate in TIF districts, the EAV of taxable property funding CPS is artificially low.

    If these TIFs were dissolved, it would significantly alleviate CPS funding crisis

  4. See a DEMOCRAT, thank a DEMOCRAT – for chasing property owners and businesses out of Illinois
    in record numbers year after year and driving already overtaxed families even deeper into debt.

    Citizens who own property in Illinois are little more than political prisoners of the insatiable
    power mad DEMOCRATS who do not care if they destroy you as long as they remain in total control of the state.

    This is soft fascism as practiced by Illinois DEMOCRATS.

  5. Go to Better Government Association data base on Illinois state pensions and see the outrageous yearly pension amounts of retired government workers. See how many retirees are getting pensions in the ranges of $500,000, $400,000, $300,000, $200,000, $100,000 per year. Keep in mind that these yearly pension amounts increase each year with the COLA.

    This is in no way sustainable. Absent a change in the Constitution to abolish the clause on pensions, the only alternative for Illinois is bankruptcy. Then, whatever is left in the pension funds can be doled out on a more sane and rational level. A level more in line with what retirees in the private sector are paid, that is if they even had pensions from the places that they worked.

  6. Springfield legislators could propose bills to actually solve the problem:

    1. Require accrued/deferred interest debt to be factored into tlschool districts’ statutory debt limits,
    And require full debt amount be disclosed to taxpayers on Clerks website tax page

    2. Reform or abolish the political slushfund-for-cronies mechanism known as TIF.

    3. Require a SSA 1.5% property tax on Cook County properties within CPS taxing districts.

  7. The reason Chicago keeps these sociopath humanoids in power is that Chicago real estate has not been crushed in value as have collar counties.
    Chicago is enjoying terrific property value appreciation as a result of its artificially low property tax rate.

    Force Chicago to pay for tax levies reflecting true amounts of spending and we may see different political policies emerge.

  8. What are the names of the 3 economists who proposed the absurd 1 Percent tax on home value? A yearly tax until the pension funds are at 100 percent funded? Do these “economists” really understand economy? Do they understand the extra burden that would be placed on working families with modest incomes and homes valued at say $200,000? The monthly cost to them would be about $165 per month.

    Imagine a working family of four with that $200,000 home and a yearly income of 50K or 60K having to write a monthly check of $165 or an annual check for $2000. And for what? To help finance the lavish pensions of retired teachers, administrators and other government workers? Yearly pensions in the ranges of $500K, $400K, $300K, $200K, $100K.

    Looking for all politicians, especially liberals and Democrats, to step forward and state their support for economic justice for lower and middle income homeowners and retirees on modest fixed incomes who are not getting lavish government pensions. Justice being scrapping of this idea of a 1 percent on homeowners. More justice in terms of scrapping the pension clause in the Illinois Constitution.

    For reference, Illinois State spends $13.7 Billion on pensions which is 23 percent of all spending.

  9. #1 The greatest period of economic growth in U.S. history was when there was no central bank.

    #2 The United States never had a persistent, ongoing problem with inflation until the Federal Reserve was created. In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent. In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent, and it would be even higher than that if the inflation numbers were not being so grossly manipulated.

    #3 Even using the official numbers, the value of the U.S. dollar has declined by more than 95 percent since the Federal Reserve was created nearly 100 years ago.

    #4 The secret November 1910 gathering at Jekyll Island, Georgia during which the plan for the Federal Reserve was hatched was attended by U.S. Senator Nelson W. Aldrich, Assistant Secretary of the Treasury Department A.P. Andrews and a whole host of representatives from the upper crust of the Wall Street banking establishment.

    #5 In 1913, Congress was promised that if the Federal Reserve Act was passed that it would eliminate the business cycle.

    #6 The following comes directly from the Fed’s official mission statement: “To provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.”

    #7 It was not an accident that a permanent income tax was also introduced the same year when the Federal Reserve system was established. The whole idea was to transfer wealth from our pockets to the federal government and from the federal government to the bankers.

