Pension Bailout Rejection – Hard to Feel Sorry for Chicago

The Chicago Tribune alerts subscribers that the Illinois Supreme Court refuses to approve Chicago pension bailout legislation.

The Chicago Tribune alerts subscribers that the Illinois Supreme Court refuses to approve Chicago pension bailout legislation.

Every time I see Chicago’s having financial problems I think of garbage collection.

One man collects recycling in Crystal Lake.

One man collects recycling in Crystal Lake.  He doesn’t have to get out of the truck on many stops.

I think of three men on a truck.

Then, I think of how garbage trucks in Crystal Lake have one man (except for picking up bags of leaves in the fall, when there are two).

Regular trash is picked up mechanically in Crystal Lake.

Sometimes the driver has to provide the mechanical arm assistance.

Sometimes the driver has to get out of the truck, but most of the time that’s just to turn the garbage contained around so the mechanical arm can lift it and dump its contents in the truck.

The 5-minute YouTube recording of a Chicago garbage truck crew at work shows that there is a mechanical arm, but a man has to bring the garbage container to the back of the truck and engage it.

This image from the YouTube video shows the two men on the street who load the garbage onto the truck.

This image from the YouTube video shows the two men on the street who load the garbage onto the truck.

The driver does nothing but drive the truck.

Two men walk behind it.

The reason for the three men on Chicago trucks is probably that two unions are involved–the Teamsters and the Laborers.

Another reason not to shed tears for Chicago taxpayers is that they pay so much less that those of us in McHenry County do.

The way to compare property taxes is to use effective tax rates.

That is computed by dividing one’s property tax bill by the value of one’s property.

Don’t know how I missed this Chicago Tribune article, but it has a graphic showing the average effective tax rates in the Chicago area:

Effective tax rates in the Chicago area, as calculated in November, 2015, by the Chicago Tribune.

Effective tax rates in the Chicago area, as calculated in November, 2015, by the Chicago Tribune.


Comments

Pension Bailout Rejection – Hard to Feel Sorry for Chicago — 16 Comments

  1. Nice anecdotal pictorial, Cal.

    Almost lifted my spirits for a moment there.

    Too bad it ends on such a sad note.

  2. Cook County has higher commercial and industrial property taxes, lower residential property taxes.

    Chicago’s long term fiscal sustainability is not good.

    Worse than most municipalities in Illinois.

    Too much bond debt, too much unfunded pension and retiree healthcare liabilities.

    They have been unwilling to freeze collective bargaining agreements, administrative wages, and pension and retiree healthcare benefit levels, to stabilize finances.

    Well eventually bond holders demand higher interest rates for new bond issues, which eventually hikes taxes.

    Eventually taxes and fees have to rise.

    They’ll push taxes and fees as high as they can until people start moving out.

    What a great way to run a government.

    Borrow and otherwise obligate the taxpayer with underfunded pension and retiree healthcare benefit hikes to underfunded pension and retiree healthcare systems, then figure out how to fund the bond repayments and benefit hikes.

    And we sit and wait to see how it will unfold.

  3. Or perhaps it is due to the speed that you can move in a urban environment not having to stop,the vehicle, get out and right the can…. Just saying.

  4. Now that “conservative” candidates who ran on “lowering taxes” have been successfully elected to McHenry County Board, residents can expect that 4% residential tax rate to trend substantially downward.

    It will be interesting to see which Board member(s) will take the lead on making the tough decisions.

    It is time for tax wathdogs like Andrew Gasser to step up to the plate and deliver on campaign his promise of lower taxation.

  5. And where is Jack Franks?

    France?

    A bastion of socialism?

    In 2011 Jack went to Cuba – I wonder what great ideas he brought back.

    Which candidate now running for State Representative or State Senate have you heard lately promoting an amendment to the State Constitution to remove the iron clad guarantee of public sector pensions along with the guaranteed minimum increase of three percent per year?

