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* The Tribune editorial page reacts to today’s pension ruling…
Expect to hear politicians or advocacy groups or finance experts float notions you’ve never heard in Illinois. That to preserve money for pension costs, the state workforce may have to be drastically reduced, that work contracted to private firms that don’t have to provide such benefits. That as the cost of retirement benefits continues to skyrocket, more of the cost must be placed on the workers who will reap those benefits. That’s not to blame the workers; that’s to recognize brutal reality.
You won’t hear these and other dramatic thoughts only about state government: Friday’s ruling vastly complicates life for Chicago Mayor Rahm Emanuel, Cook County Board President Toni Preckwinkle and thousands of other local officials. They prayed that the court would uphold state attempts to curtail retiree benefits, or at least explain how future laws might be written to meet constitutional constraints. Friday’s decision offered neither. Maybe Emanuel et al. can offer the court more compelling arguments: Unlike the state, cutting benefits really is our last resort. But after Friday’s ruling, they’re running uphill.
So the huge enterprise of government in Illinois now confronts a challenge unlike any it has known: The new taxation necessary to satisfy all of these state and local pension demands would make this a ghost state.
A ghost state? C’mon, man.
Raising the state income tax back up to close to where it was before January 1st wouldn’t make this a “ghost state,” but it would prevent draconian budget cuts that would devastate this state. The Tribune blindly refuses to admit this because it hates that tax hike so very much.
Sometimes, you gotta find more income to pay your bills.
…Adding… From Wordslinger in comments…
–…a challenge unlike any it has known.–
Yeah, that Civil War, race riots, labor wars, polio, Depression, WWII, segregation, etc., it was all a stone-cold groove compared to today’s insurmountable and unprecedented problem of paying back borrowed money.
Embarrassing, hysterical, narcissistic navel-gazing.
Seiously, they’re demented, should not be operating motor vehicles.
…Adding More… Gov. Bruce Rauner’s magical mystery pension reform plan which he adamantly refuses to unveil would allegedly save the state about $2.2 billion next fiscal year. While there is little doubt that we are staring into perhaps the worst fiscal crisis since the Great Depression as a result of the loss of the income tax hike money and gross Democratic mismanagement, losing out on those pension savings is hardly a crisis outweighing everything in the state’s history. The Tribune editorial board members probably ought to take a nap.
…Adding Still More… From Archpundit in comments…
===They prayed that the court would uphold state attempts to curtail retiree benefits, or at least explain how future laws might be written to meet constitutional constraints. Friday’s decision offered neither.===
Actually I believe Rich highlighted the road map the court gave on just this point. The ed board really is just lazy.
Yep on both counts. The road map is here.
* CNBC looks at the Chicago tax angle…
“Detroit offers such a strong example of default and bankruptcy that Chicago ends up being impugned by comparison,” said Matt Fabian, a partner at Municipal Market Analytics.
The broader economic and demographic positions of the two cities are vastly different. Chicago is the third-largest city in the country, with a vibrant economy and large, taxable population. Detroit had been suffering from a population exodus for decades, along with a crippled economy after much of the auto industry moved out.
“A property tax increase could solve Chicago’s problems tomorrow,” Fabian said. “But the city has chosen not to do that, even though it has the potential.” Chicago could raise taxes by 50 percent and still have lower taxes than New Jersey, he said. […]
That option, he said, was not available in Detroit, which is why the city eventually filed for Chapter 9. “It is very hard to see Illinois ever approving Chapter 9,” Fabian said. “Chicago is the heart of the state, and it is in no one’s interest to fall into bankruptcy.”
Detroit, on the other hand, was a drag on the state of Michigan and bore the brunt of much antipathy, said Fabian.
posted by Rich Miller
Friday, May 8, 15 @ 2:59 pm
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A bankrupted newspaper has no business “educating” us on state finances.
Comment by Ducky LaMoore Friday, May 8, 15 @ 3:05 pm
Earlier, the Tribune web story on the ruling had the same bill signing picture you ran. Now, they’ve zoomed in on Quinn, and cut the others out of the picture. I wonder why?
Comment by Anonymous Friday, May 8, 15 @ 3:07 pm
There go the garbage merchants again!
Comment by Arthur Andersen Friday, May 8, 15 @ 3:08 pm
===
That option, he said, was not available in Detroit, which is why the city eventually filed for Chapter 9. “It is very hard to see Illinois ever approving Chapter 9,” Fabian said. “Chicago is the heart of the state, and it is in no one’s interest to fall into bankruptcy.”
Detroit, on the other hand, was a drag on the state of Michigan and bore the brunt of much antipathy, said Fabian.===
This.
