If one is among those receiving money from Illinois state government oher than a retired employee, Wirepoints graphic of a state agency’s projections is sobering:
Pension Payments as a Percentage of Future State Budgets
If one is among those receiving money from Illinois state government oher than a retired employee, Wirepoints graphic of a state agency’s projections is sobering:
And you can thank the voters of this state who were led by the nose by State Legislators when the NEW Illinois State Constitution was voted on.
Lemmings and weasels?
You can thank Governor James Thompson for your perpetual 3% COLA, Cal.
How does an enterprise fund a defined benefit plan that allows individuals to retire at 100% of their ending wage? It doesn’t. It dies.
They want to tax everyone and everything
https://wgntv.com/2019/05/17/pritzker-unveils-41-5b-infrastructure-plan-that-includes-tax-increases/
And the Great Exodus From Illinois shall continue unabated until
the state collapses and all assets become worth less than the
taxes which are paid on them.
In the context of a property I just sold there in April.
It’s far worse than you think.
Read this and say weep:
Illinois has its eyes on your pocketbook, again. This time: gas taxes, registration fees, Netflex, and Uber.
The Illinois Policy Institute reports Gov. J.B. Pritzker’s office is using a major capital bill as a vehicle to grease lawmakers for a progressive income tax amendment. But the tax hikes to pay for it would make Illinoisans’ gas tax burden the second highest in the nation.
https://moneymaven.io/mishtalk/economics/illinois-governor-wants-to-hike-taxes-what-else-isn-t-news-zlCJd1akBUi1QB3cN4RCZw/
Love-ass is right about closet case Jim Thompson.
And GOP Gov. Ogilvie fought for a state income tax in Illinois.
These two RINO rats (and many others, like Georgie Ryan, Ryan, Lee Daniels,etc., etc.) show that the Establishment GOP in Illinois is also responsible for the rotten fiscal mess.
I mean to add Raunchy Rauner in above listing — not Ryan twice.
Pension Pigs in Illinois. They are greedy and fat, and expect us to slave for them. Kathy Schultz was one of the very worst. She’s the ex-clerk of so many fake McHenry County ‘elections.’
She laughed at me when I called her out for her many scandals and improprieties. She said, “But I’ll have a nice pension when I get done.” In that she was correct!
The percentage of the State of Illinois budget going to State pensions would be 50% using the method proposed by Michael Cembalest of JPMorgan Chase.
Mr. Cembalest’s method results in 100% funding after 30 years of level payments assuming a 6% return on pension fund investments.
The 6% assumed return on investments is more technically called the discount rate.
Compare that to the State of Illinois which uses a higher assumed return on investments, 90% rather than 100% funding, and has increasing (not level) annual payments from the State to the pension fund.
Mr. Cembalest’s use of the word level is akin to a fixed rate mortgage.
That was reported on this blog as follows.
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McHenry County Blog
The Pension Black Holes
April 15, 2019
mchenrycountyblog.com/2019/04/15/the-pension-black-holes
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To recap, the discrepancy between the State of Illinois vs Michael Cembalest calculations is in large point due to:
– amortization method (increasing annual payments vs flat annual payments)
– discount rate (higher assumed interest rate vs lower assumed interest rate)
– the end result is 90% funded vs 100% funded.
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A pension should use safe, conservative, consistent, and predictable practices.
The State of Illinois did the opposite for the entire history of the pensions, escalating after the pension sentence was added to the state constitution in 1970.
The pension sentence has been a curse which emboldened bad practices by the State, as the narrative was regardless what is done to the pensions, the benefits cannot be diminished or impaired.
So let’s have our cake and eat it too.
Let’s have salary and benefit hikes now, and big pensions later.
Party on.
The Illinois Pension Scam.
But rather than admit the various games that were played and cut pensions a reasonable amount, the unions in particular and non union members as well have fought sensible reforms.
As with any debt the earlier changes are made, the less painful the changes.