    #8 Within 20 years of the creation of the Federal Reserve, the U.S. economy was plunged into the Great Depression.

    #9 If you can believe it, there have been 10 different economic recessions since 1950. The Federal Reserve created the “dotcom bubble”, the Federal Reserve created the “housing bubble” and now it has created the largest bond bubble in the history of the planet.

    #10 According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret loans to the big banks during the last financial crisis. The following is a list of loan recipients that was taken directly from page 131 of the report…

    Citigroup – $2.513 trillion
    Morgan Stanley – $2.041 trillion
    Merrill Lynch – $1.949 trillion
    Bank of America – $1.344 trillion
    Barclays PLC – $868 billion
    Bear Sterns – $853 billion
    Goldman Sachs – $814 billion
    Royal Bank of Scotland – $541 billion
    JP Morgan Chase – $391 billion
    Deutsche Bank – $354 billion
    UBS – $287 billion
    Credit Suisse – $262 billion
    Lehman Brothers – $183 billion
    Bank of Scotland – $181 billion
    BNP Paribas – $175 billion
    Wells Fargo – $159 billion
    Dexia – $159 billion
    Wachovia – $142 billion
    Dresdner Bank – $135 billion
    Societe Generale – $124 billion
    “All Other Borrowers” – $2.639 trillion

    #11 The Federal Reserve also paid those big banks $659.4 million in fees to help “administer” those secret loans.

    #12 The Federal Reserve has created approximately 2.75 trillion dollars out of thin air and injected it into the financial system over the past five years. This has allowed the stock market to soar to unprecedented heights, but it has also caused our financial system to become extremely unstable.

    #13 We were told that the purpose of quantitative easing is to help “stimulate the economy”, but today the Federal Reserve is actually paying the big banks not to lend out 1.8 trillion dollars in “excess reserves” that they have parked at the Fed.

    #14 Quantitative easing overwhelming benefits those that own stocks and other financial investments. In other words, quantitative easing overwhelmingly favors the very wealthy. Even Barack Obama has admitted that 95 percent of the income gains since he has been president have gone to the top one percent of income earners.

    #15 The gap between the top one percent and the rest of the country is now the greatest that it has been since the 1920s.

    #16 The Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.

    #17 The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.

    #18 The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.

    #19 The Federal Reserve system greatly favors the biggest banks. Back in 1970, the five largest U.S. banks held 17 percent of all U.S. banking industry assets. Today, the five largest U.S. banks hold 52 percent of all U.S. banking industry assets.

    #20 The Federal Reserve is supposed to “regulate” the big banks, but it has done nothing to stop a 441 trillion dollar interest rate derivatives bubble from inflating which could absolutely devastate our entire financial system.

    #21 The Federal Reserve was designed to be a perpetual debt machine. The bankers that designed it intended to trap the U.S. government in a perpetual debt spiral from which it could never possibly escape. Since the Federal Reserve was established nearly 100 years ago, the U.S. national debt has gotten more than 5000 times larger.

    #22 The U.S. government will spend more than 400 billion dollars just on interest on the national debt this year.

    #23 If the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.

    #24 According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So exactly why is the Federal Reserve doing it?

    #25 There are plenty of possible alternative financial systems, but at this point all 187 nations that belong to the IMF have a central bank. Are we supposed to believe that this is just some sort of a bizarre coincidence?

    Read More: http://www.trueactivist.com/25-fast-facts-about-the-federal-reserve/

  10. We’ll never be able to force a cram down if the State comes up with massive new funding sources in the absence of real reform.

    I think the PBGC tops out at about $65k/year for the highest earners who start drawing at age 65.

    That might be in the ballpark of what the State can afford.

  11. Perhaps these state pensions should be paid out at the present funding level plus 15 percent if less than 85 percent funded.

    So, if a current pension fund is 40 percent funded, retirees would receive 55 percent of what they should until this mess is fixed.

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