    We (the taxpayers) desperately need the state legislators to pass a resolution to hold a referendum on a Constitutional amendment removing the public sector guarantees!!

    The courts will continue to stop any changes to public pensions as long as the Constitution remains unchanged.

  6. Which candidate now running for State Representative or State Senate have you heard lately promoting an amendment to the State Constitution to remove the iron clad guarantee of public sector pensions along with the guaranteed minimum increase of three percent per year?

    You do know that changing the Constitution now would have ZERO impact on current people in the system, right? You do also know that the Constitution does NOT guarantee minimum increases of three percent per year, right?

    Also, I thought you conservatives were supposed to be strict Constitutionalists. I guess that’s only true when its convenient?

  7. alabamashake

    Are you in a panic in case you lose your pension?

  8. @alabamashake

    I’ve never known ANYONE who has ever claimed to be a strict constitutionalist wr to the Illinois Constitution.

    We’re already on our fourth constitution, and the state has never even pretended to follow most of it.

    The Illinois Supreme Court has ruled that the 3% COLA is protected by the pension clause of the Illinois Constitution.

    I think it’s a waste of time to try to fix the pension crisis by tinkering with the pension protection clause.

    The Illinois General Assembly needs to just continue to underfund the pensions and let them die on the vine.

    They then need to grow a backbone and stand up the the courts in the separation of powers fight that is sure to follow.

    The members of the Illinois General Assembly cannot be forced to answer to any tribunal for any of their official acts(or failures to act), and the courts do not have the power to raise taxes on their own.

    Let the unions fight over the scraps that remain.

  9. Are you in a panic in case you lose your pension?

    I don’t, and won’t, get a public sector pension, because I’ve never worked in the public sector.

    Valiant effort though.

    Also, if I did, I most definitely be in a panic, because you must not be paying attention.

    The State Supreme Court can’t be more clear.

    Pension benefits cannot be cut.

  10. The Illinois Supreme Court has ruled that the 3% COLA is protected…

    No.

    The SC ruled that promised benefits are protected.

    That doesn’t mean that they ruled a 3% COLA is protected, in the future.

    But for existing workers in Tier 1, yes, the 3% COLA is protected because it was a promised benefit.

    The Illinois General Assembly needs to just continue to underfund the pensions and let them die on the vine.

    Did you read today’s opinion?

    You clearly didn’t.

  11. “But for existing workers in Tier 1, yes, the 3% COLA is protected because it was a promised benefit.”

    That’s pretty much what I said.

    I don’t know what other 3% pension COLA you were thinking of.

    “The State Supreme Court can’t be more clear. Pension benefits cannot be cut.”

    You need to educate yourself on the concepts of Sovereign Immunity and the Separation of Powers.

    No matter how the Court rules, its ability to compel the General Assembly to do something it doesn’t want to do is quite limited.

    It is also important to remember that the General Assembly has the power the remove Supreme Court Justices from office if relations really go south.

  12. No matter how the Court rules, its ability to compel the General Assembly to do something it doesn’t want to do is quite limited.

    Oh? Maybe you missed how the state is funding services in this fiscal year. Are you aware that the state is largely operating based on consent decrees and court orders? Do you really think that the courts wouldn’t compel the state to made mandated pension payments?

    Again, read today’s opinion. It will help you understand the issue.

  13. It is also important to remember that the General Assembly has the power the remove Supreme Court Justices from office if relations really go south.

    Are you really advocating recalling SC justices who don’t agree with you? The pension clause in the constitution couldn’t be much clearer, and the SC (the Democrats AND the Republicans on the SC) has overwhelmingly upheld it each time its had the chance.

    So go ahead and recall SC justices. And replace them with other SC justices that are capable of reading very basic law. They’ll uphold the Constitution too.

  14. “Oh?

    Maybe you missed how the state is funding services in this fiscal year.