The frequency of changes, types of changes, and financial condition of the pension funds at the times the changes were made, was ridiculous in the Illinois General Assembly.
The State Representatives, State Senators, and Governors do not change laws in a vacuum.
They are pressured by lobbyists and special interest groups such as union members.
While the politicians and unions are the primary culprits in this mess, there is plenty more to the story.
And it was Democrats and Republicans who changed Illinois pension laws and made other bad decisions.
Other states changed their pension laws too, but Illinois was ridiculous.
If there was one person to place primary blame it would be Michael Madigan.
He was first elected to the Illinois General Assembly in 1970, taking office in 1971.
49 years in office.
January 2021 will be his 50 year anniversary as a State Representative.
He did not act in isolation, but has not explained to the taxpayers in a comprehensive easy to understand fashion all the changes that have been made in the Illinois General Assembly to pension hiking laws, and budget legislation that contained salary hikes, while he has been in office.
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The politicians and unions love to say the pension unfunded liability is primarily due to the state not making its full annual payment.
Think.
What happens before determining a payment amount?
An action precedes the payment amount.
In the case of the State annual payment to the pension funds, there are several actions over a period of time including:
1. Salary hikes
2. Pension benefit hikes.
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The salaries and benefits were repeatedly hiked, even though the pensions were underfunded.
That’s the primary problem.
Exasperating that problem was a host of decisions by the General Assembly regarding the state annual contribution to the state pension funds:
– holidays (shorting or skipping the annual payment from the state to the pension funds)
– re amortizing game 1 (trading lower payments now to the pension fund, for higher payments later to the pension fund)
– re amortizing game 2 (move the target date into the future of when the pensions would reach the percent funded target)
– re amortizing game 3 (having a 90% funded target instead of a 100% funded target).
There was never a responsible 100% funding plan for state pensions.
This is a scam.
Abe, when you leaving?
You sound— dare I say?– Triggered?
Joe Kvidera, the only ones triggered are the “DEMONCRATS” like yourself!
The People can blame “Demoncrats” like you for promoting Lauren Underwood!
Yep!
Joe Kvidera helped sell a boatful of lies to the people!
Lauren Underwood is a faker, could she be a taker?
Joe? Abe is probably leaving in the rapture like the rest of us that are bright.
President Obama during his first term was for putting a cap on CEO and Executive pay in the PRIVATE sector. It seems that it would be prudent to put a cap on annual pension payments to those in the PUBLIC sector, government retirees.
The PBGC (pbgc.gov) covers workers’ pensions in the private sector and currently the top payout for a pensioner whose company goes bankrupt and the pension fund is not-solvent is about $58,000 per year.
Similarly in Illinois, having the worst bond fund rating of all 50 U.S. States, and easily on the verge of bankruptcy, there should be measures to do a PBGC type solution for Illinois government employees’s regarding their pensions.
Cities in the U.S. have declared bankruptcy in the past. It is now time for the worst State of the U.S. to start bankruptcy proceedings, do restructuring including solving the pension crisis.
If they tax idiocy, Joe and Dentblah would be driven to bankruptcy.
**It is now time for the worst State of the U.S. to start bankruptcy proceedings, do restructuring including solving the pension crisis.**
It is not legally possible for a state to declare bankruptcy.
What is your next solution?
Big deal. Change the law so that States of the U.S. can legally file for bankruptcy.
My next solution is to continue to under fund the pensions.
Let them go broke, and we’ll find out if the state courts have the power to force the General Assembly to fund them.
The courts could order the comptroller to cut checks, but that is a rather hollow threat if there is no money in the general fund.
Such an order would also create a serious separation of powers issue.
Under the Illinois Constitution, the courts do not have the authority to raise taxes on their own, and they cant compel the GA to do so.
Illinois is the poster child for states with critically underfunded pensions, but it is far from alone.
My guess is that the feds will eventually step in and either change the bankruptcy laws or create something like the Pension Benefit Guaranty Corporation for troubled state and local pension plans.
One way or another, there will be large haircuts.