@FakeStatehouseChick - I’ll keep it “simple” - Detroit, Rauner, and Madigan’s fault. It’s not as tough selling out as I thought #Paycheck
Comment by Oswego Willy Friday, May 8, 15 @ 3:09 pm
Why don’t we get rid of some of the bills, Mr. Deep Pockets? Pay all the tax you wanna, big boy. Leave my hard-earned money alone.
Comment by Neglected stepchild Friday, May 8, 15 @ 3:10 pm
As I recall, a 5% state income tax rate still has us lower than all surrounding states except Missouri.
Comment by Tommydanger Friday, May 8, 15 @ 3:10 pm
They lost the recess game of Red Rover and won’t just go home. Whine.
Comment by Marian Friday, May 8, 15 @ 3:12 pm
–…a challenge unlike any it has known.–
Yeah, that Civil War, race riots, labor wars, polio, Depression, WWII, segregation, etc., it was all a stone-cold groove compared to today’s insurmountable and unprecedented problem of paying back borrowed money.
Embarrassing, hysterical, narcissistic navel-gazing.
Seiously, they’re demented, should not be operating motor vehicles.
Comment by Wordslinger Friday, May 8, 15 @ 3:14 pm
“these state and local pension demands”
Demands? These are negotiated, contractually-required, constitutionally-protected benefits.
Comment by JoanP Friday, May 8, 15 @ 3:14 pm
I’m just going to leave this here, and…yeah.
http://www.chicagotribune.com/news/opinion/editorials/ct-supreme-appellate-court-endorse-edit-20141027-story.html
Comment by Dirty Red Friday, May 8, 15 @ 3:19 pm
Rahm can start finding money by cancelling the building of a Basketball Court for DePaul and using the 50 million dollars to pay down the pension debt. It’s a start!
Comment by John Parnell Friday, May 8, 15 @ 3:20 pm
I was struck by their failings in simple logic and reading. They said:
“That as the cost of retirement benefits continues to skyrocket, more of the cost must be placed on the workers who will reap those benefits.” Did they not read the ruling? Umm, no. Not so much.
Comment by Chicago Cynic Friday, May 8, 15 @ 3:21 pm
===hey prayed that the court would uphold state attempts to curtail retiree benefits, or at least explain how future laws might be written to meet constitutional constraints. Friday’s decision offered neither.
Actually I believe Rich highlighted the road map the court gave on just this point. The ed board really is just lazy.
Comment by ArchPundit Friday, May 8, 15 @ 3:23 pm
How about term limits for the Tribune Editorial Board members?
Comment by Buzzie Friday, May 8, 15 @ 3:26 pm
I agree with Rich that the ghost state comment was very much over the top. I also think it was for a good reason that the IL Supreme in its decision explicitly referenced part of the legislative record that discussed Ralph Martire’s pension ramp proposal. That proposal needs to be given serious consideration now.
Comment by Rod Friday, May 8, 15 @ 3:30 pm
How does the Trib Ed Board not understand what debt is? It’s time for a major shake up over there… there are only so many illogical and ‘the boy who cried wolf’ editorials that can be written before someone pulls the plug right?
Comment by From the 'Dale to HP Friday, May 8, 15 @ 3:34 pm
=Actually I believe Rich highlighted the road map the court gave on just this point. The ed board really is just lazy.=
Yup. If they weren’t, they wouldn’t have been cheerleading what was, at best, a shoot-the-moon attempt to roll back pensions. They signed on to that incredibly thin Sidley Austin “analysis” because it said what they wanted to hear.
Cullerton’s office had the most solid analysis of pension-reform constitutionality from the get-go. They could mention his medical premiums/COLA trade (not sure it’s a slam-dunk, but way more plausible than the law that just failed); the Martire plan; taxing retirement income; but they have zero interest in educating their readers. It’s really unfortunate.
Comment by whetstone Friday, May 8, 15 @ 3:44 pm
I pay close to 10,000 on real estate taxes in Chicago. another 1800 water/sewer taxes on every u have an. Chicago tax /fee ; so too say we don’t pay enough is crazy. we are all being taxed on unrealized gains it needs to stop. The city needs its own income tax at least everyone pays along with the elimination of the Tif and pay in by the teachers. to amount to the same % as we pay in for social security.
Comment by real estate Friday, May 8, 15 @ 3:45 pm
You mean a “ghost state” like Minnesota?
From Eric Zorn, of the Chicago Tribune:
‘Most liberal governor’ rights ship in Minnesota
“the test in Minnesota of liberal economic principles has largely been a success. As we will read today, tax and spending increases in recent years have resulted in a budget surplus and a robust economic climate that’s the envy of the state’s Midwestern neighbors.”
“Dayton, himself a super-rich heir to the Target retail fortune, pushed through more than $2 billion in new taxes, more than half of them targeting the top 1 percent of earners. They included a 25 percent hike in the state income tax rate — to 9.85 percent — on annual income of over $250,000 per couple.”
