Today’s numbers
Monday, Jan 13, 2014 - Posted by Rich Miller
* Crain’s…
In a post on its website the Civic Federation of Chicago says that, while sponsors of the bill estimated state taxpayers would have to contribute $1.2 billion less than previously required when the new [pension reform] law is fully implemented in 2016, the latest figures from Gov. Pat Quinn’s office come in more than a half-billion dollars short of that.
Specifically, the latest statements from pension fund actuaries indicate that “approximately $673 million” less in taxpayer funds will be needed in fiscal 2016, the report says. That’s more than $500 million short of the earlier estimated reduction of $1.2 billion.
In the report and in a statement, federation President Laurance Msall said some of that $500 million difference is due to improved investment returns by pension funds in the past year. With the stock market soaring, returns are up and therefore the amount of new money needed from taxpayers can be reduced.
But, even excluding that, the latest actuarial estimates in the Quinn report are $200 million different than the estimates offered by sponsors of the reform legislation, Mr. Msall said.
* Meanwhile, this argument sounds familiar to me…
Oh, yeah, now I remember.
It’s the same basic argument used by those who said legislators screwed up by not funding the pension systems, so pensioners should not be forced to solve the problem on their own.
Reboot and others argued forcefully against that logic. Regardless of past mistakes by the GA, pensioners should shoulder the burden.
- wordslinger - Monday, Jan 13, 14 @ 2:32 pm:
Gee, Reboot, who elected those lawmakers? Martians?
Under what theory of democracy do the people not take responsibility for their elected government?
Another victim heard from.
- PublicServant - Monday, Jan 13, 14 @ 2:36 pm:
The CTBA has proposed a progressive income tax where 94% of Illinoians will pay less income tax than they do today, so I’m assuming Reboot Illinois will get behind that. I’ll even write the preamble.
- Chicago Cynic - Monday, Jan 13, 14 @ 2:47 pm:
“Lawmakers made a wreck of #Illinois’ finances. We shouldn’t have to pay for it with higher taxes!”
What the heck does that mean? Yes, lawmakers spent too much without asking people to pay for it. But now someone has to pay for it. It sucks, but that’s reality.
If taxpayers shouldn’t pay for these public goods with taxpayer money, what are we supposed to do - shake the magic money tree and hope a few billion miraculously appears? Please spare us this mindless hyperbole.
- PublicServant - Monday, Jan 13, 14 @ 2:49 pm:
Or we could accept RNUG’s suggestion of a high flat tax rate and exempt the first 100K or so.
- the troop - Monday, Jan 13, 14 @ 2:52 pm:
It is unbelievable that everyone keeps talking about saving money for the “taxpayers”.State employees pay taxes just like everyone else.
I keep hearing this Msall guy with the civic federation.For what nefarious purpose does he have a dog in this fight anyway.
- Soccermom - Monday, Jan 13, 14 @ 2:56 pm:
What Word said.
- AnonymousOne - Monday, Jan 13, 14 @ 3:04 pm:
Well of course they shouldn’t have to pay for it- no one should. All public employees should work for free out of their sincere and unabiding dedication to……name your group of Illinois citizens.. And when they get too old, apparently they should just die so taxpayers (of which they are group members) don’t have to bother with them now that they’ve gotten what they need out of them and used them up. All snark.
- Rusty618 - Monday, Jan 13, 14 @ 3:14 pm:
Under the new pension plan, I will be out $212K in the first 20 years. So 2500 retirees at my rate (which is nothing to right home about) would make up the $500M…in 20 years.
- glaber - Monday, Jan 13, 14 @ 3:28 pm:
I don’t think that retirees would object to this bite being taken out of their pension so much, if it was going to be a real solution to the structural deficit of Illinois. It isn’t, because the deficit is too large and the savings from cutting the pension is too small. Let’s move on and talk about a real solution, a graduated tax rate.
- AnonymousOne - Monday, Jan 13, 14 @ 3:36 pm:
RE: saving money for the taxpayers
Public employees taxes apparently don’t matter, just like their services.
- Arthur Andersen - Monday, Jan 13, 14 @ 3:58 pm:
Let me be the first to say that by the time 2016 gets here, this “pension reform” will not save a dime.
Details to follow.
- Anon - Monday, Jan 13, 14 @ 4:21 pm:
If the Madigan pension bill is upheld, that will be the precedent to justify coming back to the same well again. After all, it would have been held constitutional to take it out of the hides of retirees and state workers.
- Rod - Monday, Jan 13, 14 @ 4:39 pm:
The reality of the savings really should be no major surprise to readers of this blog. I think we all discussed how savings in the pension reform proposal were largely back loaded, which is way all the talk of savings “over thirty years.” Really President Cullerton at one point, to his credit, discussed the more limited immediate savings. But the media did not pick up on those comments.
- DuPage - Monday, Jan 13, 14 @ 4:46 pm:
@3:04P.M. Reminds me of the old joke, “keep working till the day you die, just be sure to finish all the work for the day, then punch out and get off company property first.”
- Norseman - Monday, Jan 13, 14 @ 5:16 pm:
AA, you’ve got me on pins and needles waiting for those details.
- Norseman - Monday, Jan 13, 14 @ 5:25 pm:
Now that the legislature has taken them up on their desire to stick it to public employees and retirees. Who will be their next group to attack in order to prevent taxes from being raised because of poor financial management by the Governor and General Assembly? How about abused children? DCFS hasn’t been doing the greatest job with their limited money anyway. How about the mentally ill? The developmentally disabled? School children? Universities? Poor children? Road maintenance?
- OLD BRASS - Monday, Jan 13, 14 @ 6:32 pm:
“..How about abused children? DCFS hasn’t been doing the greatest job with their limited money anyway. How about the mentally ill? The developmentally disabled? School children? Universities? Poor children? Road maintenance?…”
Well of course, that’s where all the pension holiday funds were used in the first place. Someone (or fund) had to pay for all these things the GA had no money for in the budget.
- What is to be done? - Monday, Jan 13, 14 @ 6:52 pm:
I will argue that a lot people went into public service (teachers, police) and got paid very little in direct wages but had the promise of a decent retirement. We should not reneg on those promises.
- PolPal56 - Tuesday, Jan 14, 14 @ 11:52 am:
Reboot Illinois, IPI, the Trib and their ilk are going to blow gaskets when the ISC rule the pension theft unconstitutional and the GA goes for a tax structure change.
I, too, am intrigued by RNUG’s suggestion of a higher flat tax rate on income above a certain level, with incomes below that level exempt. It would be very hard on those at the cut-off, though. Imagine being someone who earns $103,000 and the cut-off is $100,000. Imagine that but for $3,000 you go from no state income taxes to 6%. I know that I would resent it. At the least there would have to be a loophole that no one can be taxed real dollars that would bring them below the $100,000 that is tax-free. Therefore, the person earning $103,000 would pay $3,000, not over $6,000.