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* From the Illinois Auditor General…
The net position of governmental activities continued to deteriorate and the deficit increased by $4.1 billion from FY14 to FY15. Overall, the net position of governmental activities is reported as a deficit of $125.3 billion.
That’s mostly for unfunded pension liabilities.
Oy.
…Adding… From WSIL TV…
5 solutions to state’s pension crisis offered by Illinois Policy Institute
As House lawmakers headed back into session Monday following a four week break, a major stumbling block toward solving this and future budget crises remains. What should they do about Illinois’ pension debt?
It’s now at a record $111 billion, according to the Illinois Policy Institute, which on Monday offered five solutions to fix the problem.
The words “solutions” and “fix” should’ve had scare quotes around them. If you click through, you’ll see that none of the “solutions” actually “fix” the current unfunded liability. The only way to do that is to pay it off, although I suppose handing over responsibility for teachers’ pension payments to local school districts and allowing those districts to declare bankruptcy could qualify.
posted by Rich Miller
Tuesday, Apr 5, 16 @ 12:33 pm
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When I saw the figure 125 billion and then I saw the auditor general’s name mentioned, I just figured this was another story on his personal campaign spending. Always read past the headlines Hot Chocolate!
Comment by hot chocolate Tuesday, Apr 5, 16 @ 12:44 pm
4.1 billion? That’s about the amount of revenue lost by not continuing the income tax rate at 5%.
Comment by DuPage Tuesday, Apr 5, 16 @ 12:48 pm
I ‘like’ how they did the ‘average state pensioner who retired after 2013 with more than 30 years of service’ so they could make it look like that was the average state pensioner. It’s not, since most of the pensioners retired prior to 2013,and didn’t have 30 years of service at today’s salaries.
Still tired of people who think compounding is ok for 401Ks, and social security, but not pensions.
Comment by thoughts matter Tuesday, Apr 5, 16 @ 12:52 pm
Maybe Rauner should start a ringing a bell outside the Thompson Center.
Comment by Precinct Captain Tuesday, Apr 5, 16 @ 12:55 pm
And a 3.3% increase over FY 14. Not good, but it seems like the pension liability is starting to level off a bit. Wonder what FY 15 to FY 16 is gonna look like?
Comment by Six Degrees of Separation Tuesday, Apr 5, 16 @ 1:11 pm
maybe the GA should not get exorbitant breaks or not get paid for the time they are not there to work while there is no budget… They are still “part” of the problem.
Comment by Allen D Tuesday, Apr 5, 16 @ 1:14 pm
Found it interesting that the major highlights covered the 2011 temporary income tax increase and the unconstitutional 2013 pension reform but didn’t mention the legal 2011 pension reform, aka, Tier 2. You had to go the the pension details, Note 16, to find out about Tier 2.
The report did a good job in note 16 covering the whole pension issue. At the very end of the note (printed page 147) is a nice table showing what happens to the pension liability if you change the assumed rate +/- 1%.
Comment by RNUG Tuesday, Apr 5, 16 @ 1:16 pm
== Wonder what FY 15 to FY 16 is gonna look like? ==
As Steve Schnorf reminded me yesterday, the payments are about $1B short of the carrying costs right now. It will probably continue to increase for a number of years, but slowly.
Comment by RNUG Tuesday, Apr 5, 16 @ 1:20 pm
Meanwhile, I went to the dentist this morning. On the way out, I asked if Delta was paying any claims. They said no. I think the premiums are still being collected though. What a way to run a railroad.
Comment by Excessively Rabid Tuesday, Apr 5, 16 @ 1:48 pm
What is a career pensioner?
No bias at ipi
Comment by Foster brooks Tuesday, Apr 5, 16 @ 1:50 pm
When the Illinois Policy Institute uses the term “perk” their proposals lose credibility (not that they really had much to begin with anyway). Pensions are deferred income that is earned by the worker, not some bonus or gift that the IPI implies.
Comment by Williamson County Resident Tuesday, Apr 5, 16 @ 1:54 pm
= The words “solutions” and “fix” should’ve had scare quotes around them. =
Please add “reform” to the scare quotes from anyone in the legislature or Gov’s office.
Workers Comp “reform” = more overcharges to businesses and more profits for insurance companies.
Pension “reform” = ripping off your employees.