Read. Your own. Paper.
Comment by Juvenal Friday, May 8, 15 @ 3:47 pm
They could mention his medical premiums/COLA trade (not sure it’s a slam-dunk, but way more plausible than the law that just failed)
Don’t see how this is more plausible since health insurance has also been ruled upon by the ISC as something you can’t strip. Nothing to trade!
Comment by Federalist Friday, May 8, 15 @ 3:48 pm
==Don’t see how this is more plausible since health insurance has also been ruled upon by the ISC as something you can’t strip. Nothing to trade!==
Ah. Thanks. Yeah, seemed a stretch but I didn’t know that.
Comment by whetstone Friday, May 8, 15 @ 3:49 pm
It is amazing how a company that filed for bankruptcy, froze pensions and converted employees to 401K’s and cut healthcare benefits has the gall to scream about anything.
If I had a bird, I would use the Trib to line the bottom of the cage. Wait, I won’t read that union busting paper.
Comment by NewWestSuburbanGOP'er Friday, May 8, 15 @ 3:51 pm
The venerated sages at Trib editorial board are certainly covering themselves in glory today: “Kanye West is Brilliant”
– MrJM
Comment by MrJM Friday, May 8, 15 @ 3:57 pm
The Rauner sycophants on the Tribune editorial board also say:
“So as the slashing of non-retirement costs intensifies, don’t blame the chief executive officers who have to wield the knives.”
I will hold them accountable if they refuse to consider new revenue in the form of restoring the state income tax increase and raising the low property tax rates in Chicago to match those in the suburbs.
Comment by Wensicia Friday, May 8, 15 @ 3:57 pm
===You mean a “ghost state” like Minnesota?
3.6% unemployment statewide
3.0% or lower in the three county area from where I’m recruiting students primarily.
Only time I’ve ever flinched every time the unemployment rate goes down.
Comment by ArchPundit Friday, May 8, 15 @ 4:03 pm
We can only wish to be Minnesota. 80% of IL voters want a millionaire tax. The voters spoke, so hop to it. Cuts are needed too, and paper pushers at the state shouldn’t be making 60K. We must COMPROMISE……I know its a lost word these days.
Comment by BlameBruceRauner Friday, May 8, 15 @ 4:06 pm
Go write a check to the Rauner “we need to rip these pensions out of govt workers hands fund” and you’ll feel better Trid Ed Board.
Comment by Obamas Puppy Friday, May 8, 15 @ 4:07 pm
I can’t comment because I promised to be positive on this Good Friday.
Comment by Norseman Friday, May 8, 15 @ 4:13 pm
Dawn must be looking down and saying to herself….I was right back in 1970.
Comment by scott aster Friday, May 8, 15 @ 4:17 pm
“So as the slashing of non-retirement costs intensifies, don’t blame the chief executive officers who have to wield the knives.”
Don’t worry, we also blame the Tribune editorial board, who shamelessly misled the public and policymakers for two years into believing the plain words of the Constitution don’t mean what they mean, and now apparently doesn’t even have the moral courage to say “we are sorry, we were wrong.”
No, Tribune. By refusing to admit to the necessity of additional revenue, which even pro-business groups recognize, you are every bit as responsible.
Comment by Juvenal Friday, May 8, 15 @ 4:17 pm
Federalist, whetstone
Since the Kanerva decision, Cullerton has replaced his “give up your 3% compounded COLA if you want free retiree health care” proposal with different contractual choice for state employees: future pay raises, or your promised pension COLA — pick one. His theory is that current employees don’t have a constitutional right to pay raises. If they want the state to keep giving them raises, they would have to agree to a less generous COLA when they retire.
All kinds collective bargaining issues here, but I don’t think the Supremes closed the door on this idea today. It’s something to put on the “what’s next” list along with re-amortization, a constitutional amendment, and a tax increase.
Comment by Phil Friday, May 8, 15 @ 4:18 pm
Would the Trib just abolish its waste-of-space editorial and add more comic strips…they are more funny and less offensive.
Comment by D.P.Gumby Friday, May 8, 15 @ 4:18 pm
Being a Tribune editorial board member means never having to say your sorry — or that you might have been wrong about something.
Comment by Phil Friday, May 8, 15 @ 4:21 pm
Matt Fabian, a partner at Municipal Market Analytics:
“A property tax increase could solve Chicago’s problems tomorrow…Chicago could raise taxes by 50 percent and still have lower taxes than New Jersey”
Comment by Enviro Friday, May 8, 15 @ 4:22 pm
Why is it that all cuts are draconian? Can the government not be expected to run more efficiently? Can DCFS not have more caseworkers and less managers? Can the department of education not hand out money to schools with less people?
Comment by Will P Monday, May 11, 15 @ 9:29 am