    Are you aware that the state is largely operating based on consent decrees and court orders?

    Do you really think that the courts wouldn’t compel the state to made mandated pension payments? “

    AFAIK, the consent decrees are with various federal courts and deal with programs like Medicaid which are shared responsibilities.

    I never implied that the State of Illinois could get away with blowing off the feds.

    IIRC, the Illinois court orders were mostly sought out by the Comptroller in order to give her some legal cover because she wanted to keep as much of the state government running as possible.

    Recall that the Mikey Madigan’s daughter and puppet originally said that no state workers could be paid in the absence of a budget.

    They were trying to shut things down in order to put pressure on Rauner to accept their bloated budget.

    “Again, read today’s opinion. It will help you understand the issue.”

    The real long-term issue is not what the law says, but what the Court can do to compel compliance from the State.

    The Court does not possess the same sort of leverage over the State that it has over the City of Chicago.

    It cannot force the General Assembly to raise taxes or force the Governor to sign a tax increase.

    About all it can do is try to order the Comptroller to turn over funds, but that would be of little use if the coffers are empty.

    The pension problem has festered for so long and has gotten so bad that there is no way that they will all be paid in full.

    The tax hit would simply be too devastating.

    The City of Chicago will eventually discharge some of its obligations in Bankruptcy Court.

    The State of Illinois will eventually tell the Illinois Supreme Court:

    “No mas.”

    “Are you really advocating recalling SC justices who don’t agree with you?

    “The pension clause in the constitution couldn’t be much clearer, and the SC (the Democrats AND the Republicans on the SC) has overwhelmingly upheld it each time its had the chance.“

    The pension clause is certainly not clear, because it does not state whether the “enforceable contractual relationship” is between the worker and his pension fund, or the worker and the State of Illinois.

    There is a good article on Steve Reick’s blog that covers this very subject.

    https://illinoyances.wordpress.com/2015/06/07/what-happens-if-our-pension-plans-go-broke/

    I would never advocate impeaching a SC Justice for ruling in a way that I disagreed with, but I would have no qualms whatsoever about impeaching a justice who tried to use unconstitutional means to enforce a judgment.

    Recall the probably apocryphal yet still wonderful story about Andrew Jackson, who allegedly said about a Supreme Court decision that he didn’t agree with:

    ”John Marshall has made his decision, now let him enforce it!”

  15. Recall that the Mikey Madigan’s daughter and puppet originally said that no state workers could be paid in the absence of a budget.

    Well, not sure if you read the OTHER opinion from the SC yesterday, but the opinion made it pretty clear that if such a case were to reach the SC, the SC would say that the state workers should not get paid without an appropriation.

    While I want the workers to get paid and don’t want a shutdown, the judges that have allowed payroll to continue have way overstepped their authority, and I believe that they are pretty blatantly violating the state constitution.

    what the Court can do to compel compliance from the State

    The SC may not be able to force the State to pas a tax increase, but they can force the state to make payments into the fund.

    The City of Chicago will eventually discharge some of its obligations in Bankruptcy Court.

    Municipalities cannot file for bankruptcy in IL.

  16. “The SC may not be able to force the State to pas a tax increase, but they can force the state to make payments into the fund.”

    If you don’t feel that judges have the authority to allow workers to be paid without a budget appropriation, why would they have the right to compel payments into the pension funds without an appropriation?

    Keeping vital workers on the job is certainly a far more pressing need.

    If the the Court ordered the Comptroller to release money into the pension funds without a budget appropriation, and she followed the letter of the law and refused, would you have her jailed?

    If she did decide to obey a court order and release money into the pension funds, where would it come from?

    We aren’t talking about change from behind the couch cushions money.

    “Municipalities cannot file for bankruptcy in IL.”

    It’s already OK under US law. If at some point in the future the State has a choice between bailing out Chicago or changing the law to allow it to file for bankruptcy, which do think they will choose?

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