Comment by Qui Tam Tuesday, Apr 5, 16 @ 2:11 pm
“60 percent of state pensioners retire in their 50s, many with full pension benefits.” Would that mainly be police and fire? If you want to reduce benefits for police and firefighters you should come out and say so.
Comment by NoGifts Tuesday, Apr 5, 16 @ 2:17 pm
Pension elimination is required going forward. Taxpayers should not be responsible for guaranteeing investment returns.
Comment by Tone Tuesday, Apr 5, 16 @ 2:22 pm
NoGifts -
That also includes state correctional officers. You know, the people that work around convicted felons all day every day.
Comment by Smitty Irving Tuesday, Apr 5, 16 @ 2:26 pm
== Would that mainly be police and fire? ==
Most be police and corrections.
For SERS normal non-LE employee, you have to work 44 years and 9 months to get the full benefit. Guess a lot of people started working for the State about age 5 to 10.
Comment by RNUG Tuesday, Apr 5, 16 @ 2:27 pm
I would like to see the cipherin’ behind that 60 percent figure. State pensioners don’t include local police and fire. One of the biggest cohorts, teachers, has for some time had an average new retiree profile of age 59 with 28 years of service.
Going out of town so I don’t have time to read the rest. If it’s typical IPI, it’s probably baloney anyway.
Comment by Arthur Andersen Tuesday, Apr 5, 16 @ 2:29 pm
@ Tone: I’ll begin by calling you “Tone Deaf” since your comments shouldn’t be heard…anyway, fine, the legislature can consider moving a bill that would eliminate all pensions going forward, but the likely outcome would be attracting the worst qualified work force over time, since no others would apply. Remember your simple physics - for every action there is a equal reaction.
Comment by Captain Illini Tuesday, Apr 5, 16 @ 2:29 pm
-Tone-
Then you will pay the employees a lot more or you will make contractors very rich. You won’t save any money. I’ve been on all sides of the equation, as a state employee, as a hirer of contractors for the State, and as a contractor to the State.
Comment by RNUG Tuesday, Apr 5, 16 @ 2:31 pm
When will there likely be a suit to determine if Tier 2 would pay a retiree less than social security?
Comment by Retired Tuesday, Apr 5, 16 @ 3:20 pm
== When will there likely be a suit to determine if Tier 2 would pay a retiree less than social security? ==
That’s not a law suit. It is a determination made by the Feds, specifically the IRS. Right now, and for at least the near future, Tier 2 meets the definition of a qualified plan for those “State employees” who are not coordinated (State only pension).
If Tier 2 were to fail to meet that definition in the future, the State would have the choice of lifting the cap in the Tier 2 legislation or choosing to put teachers etc. into Social Security.
Comment by RNUG Tuesday, Apr 5, 16 @ 3:38 pm
Ouch.
Because… Rauner!
Comment by Formerly Known As... Tuesday, Apr 5, 16 @ 3:58 pm
And why does anyone believe our Democratic legislature could give a hoot whether taxpayers get stuck with footing the bill. The public unions finance the Democratic Party hook line and sinker and are well rewarded for the support
Comment by Sue Tuesday, Apr 5, 16 @ 3:59 pm
=When the Illinois Policy Institute uses the term “perk” their proposals lose credibility=
The only time “perk” was written in that article was in reference to the teacher pick-up, where teachers don’t contribute their full 9.4%. That is indeed a perk.
Comment by Robert the 1st Tuesday, Apr 5, 16 @ 4:38 pm
==could give a hoot whether taxpayers get stuck with footing the bill==
Here’s a newsflash. The bill has to be paid and I hate to tell you but that bill is going to be paid by the taxpayer whether you like it or not. We can continue to moan and complain about it or we can figure out a way to do it.
Comment by Demoralized Tuesday, Apr 5, 16 @ 4:52 pm
Rob 1, I more think of it as bargained compensation. As you see it, I guess every dollar of salary and all benefits are “perks”, right?
Comment by steve schnorf Tuesday, Apr 5, 16 @ 4:53 pm
No, there is not enough money to pay the pensions.
Comment by Tone Tuesday, Apr 5, 16 @ 6:08 pm
==No, there is not enough money to pay the pensions==
And yet they have to be paid. Accept that money will have to be raised to do so and move on.
Comment by Demoralized Wednesday, Apr 6, 16 @ 7:50 am